VEDANTA RESOURCES PLCCredit Suisse Global Steel & MiningConference, LondonSeptember 2012
Cautionary Statement and DisclaimerThe views expressed here may contain information derived from publicly available source...
HighlightsVedanta: A Global Diversified Natural Resources MajorWorld-class portfolio of large, structurally low-cost, scal...
Tier-1 Diversified Asset PortfolioFY2012ProductionTargetCapacity R&R Life1 Sustainable Cost Position2830kt 1mtpa 25+ Lowes...
FY2004Ancd 1mtalumina refineryproject at VALDelivering GrowthFY2008Cmd 170kt ZnsmelterCmd 80MW CPP atFY2010Acq VS DempoCmd...
Aluminium16%CopperAluminium3%Copper13%Oil & Gas38%Power2%Continued Growth and DiversificationFY2004(IPO)Aluminium7%Copper1...
Strong and Consistent Profitability30%41%43%54%56%Copper AustraliaZinc- InternationalIron OreZinc- IndiaOil & Gas²FY2012 E...
A Global Diversified Natural Resources MajorFY12/CY11EBITDA($bn)PEMultipleBHP Billiton 33.7 9.9Vale 33.8 5.8Rio Tinto 28.5...
Proximity to Rapidly Growing MarketsIndia48%China20%Other FarEast and Asia11%Middle Eastand Africa9%Rest of theWorld12%Ved...
Strong Focus on ExplorationAdded 3x timesmined out inFY2012Added 4.8x timesmined out since IPOR&R increased to332mt, from ...
1.9 1.7 1.51.1 1.0FY 2008 FY 2009 FY 2010 FY 2011 FY 2012Sustainability – Integral to our BusinessHealth & Safety− 48% red...
Strategic PrioritiesDeliver industry-leading production growth across our portfolioContinue to add reserves and resources ...
Optimising Group StructureRestructuring on track for completion in CY2012Consolidates and simplifies group structure,elimi...
Group Simplification to Reduce Debt at plcPost group structure simplification, debt serviceliability at plc reduces by 61%...
0.5Free Cash Flow¹ Capex-ex-Cairn Capex-Cairn²Well-Invested Capex Driving Near-Term GrowthCash Flow and Growth Capex Profi...
SummaryGlobal Diversified Natural Resources MajorWorld-class portfolio of large, structurally low-cost, scalable assets wi...
Appendix
Zinc-Lead-SilverIron oreOil & Gas Copper Aluminium PowerCapacityGlobal Diversified Natural Resources MajorIndia, Ireland,N...
AchievedRajasthan block producing at c.175kbopd− 7.3bn boe of estimated gross in-place resourcesExploration success ratio ...
01,0002,0003,0004,0005,000ZnCompositecost-c1cashcost($/t)Cumulative Production (Percentile)AchievedOrganic growth: 1mtpa z...
AchievedBusiness acquired in FY2011, stable operatingperformanceR&R: Mine life extended at all three assetsFocusFurther mi...
AchievedSignificant expansion since acquisitionSustained lowest quartile cost positionR&R: 68mt net addition in FY2012− 37...
AchievedOne of the most efficient copper smelters globally− Sustained lowest quartile cost positionValue addition into cop...
AchievedKonkola shaft#4 sunk to final 1500m depth− Commissioned 2900level high speed tramming facilityincreasing mine deve...
Aluminium and PowerAchieved1mtpa Alumina capacity, 750kt Aluminium capacity with1800MW captive power− Higher volumes of va...
4.13.24.5Strong Financial ProfileCash and Liquid Investments of $6.9bn, with additional $2.9bn undrawn lines of creditFY20...
Group Structure Simplification - TimelineStatus Event ExpectedBSE and NSE approval sought Mar 2012Competition Commission a...
Proposed New Group StructureKonkolaCopperMines (KCM)58.3%Vedanta ResourcesSesa Sterlite79.4%Iron Ore (Sesa Goa)Copper Smel...
Vedanta Group StructureKonkolaCopperMines (KCM)54.6%Vedanta Resources(Listed on LSE)MadrasAluminium(MALCO)94.8%70.5%29.5% ...
