Mining and green field opportunities and a detailed business plan


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Mining and green field opportunities and a detailed business plan

  2. 2. What Inspired UsThe countries of the European Union arecurrently the number two global leaders in thedevelopment and application of renewableenergy. They are rich in mineral resourcesand/or houses listed /un-listed companies whoown majority of the assets across major Coaland other mineral blocks. Promoting the use ofrenewable energy sources is important both tothe reduction of the EUs dependence onforeign energy imports, and in meeting targetsto combat global warming.We Want To Be A Part of ThisREVOLUTION!!
  3. 3. WE ASPIRE• EU pioneers reached agreement in principle in March 2007that more than 20 percent of the blocs energy should beproduced from renewable fuels by 2020 as a part of its driveto cut emissions of carbon dioxide.• Renewable now account for less than 7 percent of the EUenergy mix. Hence we surge for an opportunity to transformthis numbers to higher share.• The proposal of Greece to develop the Helios project (EUR20billion )Helios solar project is designed to attract investmentto install as many as 10 giga-watts of solar panels by2050)together with other member states and the EuropeanCommission has the potential to be truly groundbreaking.
  4. 4. Our Proposed Platform Will Focus on the following KeySectors:Focusing onextracting thehighest returnswith minimalrisk based onstrategicmarketanalysis,disciplinedexecution,operationalexcellence andeffective riskmanagement
  5. 5. Energy Profile: Europe &CIS
  6. 6. EUROPE: EMERGING PLATFORMEmerging Market inEurope includesRomania, Poland,Italy, Germany,United Kingdom,Bulgaria, Russia,Turkey, Ukraine,Hungary, Czech Rep,etc.
  8. 8. ROMANIA•In order to meet the EU requirements, approximately 1.17billion EUR are estimated to be directed to wastemanagement and recycling in Romania, during the period2007-2013, out of which 930 million EUR represents EUfunds.•Romania has to be able to recycle approximately 50% of itswaste by 2013.•Romania is considered to be the highest in potential forRenewable, specifically in Wind Energy.•The EU has recently approved an incentive program as thecountry seeks the goal of generating 24% of its power fromGreen Energy.•Romania will share out highest incentive among EU, forinvestors in wind energy which is as large as 160EUR/Mw after a government law comes in force later partof this year.Country Analysis
  9. 9. BULGARIA Most cities &towns use oldmethods ofdealing with theirwasteThe country identifiedfor Wind energydevelopment (3400 MW,midterm potential)Bio dieselconsumptionregistered astaggering increaseRussian Oil major,investing about $4millionin constructing aphotovoltaic park nearthe Black Sea city ofBourgas, with anexpected output of 1500MWCountry Analysis
  10. 10. POLANDSome of the key objectives of Poland’s Energy policies are:• Increase the share of RES in final energy consumption to 15% by 2020 and30% by 2030.• Achieve a 10% share of biofuels in transport fuel market and to maintainthis year on year.Favorableeconomicalfactor•Shift in Political & Public Support away fromtraditional fossil fuels towards Renewable EnergyResources.•Plans to invest in Renewable Energy in Poland bybiggest Energy Investor by 2016,(300MW by2015, & 1000 MW by 2016Country Analysis
  11. 11. With its high potentialin Agriculture &Biodiesel & Bio ethanol,Turkey can be the biofuel supply centre ofEuropeThe total Amount of Investmentto be made to Meet the Energydemand in Turkey is Estimatedat USD 130 billionTURKEY RENEWABLEPICTURECountry Analysis
  12. 12. GERMANYCountry Analysis
  13. 13. ITALYCountry Analysis
  14. 14. UNITED KINGDOMCountry Analysis
  15. 15. DEVELOPMENT OF THE RENEWABLE ENERGY SECTOR IN THERUSSIANFEDERATION AND IN COUNTRIES OF THE COMMONWEALTH OFINDEPENDENT STATES (CIS): PROSPECTS FOR INTERREGIONALCOOPERATIONThe Russian Federation and countries of the Commonwealth of Independent States (CIS) areendowed with very significant renewable energy resources. The current contribution of solar, tide,(wind, hydro, geothermal, hydro and bio-fuels is less than five per cent of total primary energyconsumption. But they have a large, diverse and unrealised potential that could have importantbenefits for the environment, energy security and the economy if a wide range of barriers to thedeployment of renewable energy technologies can be overcome resulting in a more favourableinvestment climate. Interregional cooperation can contribute greatly to overcoming these obstaclessince many of the opportunities and constraints for the future development of renewable energyresources are common between the CIS member states.UNDP is promoting market transformation towards Low-EmissionDevelopment:This includes support to Kyoto Protocol implementation, and to development of nationalcommunications, as part of the United Nations Framework Convention on ClimateChange (UNFCCC); and promotion of renewable energy, and energy efficiency.
