Indian Iron Ore Scenario_PKM

7/31/2019 Indian Iron Ore Scenario_PKM

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Unearthing the future

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FOCUSEDON..

Delivery

Long Term Growth

People

A Sustainable

FutureIndian Iron ore

Scenario

Mr PK Mukherjee

Managing Director, Sesa Goa Limited

Metal Bulletin China Iron Ore 2011 Conference

Beijing, March 23rd, 2011


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Cautionary Statement and Disclaimer

This presentation contains forward-looking statements that is, statements related to future, not past, events and

may be interpreted as forward looking statements within the meaning of applicable laws and regulations.

In this 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, should orwill.

Forwardlooking statements by their nature address matters that are, to different degrees, uncertain. Actual results

might differ substantially or materially from those expressed or implied. Important developments that could affect the

companys operations include a downtrend in the iron ore, steel, pig iron & met coke industry global or domestic or

both, significant changes in political, economic, business, competitive or regulatory environment in India or key markets

abroad and from numerous other matters of national, regional & global scale including but not limited to natural

calamity, tax laws, litigations, Government policies & regulations, fluctuations in interest and or exchange rates of

Indian Rupee, etc. Any forward-looking information in this presentation has been prepared on the basis of a number of

assumptions, which may prove to be incorrect.

This presentation should not be relied upon as a recommendation or forecast by Sesa Goa Ltd. The views expressed

herein may contain information derived from publicly available sources that have not been independently verified; no

representation or warranty is made as to the accuracy, completeness or reliability of this information. We do not

undertake to update our forward-looking statements.


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Iron Ore Resources- India (25 Bn T) - 5th Largest in World

Grade-wisedistribution

1.11.7

2.1

2.7

0.6

3.0

3.8

As On Apr 2005

14.6

0.70.7

4.0

4.8

As on Apr2000

11.4

0.7

Current Haematite resources in India

Others

Goa

Ktaka

Chhattisgarh

JKhnad

Orissa

Source: Indian Bureau of Mines, Nagpur

Billion tons


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Resources likely to increase further

Ore As on

1.4.1980

Prodn.

1980-90

As on

1.4.1990

Diff.

1980-90

Prodn.

1990-00

As on

1.4.2000

Diff.

1990-00

Prodn.

2000-05

As on

1.4.2005

Diff.

2000-05

Haematite 11,469 12,197 11,426 14,630

Magnetite 6,095 10,590 10,682 10,619

Total 17,564 470 22,787 5,223 656 22,108 -679 532 25,249 3,141

KEY FACTS:

Over a period of 25 years the Iron Ore Resources have gone up by about 7.7 Billion Tons after producing about 1.7Billion Tons.

Cut off grade is taken as 55%. Hardly any Greenfield explorations. Most of the magnetite deposits not explored - even the explorations made are also of shallow depth of 50-60 meters.

Source: Indian Bureau of Mines, Nagpur

Million tons


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Sesa Exploration

19 275

160

120

Closing R&R(Goa & Kar)

FY-2009

MiningFY-2009AdditionFY-2009

64

R&RSRL

70


FY-2008

MiningFY-2008

14

AdditionFY-2008

54


FY-2007

Million tons


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Indian Iron Ore - Domestic Consumption & Exports

120

72

46

0

20

40

60

80

100

120

20102000 2005

+10%

Mt

101

90

35

0

20

40

60

80

100

120

20052000 2010

+11%

Mt

Source: Metalytics

Domestic Consumption Exports

CAGRCAGR


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Iron ore in India will last for many decades

10-15*

20-2555-65

25

Indian Iron Ore Resources (Billion tons)

65-75

35-45

200-240

25-35

75-85

Expected life of Iron Ore Resources assuming only Domestic consumption (Years**)

Increase fromexploration-greater depth-new regions

Increase fromlowering cut-offgrade to 40-45%

Current levels Use of scrap Total

* Equivalent Fe grade for the low grade material

** Assumptions: Constant steel production levels of 200 million tons per year from 2020; 1.6 tons of iron ore per ton of steel

Source: Sesa Analysis


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Strategic Imperatives: Thrust on Geological Exploration

Land Allocation for Exploration Operational Leases

Leased out land for Iron Ore mining

Leased out land for mining

Regional Exploration

0.02%

0.12%

10.00%

Operational

Total leases

261

505

Greenfield Exploration investment by Australia > $500 million

Brownfield exploration are multifold

Iron Ore Resources increased by 100 fold in last 40 yrs

Indias exploration investment -$5Million (mostly in Coal)

Small countries are spending much more than India

Indias Per capita investment on Iron Ore exploration is `0.21; where as Australias investment is `1400

Source: FIMI


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Challenges for Indian Iron ore industry

Environment Clearance

Logistics Constraint

Export Ban in Karnataka

Export Duty


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Vedanta: A Diversified Natural Resources Company

Aluminum

Copper

Zinc

Iron ore

Power

Aluminum

Copper

Zinc

EBITDA: US$224mm EBITDA: US$2,296mm

Vedanta is one of the worlds leading diversified Natural Resources group

First Indian group to be listed on LSE; ranked 51 in FTSE 100

Over 34,000 employees globally, including 9,600 professionals

Industry-leading organic growth programme $19 billion capex, c. 2/3 already spent

IPO FY2003 FY2009


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Indias largest private sector producer-exporter of Iron ore

Key Highlights of Sesa Goa


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Sesa share price movement

-

100

200

300

400

500

600

700

4/2/2007 4/2/2008 4/2/2009 4/2/2010

Sesa (BSE) BSE-100

Indias largest private sector producer exporter of Iron Ore

Component of Nifty 50

Strong balance sheet with cash and cash equivalents of over $2.0 bn as at 31 December 2010

Over 4,300 employees, including +650 professional

Re

based=09April2007

Source: Bloomberg


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Sesas support for the growth of Chinese Steel Industry

14.1

3.3

0.9

+42%

200920052001

628

275

92

+27%

200920052001

Sesa Iron Ore Exports to China China Iron Ore ImportsMillion tonsMillion tons

CAGRCAGR

Source: Sesa Analysis & Metalytics


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Expansion

40.0

21.4

15.9

11.3

FY2007 FY2008 FY2009 2012e

Production Exit Capacity

Iron Ore production and proposed capacities (Million tons)

Pig Iron and Met Coke expansion

+150% to 625 ktpa Pig Iron

+100% to 560 ktpa Met coke

Commercial production expected by Q3 FY2011

Doubled iron ore production since acquisition in 2007 by Vedanta


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Sanquelim Reclaimed mine site

Mining can indeed change the face of the earth Mining responsibly is our way of life


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The 57 year journey of Sesa continues

Indian Iron Ore Scenario_PKM

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