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Vedanta presentationatcreditsuisseconferenceseptember2012

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Vedanta presentationatcreditsuisseconferenceseptember2012

  1. 1. VEDANTA RESOURCES PLCCredit Suisse Global Steel & MiningConference, LondonSeptember 2012
  2. 2. Cautionary Statement and DisclaimerThe views expressed here may contain information derived from publicly available sources that have not beenindependently verified.No representation or warranty is made as to the accuracy, completeness, reasonableness or reliability of thisinformation. Any forward looking information in this presentation including, without limitation, any tables, chartsand/or graphs, has been prepared on the basis of a number of assumptions which may prove to be incorrect. Thispresentation should not be relied upon as a recommendation or forecast by Vedanta Resources plc ("Vedanta").Past performance of Vedanta cannot be relied upon as a guide to future performance.This presentation contains forward-looking statements – that is, statements related to future, not past, events. Inthis context, forward-looking statements often address our expected future business and financial performance,and often contain words such as expects, anticipates, intends, plans, believes, seeks, or will. Forward–looking statements by their nature address matters that are, to different degrees, uncertain. For us, uncertaintieslooking statements by their nature address matters that are, to different degrees, uncertain. For us, uncertaintiesarise from the behaviour of financial and metals markets including the London Metal Exchange, fluctuations ininterest and or exchange rates and metal prices; from future integration of acquired businesses; and fromnumerous other matters of national, regional and global scale, including those of a environmental, climatic, natural,political, economic, business, competitive or regulatory nature. These uncertainties may cause our actual futureresults to be materially different that those expressed in our forward-looking statements. We do not undertake toupdate our forward-looking statements.This presentation is not intended, and does not, constitute or form part of any offer, invitation or the solicitation ofan offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities in Vedanta or anyof its subsidiary undertakings or any other invitation or inducement to engage in investment activities, nor shallthis presentation (or any part of it) nor the fact of its distribution form the basis of, or be relied on in connectionwith, any contract or investment decision.CREDIT SUISSE GLOBAL STEEL & MINING CONFERENCE, LONDON (SEPTEMBER 2012) 2
  3. 3. HighlightsVedanta: A Global Diversified Natural Resources MajorWorld-class portfolio of large, structurally low-cost, scalable assets with long life of R&RStrong financial profile supported by diversified cash flow growthDelivering industry-leading production growth driven by substantially invested projectsRecent acquisitions provide additional growth optionsCREDIT SUISSE GLOBAL STEEL & MINING CONFERENCE, LONDON (SEPTEMBER 2012) 33235,353FY2004 FY2012proformaEBITDA (US$mn)+42% CAGRFree Cash Flow (US$mn)(before growth capex)3353,128FY2004 FY2012proforma+32% CAGRUnderlying EPS (USc/share)27209FY2004 FY2012proforma+29% CAGRNote: FY2012 numbers are proforma with Cairn India for full year.
  4. 4. Tier-1 Diversified Asset PortfolioFY2012ProductionTargetCapacity R&R Life1 Sustainable Cost Position2830kt 1mtpa 25+ Lowest Quartile444kt 400ktpa 20+3Lower Half7.8moz 16mozpa 25+ By-product173kboepd 260kboepd417 Lowest QuartileZinc IndiaZinc Intl.SilverOil & GasCREDIT SUISSE GLOBAL STEEL & MINING CONFERENCE, LONDON (SEPTEMBER 2012)13.8mt 20.5mtpa 18 Lowest Quartile200kt 400ktpa 24+6Lower Half675kt 2.3mtpaCurrently Lower Half; LowestQuartile with Captive BauxiteIron Ore5Copper ZambiaAluminiumNote: 1. At capacity2. Cost position for base metals from Wood-Mackenzie, Iron ore from Metalytics ,and Oil & Gas from Company Study3. Includes Gamsberg4. For current producing assets, subject to approvals5. Does not include Liberia6. Mine life of Konkola DeepsLarge, Low-Cost, Long-Life, Scalable Assets4
  5. 5. FY2004Ancd 1mtalumina refineryproject at VALDelivering GrowthFY2008Cmd 170kt ZnsmelterCmd 80MW CPP atFY2010Acq VS DempoCmd KDMP Mid-shaft loadingCmd 210kt Zn smelterExp RA mine to 6mtFY2010FY2011Acq Zinc IntlCmd 1.5mt mill atsilver-rich SK mineCmd 2,400 MWFY2011FY2012Group StructureSimplification ancdAcq Cairn IndiaAcq Liberia iron ore assetsCmd 350t Ag refineryCmd 100kt Dariba PbsmelterCmd 7.5mt Nchanga EastmillFY2012Color KeyGroupZinc-LeadCopperAluminiumPowerIron OreOil and Gasproject at VAL5CREDIT SUISSE GLOBAL STEEL & MINING CONFERENCE, LONDON (SEPTEMBER 2012)Pre-IPO1997: CmdTuticorin smelter1999: AcqAustralia Cu mines2001 – Acq BALCO2002- Acq HZLPre-IPOFY2005Acq KCMKDMP projectlaunchedFY2005FY2004FY2006Cmd 170kt Zn and50kt Pb smelter,154MW CPPExp Tuticorinsmelter to 300ktFY2006FY2007Acq Sesa GoaCmd 245kt Al smelter and 540MW CPP at BALCODbn Tuticorin smelter to 400ktFY2007Cmd 80MW CPP atChanderiyaFY2008Cmd 2,400 MWJharsuguda powermillDbn TLP to 75ktCmd 2nd Co furnaceExp 273MW wind powerFY2009Exp RA mine to 5mtCmd 311kt Nchangasmelter, 6mt KonkolaConcentratorFirst metal at 500kt VALJharsuguda aluminiumsmelterFY2009Abbreviations:Dbn: DebottleneckedExp: ExpandedCmd: CommissionedAncd: AnnouncedAcq: AcquiredVedanta IPO
  6. 6. Aluminium16%CopperAluminium3%Copper13%Oil & Gas38%Power2%Continued Growth and DiversificationFY2004(IPO)Aluminium7%Copper19%Iron Ore33%Power4%FY2011Proforma FY2012with Cairn India for Full YearCopper29%Zinc India55%EBITDA: $323mnZinc India23%Zinc-Int.7%Iron Ore14%Zinc India34%Zinc-Int.3%EBITDA: $3.6 bn+10xEBITDA: $5.4bn+16xCREDIT SUISSE GLOBAL STEEL & MINING CONFERENCE, LONDON (SEPTEMBER 2012) 6
  7. 7. Strong and Consistent Profitability30%41%43%54%56%Copper AustraliaZinc- InternationalIron OreZinc- IndiaOil & Gas²FY2012 EBITDA Margins by Segment33% 33%41%59%55%35%43%45%41%3,756Group EBITDA margin¹ Average LMEXConsistent Profit Margins18%31%18%9%2%Share ofEBITDA7CREDIT SUISSE GLOBAL STEEL & MINING CONFERENCE, LONDON (SEPTEMBER 2012)Notes: 1. Excludes copper custom smelting operations2. Oil and Gas EBITDA margins have been calculated after adding back Rajasthan royalties and profit sharing with government to revenues. EBITDA margin based on reported revenues was 81%.10%23%27%30%41%GroupAluminiumCopper ZambiaPowerCopper Australia133%1,636FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12Profitability driven by Asset Quality and Diversification2%3%10%4%
  8. 8. A Global Diversified Natural Resources MajorFY12/CY11EBITDA($bn)PEMultipleBHP Billiton 33.7 9.9Vale 33.8 5.8Rio Tinto 28.5 7.8Anglo American 13.3 9.7Xstrata 11.6 11.2Top Global Diversified Natural Resources Companies23%10%37%69%98%52%46%28%17%7%15%33%15%10%6%4%2%21%14%2%2%8CREDIT SUISSE GLOBAL STEEL & MINING CONFERENCE, LONDON (SEPTEMBER 2012)Xstrata 11.6 11.2Teck 5.5 9.6Vedanta 5.3 5.0ENRC 3.4 6.9Scale and DiversificationSource: Company filings and broker reports. PE multiples based on BEST next year PE estimate from Bloomberg as of 14 September 2012.Note: Commodity split based on pro forma EBITDA for Vedanta and EBIT for major diversified mining companies.1. For Vale, Iron ore includes all ferrous metals2. For BHP, base metals includes copper and zinc-lead. For Xstrata, base metals includes nickel.38% 34%16%37%18% 13%36% 48%6%3%46% 11%2%O&G Zinc-lead Iron ore¹Copper Base metals² CoalAluminium Ferroalloys Other
  9. 9. Proximity to Rapidly Growing MarketsIndia48%China20%Other FarEast and Asia11%Middle Eastand Africa9%Rest of theWorld12%Vedanta Revenues by GeographyFY201282%Strong Market Positioning in IndiaFY2012 India Market Shares#1 #1 #1 #1 #2#19CREDIT SUISSE GLOBAL STEEL & MINING CONFERENCE, LONDON (SEPTEMBER 2012)30%6%39%33%5%Zinc Lead Silver Copper Aluminium OilNotes: Rank excludes imports. Oil & Gas production numbers considered instead of sales.Source: Wood Mackenzie, Indian Ministry of Petroleum and Natural Gas, IBIS, company sourcesIndia Operations: Domestic Sales as % of Total SalesFY201258%81%100%62%80%19%100%Zinc India- ZincZinc India- LeadSilver CopperIndiaAluminium Iron Ore Oil andGas6% 5% 10% 8% 9% 10% 4%2010-25 India Consumption CAGR %Note: Consumption CAGR over 2010-25 for base metals as per Wood-Mackenzie estimates.For Iron Ore, steel consumption CAGR over FY2012-17 as per Ministry of Steel, India considered.Silver consumption growth rate over 2012-2025 as per Ministry of Mines, India.Oil & Gas consumption growth rate over 2008-2035 as per EIA.