  16. 16. CIS- An Emerging Renewable EnergyPlatform
  17. 17. During last 20-30 years CIS countries have shown great interest towardsrenewable energy use.•Actually in almost all CIS countries theoretical potential of renewable energy sources and theircomplex use exceed current energy consumption.•Technically achievable economic potential of renewable energy varies among CIS states, thehighest being stated in Russia and Ukraine.• Economical potential of renewable sources in Russia (large hydro power and peat are notincluded) nowadays can provide conventional fossil fuel savings of about 0,3 billion t.c.e. That isalmost 1/3 of total country’s annual consumption of natural gas, oil and coal.• Technically achievable potential of renewable energy in Ukraine amounts to 63 t.o.e. Providedfavourable conditions for renewable energy use it can cover 30% of total country’s energy demandRenewable energy potentialin CIS countries:Economic - about 20-30%Technical - about 50%Perspective - over 100%RENEWABLE ENERGY IN CIS COUNTRIES
  18. 18. UKRAINE• Ukraine proving to be an attractive emerging market for renewable energy.The latest study on the subject lists solar, wind, and hydropower industries as toprenewable energy sectors in Ukraine.• The leading source of renewable energy in Ukraine is hydropower. Installed capacity is 150MW. The potential of the hydropower industry in Ukraine is estimated at 2.3 GW. Thecountry has 22,400 rivers that allow for small hydro plants to be built across the country.• According to several research programme, Ukraine also has strong solar potential. A recentresearch lists the country as the one that offers favourable tax climate - the feed-in tariff inthe country is over € 0.40/kWh. Moreover, it is claimed that Ukraine hosts the largestphotovoltaic power plant in Central and Eastern Europe. The capacity of the facility is 80MW.• Analysts at the British audit company note that Ukraines highest renewables potential lieswithin its offshore wind industry - the country ranked 27 in the respective category. The windpowered energy production in Ukraine has installed capacity of 87MW (as of Dec. 2010) andprojected capacity estimated at 19-24 GW.• Suffice it to say that Ukraines biomass industry constitutes over two-thirds of the countryspotential on the market of renewables. Currently, under 0.5 percent of energy is producedfrom biomass but the estimated potential is ten times larger.• According to Ernst & Young sources, there are strong signs that Ukraine is committed tomeeting the goal of generating 19% of energy from renewable energy sources by 2030(according to the Governments 2006 strategy). The national project Natural Energy,launched in 2010, sets an objective to increase the share of Ukraines renewable energyproduction on the state energy market up to 30 percent by 2015.
  19. 19. GLOBAL EMERGING GEOGRAPHIES:Energy Storage Platform
  21. 21. • Access to affordable , reliable & environmentally benign energy is anemerging human development issue in CIS for rural & poor urban states.• Number of demo projects proved successful, way forward is to scale up.• Scaling up requires :1. Dedicated Policy2. Dedicated Financing from the Government3. Technology transfer & capacity development from O&M&M (operation,maintenance & management).Some of the Environmental Current issuesinclude massive soil erosion & degradation; water pollution ;air pollutionfrom industrial effluents.• Vicious Circle: Poverty – Lack of Access to Energy- pure social services-absence of productive opportunities – more poverty. Some countries lackmodern facilities for waste management & recycling. Separate collectionprocedures of garbage is recently introduced but yet to be proven effective.Low environmental awareness as a key challenge in the uptake to technologyand issues with social acceptance of waste incineration facilities.CHALLENGESCHALLENGES
  22. 22. Demand for commodities is continuing to grow and the emergence of China and India aswell as the development of shale gas has significantly changed the dynamics of the globalsupply and demand. Furthermore, commodities markets remain highly fragmented thusripe with opportunities for significant value creation:MARKET DEVELOPMENT & RESOURCES:METALS & MINERALSGlobalization, consolidation along withregional market inefficiencies allow a limitednumber of focused, best in class, visionaryand integrated commodity marketingcompanies a unique opportunity to extractand create significant returns across theVALUE CHAINFinancial market participants are in theconsolidation phase after the exit of anumber of key players in the marketcreating an opportunity for sophisticated,strongly capitalized, physically orientedcompanies to exploit.
  23. 23. Our Key ObjectivesDevelop an integrated and fully-diversified portfolio ofcommodity based businesses with real assets acrossthe value chains in energy, & industrial minerals toextract extraordinary stakeholder value.Managing Partner along with a selected team of coreparticipants will lead the development of the platform.The platform will invest globally pursuant to itsfundamental analysis of commodities, strategic marketassessments leveraging competitive advantagesthrough its network of experienced local talent andstrategic partnerships.•Act with integrity, honesty and respect.• Demand responsibility, accountability andtransparency.• Passionate, decisive and act with urgency.•Pursue sustainable growth with a long term view.MISSIONORGANISATIONVALUES
  24. 24. Energy utilities are facing increased stakeholder scrutiny, increased costs offinancing, increased competition and lack of government support andsponsorship (explicit or implicit) for large infrastructure projects.System operators need co-investors for thedevelopment of infrastructure projects(transmission lines and pipelines) since thetraditional investor owned utilities andbanks are reluctant to directly participate.Banks are retreating; thus providing awindow of investment and partnershipopportunities for new market participants.Furthermore, a broad based partnershipvalue proposition across the entire valuechain will clearly differentiate us fromlarger utilities and banks.
