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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
Closing R&R(Goa & Kar)
FY-2008
MiningFY-2008
14
AdditionFY-2008
54
Closing R&R(Goa & Kar)
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
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