  10. 10. Strong Focus on ExplorationAdded 3x timesmined out inFY2012Added 4.8x timesmined out since IPOR&R increased to332mt, from 144mtat Vedanta IPO25+year mine lifewith 10%+gradesZinc India Iron OreIndiaAdded net 68mt inFY2012, 18 yearmine life at currentcapacityR&R increased from190mt 2 atacquisition to374mt – added 3.4xtimes mined outR&R replacementratio of 1.75x inFY2012Rajasthan potentialresource increasedto 7.3bn boe grossin place from 6.5bnboeExploration successOil & GasCopper-ZambiaR&R increased to689mt from 457mtat acquisition24+ year mine lifewith high grade atKDMPAdded mine life atall three assetsCurrent mine life:− Skorpion:5+years1− BMM: 10+years− Lisheen: 3years186mt GamsbergZinc-Intl10CREDIT SUISSE GLOBAL STEEL & MINING CONFERENCE, LONDON (SEPTEMBER 2012)with 10%+grades times mined outLiberia1bn tonnes R&RAeromagnetic studyand 25,000+metresdrilling indicatesstrong potentialupsideExploration successat Sri Lanka andNagayalanka17 year R&R life186mt Gamsbergdeposit feasibilitystudy underwayNotes: 1. With some additional work for conversion of resources to reserves2. 120mt excluding Orissa from Sesa Goa acquisition, and 70mt from Dempo acquisitionCreating Long Term Value through Exploration
  11. 11. 1.9 1.7 1.51.1 1.0FY 2008 FY 2009 FY 2010 FY 2011 FY 2012Sustainability – Integral to our BusinessHealth & Safety− 48% reduction in LTIFR over 5 years− Structured programs to enhance safety and prevent fatalities− Investing in technologically advanced processes that reduce possibleexposure levels at work areaClimate Change− Doubled water recycling to 55.7mn cubic metres in FY2012− 16.2% decrease in GHG emissions (scope 1 & 2) per total revenueNew Sustainability Framework rolled-out-48%Specific Water ConsumptionBALCO (m3/MT)-75%LTIFR19.017.0 16.9 16.3 16.2FY 2008 FY 2009 FY 2010 FY 2011 FY 201215.6 14.27.2 3.9FY 2009 FY 2010 FY 2011 FY 2012Specific Energy ConsumptionHZL Smelters (GJ/MT)New Sustainability Framework rolled-out− New policies and technical standards rolled-out− Exco Sustainability Sub-Committee to enhance sustainability focusCommunity programs covering 3.1million people− Focus Areas: Health and Nutrition, Education, WomenEmpowerment, Water & Sanitation, and Sustainable Livelihood− Collaborating with NGOs, government administration andcommunitiesCREDIT SUISSE GLOBAL STEEL & MINING CONFERENCE, LONDON (SEPTEMBER 2012)-15%11
  12. 12. Strategic PrioritiesDeliver industry-leading production growth across our portfolioContinue to add reserves and resources to drive long-term valueComplete the simplification of the Group structureMinority buyouts at HZL and BALCOReduce gearing from free cash flow12CREDIT SUISSE GLOBAL STEEL & MINING CONFERENCE, LONDON (SEPTEMBER 2012)Growth and Long-Term Value Creation with a Focus on Sustainability
  13. 13. Optimising Group StructureRestructuring on track for completion in CY2012Consolidates and simplifies group structure,eliminates cross-holdingsFinancial Benefits:− Delivers significant synergies upto $200mn/yr− Improves capital structure− Improves allocation and cost of capital− Enhances fungibility of cash− Enhances visibility of earnings and cash flowsKonkolaCopperMinesVedanta ResourcesSesa Sterlite58.3%79.4%− Enhances visibility of earnings and cash flowsReduces Debt service liability at plc by 61% to$3.9bnMinority BuyoutsBuyout of government stake in HZL and BALCOremains a priority13CREDIT SUISSE GLOBAL STEEL & MINING CONFERENCE, LONDON (SEPTEMBER 2012)PowerAlumi-niumOil & GasZinc-Lead-SilverCopperIronOreHZLZinc Int’lSesa GoaWCLCairnIndiaTuticorinCMTBALCOVALTalwandiSaboJharsugudaBALCOMALCONote: Shareholding based on basic shares outstanding