  25. 25. Initially Russia M&A activity was dominated by domesticconsolidation.In 2012, we expect to see Russian steel and miningcompaniestarget South-East Asia, Middle East, Turkey, and India forM&A opportunities, in order to access growth opportunitiesin these markets.Inbound investment into Russia has historically been low, dueto the nationalization policy which requires companies hopingto acquire more than a 10% stake in Russian strategic depositsto gain permission from both the government and the FederalAntimonopoly Service (FAS). However, it is thought that Russiawill raise the threshold to 25%, which will potentially increaseinbound investment in 2012 and beyond.The drivers for IPOs and secondary listings remain strong,despite the current market conditions. Both can deliverincreased global prominence and capital raising opportunitiesat a time when Russian companies are increasingly looking togrow beyond their regional borders. If market conditionsimprove, we expect to see at least five major IPOs in 2012 bymining and metals companies from Russia ,Kazakhstan &COUNTRY ANALYSIS:RUSSIAMining :M&A, Capitalraising trend
  26. 26. During 2011, outbound M&A increased significantly withUK-based mining and metals companies undertaking morestrategic and opportunistic M&A which carried higher dealvalues.Certain acquisitions provide exposure to the fastgrowing Indonesian and pan-Asian region, primarily China,South Korea, Philippines and Thailand to feed thesteel construction industry as well as utility companies andcoal trading companies.•AIM, London’s junior market, saw a significant slowdown innew and secondary issues across all sectors. However, thetransformational levels of funding raised by a small numberof London-listed junior miners for acquisitions and projectdevelopment demonstrated that appetite was still there forquality stories, in spite of the prevailing market conditions.London remains a key destination for companiesseeking to raise capital and global profile. When marketconditions stabilize, it is expected to see a number ofinbound listings from international companies seekingto grow beyond their regional borders.COUNTRY ANALYSIS:UNITED KINGDOMMining :M&A, Capital raisingtrendOUTLOOKWhile UK based companies appear to be able to afford tomake acquisitions, they remain cautious about valuationamidst a turbulent economic backdrop, although thecurrent market volatility could offer up attractive targets.We believe that during 2012, UK based mining and metalscompanies will continue to look at deal opportunities on acase by case basis and react when strategic, synergistictargets become available, provided valuations can bemanaged. Clearly, the ability to manage valuations willdepend on stability across the Eurozone, as any furtheruncertainty and volatility will lead to a more complexvaluation process and will impact the cost of capital.
  27. 27. European utilities are under serious pressure from their government relatedshareholders and their customer related stakeholders to reduce their shareof coal. Coal generation will however play an important role in the energymix, especially with the Nuclear phase out. Practically every large utility ishowever getting new build coal plants in their portfolio. We expect to be ableto purchase the ‘mid life’ stations at attractive prices and to develop theoption to convert to biomass in case attractive support systems are in placeor coal or emissions prices rise significantly. Coal (or biomass) will besupplied from our Resources portfolio and power will be majority marketedat deal closure to large industrials and/or mid-size utilities.StrategicAcquisition (‘Mid-Life’Coal Plant)The demand for coal in Asia is continuing to increase and the globalsteam coal and metallurgical coal supply markets are fragmented. Thereare several opportunities to acquire or to invest as a minority equityparticipant in smaller producing coal mines with proven reserves in keysupply regions such as Canada, USA, South Africa and Indonesia.
  28. 28. A key bottle neck in thecoal supply markets is lackof available terminalcapacity to supply coal toAsia. There are severalopportunities toparticipate as a minorityinvestor in coal terminalinfrastructure projects inkey emerging markets tofacilitate and to obtainstrategic terminal capacityand to increase suppliesto Asia to meet additionalincremental demand.StrategicAcquisition :An Asian Overview
  29. 29. • Acquisitions of mines• Equity Participations• Joint ventures• Diversity of supply through blending and stockpiling• Optimization of production volumes• Transportation and marketing optionality• Operations and logistics flexibility and optionality• Develop long term partnerships and third partysales and marketing channelsMiningStock Piling &BlendingFreightDistributionMarketingMinerals & Metals Value Chains
  30. 30. Financials:TIME LINE FLOWCHARTInitiation Execution Maturity PartnershipsFocus on executionset up, opportunityassessments andupstream strategicacquisitions.Develop keymidstream assetsthrough strategicacquisitions andparticipations.Focus ondevelopingan integratedglobalportfolio(Production,Transportation &Marketing).Focus on valuechainoptimization ofPortfolio.Focus onGlobalPartnerships.
  31. 31. Our Proposed Next Steps
  32. 32. Our Track RecordProven track record in developing multiple successful, highly profitable globalenergy portfolios and trading firms in South-East Asia and, Africa .Recent achievements include: