Steve Thomas Riversdale Mining Limited South African Anthracite Exports: The Way Forward

Transcription

1 Steve Thomas Riversdale Mining Limited South African Anthracite Exports: The Way Forward

2 Riversdale Mining i South African Anthracite Exports: The Way Forward Steve Thomas, CFO Riversdale Holdings (Pty) Ltd Coaltrans World Coke & Anthracite Conference Krakow Poland March Disclaimer: The information in this document is provided for information purposes only by Riversdale Mining Limited. No representation or warranty is made as to the accuracy, completeness or reliability of the information. 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 Riversdale Mining Limited. 1

3 World Coke & Anthracite Summit The South African Anthracite Market: a. Overview of the market size and product distribution History Current performance b. Producer location c. Port facilities available for export d. Challenges facing producers with exporting e. Typical qualities Products Unsized Sized f. Contact details 2

4 SOUTH AFRICA ANTHRACITE SALES TONNES PER CALENDAR YEAR (DME DATA; EXCEPT FOR 2007 AND 2008: CAMR) 5,500,000 5,000,000 Total Sales Inland Sales Export Sales 4,500,000 4,000,000 3,500,000 Tonnes 3,000,000 2,500,000 2,000,000 1,500,000 1,000, , Year 3

5 SOUTH AFRICAN ANTHRACITE SALES - MARKETS 1,058,310mt 38% 1, 201, 624mt 43% Local Sales (S.A. Markets) Exports (Sized) 509, 399mt 18% Exports (Unsized) 2008 CALENDAR YEAR (METRIC TONNES) Local Sales: 1, 201, 624mt Total lsl Sales: 2, 769, 333mt Figures courtesy of Resource - net (Andrew Jones) Exports (Sized): 509, 399mt Exports (Unsized): 1, 058, 310mt Exports Total: 1, 567, 709mt 4

6 SOUTH AFRICAN ANTHRACITE PRODUCER LOCATIONS Producers Ports 5

7 PORT FACILITES RICHARDS BAY COAL TERMINAL World s largestsingle single coal export terminal Current design capacity of 76 million tons Coal railed from approximately 49 mines Mines are approximately 650 to 850 km from Richards Bay 200 truck trains carrying approximately 16,500 mt coal Phase 5 to be completed mid 2009, will increase the design capacity 91 million tons. DRY BULK COAL TERMINAL Also in Richards Bays, opposite RBCT General Cargo Terminal, including coal and anthracite One alternative to the RBCT for exporters who do not have RBCT entitlement For un sized products only Far more expensive than RBCT, but does provide an alternative Used successfully by some Junior Producers. BULK CONNECTIONS TERMINAL (BCT) DURBAN PORT Privately owned terminal Bidvest Group Only soft loading facility in South Africa Geared primarily to load size sensitive coal & anthracite 2008 Total throughput of 1, 989, 075 metric tons 2008 Total anthracite exports of 394, 579 metric tons Max draft of 10.3 metres 6

8 TYPICAL PRODUCTS AND MARKETING LARGE NUTS 45 X 70 DUFF 1 x 10 PEAS 8 X 25 NUTS 20 X 45 MIDDLINGS 0 X 10 PRODUCTS 7

9 SOUTH AFRICAN ANTHRACITE PRODUCERS TYPICAL QUALITIES ANTHRACITE PRODUCERS QUALITIES EXPORT UNSIZED BASIC ELEMENTS No 1 No 2 No 3 No 4 ASH (%) < 17 < 18 < 15,5 < 16 VOLATILES (%) FIXED CARBON (%) > 72 > 73 > 80 >75 SULPHUR (%) < 1,80 < 0,85 < 1,28 < 0,9 * DRY BASIS 8

10 SOUTH AFRICAN ANTHRACITE PRODUCERS TYPICAL QUALITIES ANTHRACITE PRODUCERS QUALITIES EXPORT SIZED BASIC ELEMENTS No 1 No 2 No 3 No 4 ASH (%) < 14 < 17 < 10,9 < 15 VOLATILES (%) FIXED CARBON (%) > 77 > 75 > 84 >76 SULPHUR (%) 1,55 2,00 < 0,85 < 1,1 < 0,85 * DRY BASIS 9

11 WHY BUY SOUTH AFRICAN ANTHRACITE? Long established reputable producers Quality consistency Limited product contamination (especially when compared to some other producing countries) World class soft loading facility in the BCT at Durban Can load all year round, no seasonal interferences and the most compelling reason is Very pleasant people to deal with, who always honour contracts. 10

12 CONTACT DETAILS Riversdale Holdings Steve Thomas Cell: Zululand Anthracite Colliery (ZAC) Andrew Rayment Cell: Somkhele Henrique Pinheiro Cell: Springlake Colliery Henrique Pinheiro Cell: Vaalkrantz Colliery (Leeuw Mining) John Beck Cell:

13 World Coke & Anthracite Summit Riversdale Mining Limited: a. Company profile b. Statistics Zululand Anthracite Colliery c. Mozambique Statistics Next major coking coal basin Locality map - Area and pictures Key elements to success Qualities Freight competitiveness Track record Countries growth 12

14 RIVERSDALE MINING LIMITED - CORPORATE PROFILE Market $3.04 per share A$572.7 million 15.3% 2.3% Shares million 40.3% Options 20.1 million Net Cash ~ A$ 325 million 24.4% As of 10/Mar/2009 Passport Capital 15.62% 2.0% 12.7% Australian Institutions 3.0% Talbot Group 18.87% 87% Tata Steel Ltd 10% As of 31/Dec/2008 UK Institutions North American Institutions Other Institutional Corporates Related Parties (predominantly management) Private Investors ~ 60% institutional ownership Source: Thomson Reuters As of 30/Jan/

15 ZULULAND ANTHRACITE COLLIERY (ZAC) A SNAPSHOT Production kt ROM kt saleable Reserves / Resources 17 yr LOM Significant expansion potential (Ngwabe block) Anthracite market Demand driven by the metal refining industry Relatively inelastic no price-competitive substitutes Constrained supply from major producers (Vietnam, Russia) ZAC infrastructure Excellent infrastructure US$43m expansion development Spare capacity ZAC location Situated along the Richards Bay coal line (RBCT export port) Close to major markets (chrome, electrode paste & mineral sands) MINERAL RESOURCES & RESERVES ZAC Resource Category Measured 11.2 indicated 18.7 Inferred 23.7 Gross in Situ Tonnes (Mt) Reserve Category Proved Probable ROM Tonnes (Mt) Total 53.6 Total

16 MOZAMBIQUE: A WORLD CLASS COKING COAL OPPORTUNITY 2.1 Billion tonne Coal Resource A$235 M capital raising completed TATA: A$100 M + Strategic joint venture partner Achievements Acquired tenements (>53,000 ha) in August 2007 Quality: premium hard coking coal and thermal coal 20Mt/a coal Mining Study lodged with government Rail, Port & Power MOU s Appointment of International Advisory Board Huge exploration potential >250,000 ha Potential Prime position in the Moatize basin Major multi pit operation Sea freight advantages into India, Brazil & Europe Strong financials: > AUD 340M cash available to develop share of project TATA Steel JV to support future development & regional growth 15

17 MOATIZE: THE NEXT MAJOR COKING COAL BASIN The largest undeveloped coking coal region in the world? RIV: largest holding in the Moatize basin Benga: 2.1 Billion tonne Coal Resource 1.0 Bt Measured & Indicated 1.1 Bt Inferred Drilling on 21 additional licenses throughout 2009 Premium hard coking and thermal coals Competitive freight rates into high growth markets in India and Brazil Potential to access European coking coal market The experience to maximise the opportunity Southern African experience: ZAC mine, RSA Tata Steel JV partner 16

18 RIVERSDALE CAMP NEAR TETE Riversdale Camp near Tete Aerial view of Tete 17

19 COAL SAMPLES IN MOZAMBIQUE Coal Core, April 2008 Large Diameter Coal Core 18

20 COAL OUTCROP IN MOZAMBIQUE 19

21 BENGA EXPLORATION SITE 20

22 THE KEY ELEMENTS FOR SUCCESS 21Billi 2.1 Billion tonne Inferred dr Resource (JORC) 1 Billion tonnes of Measured and Indicated Resources Likely to be amenable to open cut mining Quality indicative of hard coking and thermal coal products Rail development to be completed by 2H 2009 Rail MOU for 6 Mt signed Consortium developing rail (CFM, Rites and Ircon) Development of the Beira port Port MOU signed Government has announced $500 M plans for development Small existing capacity Power station project Government approval to start feasibility study 500 MW to be commissioned in 2012 Building to 2000 MW by 2015 in 500 MW units Joint venture with TATA Steel 2010 hard coking coal production and export Next target: One of the worlds major coking coal producers 21

23 BENGA COAL QUALITIES Benga Hard Coking Coal # Benga Export Thermal # Volatile Matter (%, ad) 21.8 Ro Max 1.4 CSN (swell index) 8.5 CV GAD (kcal, kg) 6390 Ash (%, ad) * 22 Moisture (%, ad) 0.8 Vitrinite % 81 Ash (%, ad) * 10.5 Volatile Matter (%, ad) 20 HGI 80 Gieseler max fluidity 2.4 (log) Ash fusion (IDT, C) 1425 # Quality parameters are a weighted average of targeted seams across the Benga resource. Mine sequencing or selectivity has not been optimised * Products based on target ash which may be subject to change based on economic/quality optimisation 22

24 Benga HCC uniquely positioned qualities Benga hard coking coals Schapiro & Gray ASTM Stability prediction contours 23

25 MOZAMBIQUE: FREIGHT A GROWING COMPETITIVE ADVANTAGE Moatize coking coal will enjoy a competitive advantage into 46% of seaborne trade of hard coking coal Supply of seaborne hard coking coal (136 millions tonnes p.a.) Competitive advantage into 46% of seaborne trade of hard coking coal India & Brazil to account for 49% of demand growth* BHPB / Mitsubishi Anglo / Mitsui 33% 16% Elk Valley 14% 8% 7% 7%6% 7% Xstrata Rio Tinto Other Aus Other Canada USA Poland, China, Russia, NZ 46% India Brazil EU Other Europe Other China Taiwan Japan South Korea Mt Met. Coal - Yearly Demand Growth Brazil 25 India 20 China Rest of World Australia Canada USA Other * Demand growth of seaborne hard coking coal Source: Barlow Jonker, McCloskey and AME 24

26 MOZAMBIQUE: A TRACK RECORD OF SUCCESSFUL RESOURCE DEVELOPMENT Mozal Aluminium Smelter 506 kt pa aluminium smelter Established in 1998 by BHP Billiton, Mitsubishi & IDC US$ 2 B investment Completed 13 months early and US$ 295 M under budget Sasol Gas Pipeline & Exploration 120 million GJ pa pipeline 865 km pipeline completed in 2004 US$ 1.2 B investment Two producing gas fields and active exploration Moma Titanium sands mine (Kenmare) 700 kt pa ilmenite project, developed by Kenmare US$ 500 M investment Entered production in

27 MOZAMBIQUE: A COUNTRY EXPERIENCING STRONG GROWTH Over 8% real GDP average growth over the last decade 1 Consistently higher than Africa & equivalent to emerging geconomies Mega project sectors of Aluminium, Gas, Electricity and Mining driving growth Industry and manufacturing make up 45% of GDP (Agriculture 22%) Tight monetary policies have helped to ease inflation % Real GDP Growth Mozambique Emerging economies Africa World Mozambique s growth fuelled by strong investment US$ 7.5 Bn in projects approved in 2007 Consortium investment in Sena rail line (US$370 M) and Beira port US$ 1.8 bn p.a. in development assistance invested in Mozambique in 05 & 06 and projected to remain at this level until 2010 at least 1 IMF World Economic Outlook,

28 BengaCoal Resources COMPETENT PERSON REPORTS The Benga Coal Resources quoted in this announcement are based on Report No 269/01/02, Coal Resources, Benga Project as at 15th August 2008, compiled under the supervision of Mr. Kerry Whitby, who is a Fellow of the Australasian Institute of Mining and Metallurgy and Managing Director of McElroy Bryan Geological Services Pty Ltd (MBGS). Kerry Whitby has more than 30 years experience as a geologist in the resources industry and more than 20 years experience in the estimation of coal resources for coal projects and coal mines both in Australia and overseas. This expertise has been acquired principally through exploration and evaluation assignments at operating coal mines and coal exploration areas in Australia s major coal basins and in other coal basins throughout the world. With this level of experience, he is adequately qualified as a Competent Person as defined in the 2004 edition of the JORC Code. The Coal Resource estimate for the Benga Licence, (881L) Mozambique presented in this report has been carried out in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (September 2004) prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists andminerals Councilof Australia. ZAC Coal Resources & Reserves Information that relates to geology, drilling, mineralisation and Mineral Resources and Ore Reserves estimates for Zululand Anthracite Colliery (ZAC) is based on information compiled by J Liebenberg, who is a member of South African Council for Natural Scientific Professions. Mr Liebenberg has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person under the meaning of the JORC Code. Mr Liebenberg, an employee of Zululand Anthracite Colliery (Pty) Limited has given his consent to the Public Reporting of these statements concerning geology, drilling and mineralisation in this format. Benga Coal Quality The coal quality information in this announcement has been compiled under the supervision and reviewed by Mr. Andrew Meyers, who is a Member of the Australasian Institute of Mining and Metallurgy and Director of A&B Mylec Metallurgical Consultants Pty Ltd. Andrew Meyers has more than 19 years experience in coal processing and coal quality for coal projects and coal mines both in Australia and overseas. With this level of experience, he is adequately qualified as a Competent Person as defined in the 2004 edition of the JORC Code. Andrew Meyers consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears. 27

29 Thank you Any Questions? 28