  14. 14. Group Simplification to Reduce Debt at plcPost group structure simplification, debt serviceliability at plc reduces by 61% to $3.9bnDebt service cost at Vedanta reduces from$500mn to $190mn in FY2013Debt Service Liability at plc ($bn)9.8(2.8)10Debt transferred toSesa Sterlite;guarantee continuedby VedantaIntercompanyreceivable createdat Vedanta,from Sesa SterlitePayout-based dividend policies at subsidiaries toresult in significantly higher dividends to plc14CREDIT SUISSE GLOBAL STEEL & MINING CONFERENCE, LONDON (SEPTEMBER 2012)(3.1)3.905Service LiabilityPre TransactionService LiabilityPostTransactionby VedantaNote: Numbers as of 31 March 2012
  15. 15. 0.5Free Cash Flow¹ Capex-ex-Cairn Capex-Cairn²Well-Invested Capex Driving Near-Term GrowthCash Flow and Growth Capex Profile - $bn2,0002,5003,0003,5004,000Zinc-Lead Silver Iron Ore CopperAluminium Power Oil & GasYear-end Capacity (in Copper Equivalent kt)31.61.82.33.13.72.52.21.51.71.3-FY2010 FY2011 ProformaFY2012FY2013e FY2014e FY2015eNotes: 1. Free cash flow after Sustaining Capex but before Growth Capex2. Capex net to Cairn India; part of FY2014e capex is subject to Government of India approval; FY2015e capex has not been announced. Shaded portions pertain to growth not reflected in the RHS capacity growth chart.3. All metal and power capacities rebased to copper equivalent capacity (defined as production x commodity price / copper price) using Long Term commodity price estimates. Power rebased using FY2012 Realisations.Copper custom smelting capacities rebased at TC/RC for FY2012Free Cash Flow at an Inflection PointCREDIT SUISSE GLOBAL STEEL & MINING CONFERENCE, LONDON (SEPTEMBER 2012) 1505001,0001,5002,000FY 2011 FY 2012 FY 2013 FY 2014 FY 20150.4
  16. 16. SummaryGlobal Diversified Natural Resources MajorWorld-class portfolio of large, structurally low-cost, scalable assets with long mine-lifeStrong financial profile supported by diversified cash flow growthDelivering industry-leading production growth driven by substantially invested projectsRecent acquisitions provide additional growth optionsFocus on additional resources to drive long-term valueGroup simplification on track for completion in CY 2012CREDIT SUISSE GLOBAL STEEL & MINING CONFERENCE, LONDON (SEPTEMBER 2012) 16
  17. 17. Appendix
  18. 18. Zinc-Lead-SilverIron oreOil & Gas Copper Aluminium PowerCapacityGlobal Diversified Natural Resources MajorIndia, Ireland,Namibia, SouthAfricaIndiaIndiaIndia, LiberiaIndia, Sri Lanka,South Africa1Zambia, India,AustraliaLargest integratedzinc-lead producerOne of the largestproducers in IndiaStrategically locatedlarge-scale assetsLargest Indianprivate iron oreproducer-exporterOne of India’s largestprivate crude oilproducersWorld class Zambianoperations, Indiancustom smelteramong lowest costsmelters globallyCountry and PositioningGamsberg - one ofthe largestundeveloped zincdeposits: 186mtat 6.9% gradeBALCO 1200MWfirst unit sync byQ2 FY20131.98GW TalwandiSabo by FY2014BALCO 325ktpafirst metal in Q3FY201336mtpa capacityexpansionLiberia project,shipment from 1stphase in FY20142013:c.240kbopd1from Rajasthan300kbopd1 basinpotentialIndia: 400ktpaexpansion1KCM ramping upto 400ktpaGrowth profile1.5mtpa,16moz silver+Gamsberg3.8GW,upto 8.6 GW(3.9GW commercial)740ktpa,upto 2.3mtpa21mtpa1+Liberia175kbopd,upto 300kbopd1India: 400ktpa,upto 800ktpa1Zambia upto 400ktpaCapacityCREDIT SUISSE GLOBAL STEEL & MINING CONFERENCE, LONDON (SEPTEMBER 2012)Notes: 1. Subject to approvals2. Proforma FY2012, including Cairn for the full year FY2012Well Invested Asset Base driving Growth18
  19. 19. AchievedRajasthan block producing at c.175kbopd− 7.3bn boe of estimated gross in-place resourcesExploration success ratio c.50%− FY2012 R&R replacement ratio of 175%− Exploration success at Sri Lanka, KG BasinFocusRajasthan Block Ramp-up1Oil and GasSignificantpart of300,0001BasinRajasthan Gross Production (bopd)Rajasthan Block Ramp-up− Pipeline debottlenecking and augmentation− Development - Bhagyam, Aishwariya; EOR pilot− 300kbopd basin production potentialExploration – 10 blocks in diverse basinsSouth Africa JV: c.20,000 sq km in geologicallyproven basin2CREDIT SUISSE GLOBAL STEEL & MINING CONFERENCE, LONDON (SEPTEMBER 2012) 19Notes. 1. Subject to approvals2. Closure of transaction is subject to South African regulatory approvalspart of240,0001in CY2013Primarilyfrom MBAAishwariyatowardsend FY2013BasinPotentialBarmer HillFurtherexplorationc.175,000CurrentlyMangalac.150kbopdBhagyamupto40kbopd125,000 atAcquisitioncompletionMangala125kbopd
  20. 20. 01,0002,0003,0004,0005,000ZnCompositecost-c1cashcost($/t)Cumulative Production (Percentile)AchievedOrganic growth: 1mtpa zinc-lead, 16moz silverSustained lowest quartile cost position25+year mine life with 10%+gradesFocusOperational efficiency and capacity utilization− Significant near term upside in silver and leadZinc IndiaHZL($ 342/t)1Source: Wood-Mackenzie for Zinc C1 cost curve;Refined Zinc – Lowest Quartile Cost Position25% 50% 75%− Significant near term upside in silver and leadContinue to add more R&R than depletion at existingminesAdditionally, large-scale exploration across Indiacovering over 20,000 sq kmFeasibility study underway for next leg of growthCREDIT SUISSE GLOBAL STEEL & MINING CONFERENCE, LONDON (SEPTEMBER 2012) 2005001,0001,5002,0002,5003,0003,5004,00001002003004005006007008009001000FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12Zinc-Lead Metal Production (kt)Zinc reported COP excluding royalty ($/t)Zinc LME ($/t)Operating Performance$/tktSource: Wood-Mackenzie for Zinc C1 cost curve;1 Zinc India FY2012 COP of $342/t calculated as per Wood-Mackenzie methodology. Zinc Indiaremains in the First Quartile based on reported FY2012 COP of $834/t, which does not considercredits for silver and lead.
  21. 21. AchievedBusiness acquired in FY2011, stable operatingperformanceR&R: Mine life extended at all three assetsFocusFurther mine life extension at existing operationsGamsberg project (186mt)Zinc International2012e Production (kt)710Rampura-AguchaRed DogCenturyMount Isa Pb/ZnSan CristobalAntaminaBrunswickMcArthur RiverTaraPenasquito25+Mine Life− 20 year mine life at 400ktpa zinc production− Feasibility study to complete in current quarter− Targeting production in 2 yearsCREDIT SUISSE GLOBAL STEEL & MINING CONFERENCE, LONDON (SEPTEMBER 2012) 21Source: Wood-Mackenzie1681644000 500 1000PenasquitoVazanteLanpingLisheenSkorpionGamsberg… 20+
  22. 22. AchievedSignificant expansion since acquisitionSustained lowest quartile cost positionR&R: 68mt net addition in FY2012− 374mt total R&R, implying 18+ year mine lifeLiberia iron ore assets acquired:− Aeromagnetic study and initial drilling indicatessignificant upside to the resource base estimateIron OreVedanta Liberia Iron OreAsset Type R&RMano River Brownfield 80mtBea Mountain Greenfield 923mtBomi Hills Brownfield 50mtDistancekey(km)0 50 100Vedanta Mount Nimba(ArcelorMittal)Liberiasignificant upside to the resource base estimateof 1bn tonnesFocusIndia− Goa: Expanding roads and developing newcorridors to mitigate logistics bottlenecks− Karnataka: Process underway to resume miningLiberia− First shipment in FY2014CREDIT SUISSE GLOBAL STEEL & MINING CONFERENCE, LONDON (SEPTEMBER 2012) 22Bomi HillsBea MountainMano RiverAsset KeyWestern Cluster MinesOther Iron Ore MinesRailwayMajor RoadsPutu(Severstal)Bong(WuhanSteel)ProposedSimandouRailwayBuchananGreenvilleDidaMonroviaRobertsport
  23. 23. AchievedOne of the most efficient copper smelters globally− Sustained lowest quartile cost positionValue addition into copper rods, c.50% in FY1298%+ copper recovery and efficient by-productmanagementFocusCopper India/AustraliaLowest Quartile Cost Position-1001020304050Cusmeltingnetcashconversioncost(c/lb)Cumulative Production (Percentile)Copper India(0 c/lb)25% 50% 75%FocusCommissioning of 160 MW CPP400kt smelter expansion1CREDIT SUISSE GLOBAL STEEL & MINING CONFERENCE, LONDON (SEPTEMBER 2012) 23Notes. 1. Subject to approvalsSource: Wood-Mackenzie for Copper Smelting cash cost curve, FY2012 reported net COP forCopper India0%25%50%75%100%0100200300400FY08 FY09 FY10 FY11 FY12Copper Production (kt) Cost Curve PercentileOperating PerformanceCumulative Production (Percentile)
  24. 24. AchievedKonkola shaft#4 sunk to final 1500m depth− Commissioned 2900level high speed tramming facilityincreasing mine development paceProjects commissioned in FY2012− 2nd Cobalt Recovery Furnace− 7.5mt Nchanga East Concentrator− TLP-IV debottlenecking to 75ktpaExploration: Maintained track record of R&R replacementCopper ZambiaTop 12 copper mines by Cu grade of resources (%)3.6%3.4%1.6%1.1%5.1%3.1%2.1%1.5%1.1%0.9%KOV, DRC (Katanga)Konkola, Zambia (Vedanta)Kamoto, DRC (Katanga)Tenke, DRC (Phelps, Tenke)Kananga, DRC (Katanga)Nchanga, Zambia (Vedanta)Tilwezembe, DRC (Katanga)Olympic Dam, Australia (BHPB)Escondida, Chile (BHPB, Rio)Chuquic-amata,Chile(Codelco)Underground mine Open pit mineExploration: Maintained track record of R&R replacementFocus - FY2013 Priorities3mt West Mill to be commissioned in Q2FY2013Accelerate Konkola mine development pace to 60km/yearBottom shaft loading at KDMP by Q3− Platform for 25-30% annual growth in mined metalStart regular mining at Nchanga Upper Ore BodyCREDIT SUISSE GLOBAL STEEL & MINING CONFERENCE, LONDON (SEPTEMBER 2012) 2401002003000100200300400FY08 FY09 FY10 FY11 FY12 FY13e¹Copper Production (kt) Integrated COP (in c/lb, RHS)Operating Performance0.8%0.8%Collahuasi, Chile (Anglo, Falconbridge)Grasberg, Indonesia (Freeport)Source: Raw Materials, CPR, company websitesNotes: 1. Production incudes FY2013 est. of 175kt integrated production and Q1FY2013 custom production annualized to 52kt; COP of Q1 FY2013.
  25. 25. Aluminium and PowerAchieved1mtpa Alumina capacity, 750kt Aluminium capacity with1800MW captive power− Higher volumes of value added products, 25% increasein FY2012− Aluminium costs in lower half of cost curve withoutcaptive bauxiteCommercial power: 2,770MW thermal and 275MW windFocusAluminium - Lower Half Cost Position01,0002,0003,000AlCompositecost-c1cashcost($/t)Cumulative Production (Percentile)Aluminium Smelter Costs (C1 Cash Cost Curve)VAL($ 1,845/t)125% 50% 75%BALCO($ 1,910/t)101,0002,0003,0000200400600800FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Q1FY13¹Aluminium Production (kt) CoP (in $/t, RHS)Operating PerformanceCommitted to an integrated Aluminium Strategy− Focus on securing Bauxite− BALCO 325kt smelter - First metal in Q3 FY2013− VAL 1.25mtpa smelter nearing completion and start-upunder reviewPower− Commence BALCO 1,200MW and Talwandi Sabo1,980MW power plants− 211mt Coal block at BALCO25CREDIT SUISSE GLOBAL STEEL & MINING CONFERENCE, LONDON (SEPTEMBER 2012)Notes. 1. Q1 FY2013 annualizedSource: Wood-Mackenzie for Aluminium C1 cost curve, VAL and BALCO shown atreported costs in Q1 FY2013Cumulative Production (Percentile)
  26. 26. 4.13.24.5Strong Financial ProfileCash and Liquid Investments of $6.9bn, with additional $2.9bn undrawn lines of creditFY2012 Proforma Net Debt:EBITDA including Cairn of 1.9x; Credit ratings of BB/Ba3/BB1Debt Maturity Profile ($bn)2$1.7bn - Bridge loan to be rolled over into long term facilities$0.7bn - Revolving working capital facility$0.4bn - Refinanced$0.3bn - To be repaid through internal cash flowsUS$1bn maturities at plc in FY2013:1.00.5 0.1 0.33.02.21.51.33.10.51.30.40.32.32.42.70.73.2FY2013 FY2014 FY2015 FY2016 FY2017³ FY2018 and laterDebt at VED plc Debt to be transferred from VED plc to Sesa Sterlite Debt at SubsidiariesCREDIT SUISSE GLOBAL STEEL & MINING CONFERENCE, LONDON (SEPTEMBER 2012)Notes: All information as of 31 March 2012, except information on refinancing1. Issue credit Ratings as per S&P, Moody’s and Fitch respectively2. Debt numbers shown at face value3. Includes convertibles at Vedanta Plc of $883mm due in FY2017 (with a put option in April 2013) and $1,250mm due in FY2017 (with a put option in July 2014)26US$1bn maturities at plc in FY2013:$550mn refinanced to date
  27. 27. Group Structure Simplification - TimelineStatus Event ExpectedBSE and NSE approval sought Mar 2012Competition Commission approval sought Mar 2012Foreign Investment Promotion Board approval sought Mar 2012BSE and NSE approval received Apr 2012Competition Commission approval received Apr 2012Application to High Court in India and Supreme Court of Mauritius Apr 2012Scheme documents posted to shareholders May 2012CREDIT SUISSE GLOBAL STEEL & MINING CONFERENCE, LONDON (SEPTEMBER 2012)Vedanta / Sesa / Sterlite / MALCO EGM Jun 2012Foreign Investment Promotion Board approval Jun 2012Supreme Court of Mauritius approval Sep 2012High Courts of India approval Sep 2012Transaction completion CY 201227
  28. 28. Proposed New Group StructureKonkolaCopperMines (KCM)58.3%Vedanta ResourcesSesa Sterlite79.4%Iron Ore (Sesa Goa)Copper Smelting (Tuticorin)Power (2,400MW Jharsuguda)Aluminium (VAL aluminiumassets)Divisions of Sesa SterliteCREDIT SUISSE GLOBAL STEEL & MINING CONFERENCE, LONDON (SEPTEMBER 2012)100%64.9%Zinc India(HZL)AustralianCopperMinesCairn India58.8%Subsidiaries of Sesa Sterliteassets)Option toincrease staketo 94.4%Unlisted entitiesListed entitiesNote: Shareholding based on basic shares outstandingTalwandiSabo Power(1,980MW)100%VAL Powerand MALCOPower(1,405MW)100%Skorpion &Lisheen -100%BMM -74%100%ZincInternational51%BharatAluminium(BALCO)Option toincrease staketo 100%51%WesternCluster(Liberia)Option toincrease staketo 100%28
  29. 29. Vedanta Group StructureKonkolaCopperMines (KCM)54.6%Vedanta Resources(Listed on LSE)MadrasAluminium(MALCO)94.8%70.5%29.5% Sterlite Industries(Listed on BSE,NSE and NYSE)VedantaAluminium(VAL)79.4%Sesa Goa(Listed on BSEand NSE)55.1%3.6% Cairn India Ltd(Listed on BSEand NSE)38.7%20.1%CREDIT SUISSE GLOBAL STEEL & MINING CONFERENCE, LONDON (SEPTEMBER 2012)Zinc IndiaCopperAluminium Iron ore PowerKEY51.0% 100%64.9%Zinc India(HZL)(Listed on BSEand NSE)AustralianCopper MinesBharatAluminium(BALCO)Sterlite Energy100% 51%Skorpion andLisheenBlackMountain100% 74%Zinc InternationalLiberiaIron Ore AssetsOil & GasZinc InternationalNote: Structure as at 31 March 201229

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