Vedanta Limited · NSE:VEDL
Vedanta — BMO Global Metals and Mining Conference 2017
26 slides from Vedanta's conference presentation, Feb 27, 2017
Slide 1: Vedanta Limited
Vedanta Limited BMO Global Metals and Mining Conference February 2017 VEDANTA LIMITED, BMO GLOBAL METALS AND MINING CONFERENCE, FEBRUARY 2017
Slide 2: Disclaimer
Disclaimer The views expressed here may contain information derived from publicly only as of the date of this presentation, and we disclaim any responsibility available sources that have not been independently verified by us. to update or revise such statements. No representation or warranty (expres
Slide 3: Vedanta: A global diversified natural resources company
Vedanta: A global diversified natural resources company Overview Cost curve positioning • Portfolio of large, diversified, low-cost assets geared Position on respective commodity C1 cost curve towards base metals and oil I II III IV • Well-invested assets ramping up and driving cash Zinc flow growth
Slide 4: Vedanta has an attractive commodity mix
Vedanta has an attractive commodity mix Our commodity basket has captured commodity price upside, with low volatility Aluminium Zinc Copper Iron Ore 62%² Silver Brent Oil VED commodity basket¹ 700 600 Vedanta’s commodity (01 Jan 2004 = 100) basket up by 57% Commodity prices 500 since Jan’16 400 201%
Slide 5: Zinc: Fundamentals supporting price
Zinc: Fundamentals supporting price Global Zinc concentrate deficit supporting zinc prices (kt) Global Zinc Cost curve 800 CY 2016E Zinc C1 composite cost curve Surplus Century closure (500ktpa) Dugald River 600 (210 ktpa) $/t Lisheen closure Zinc Zinc (160 ktpa) Gamsberg India Intl 400 (250ktpa) to
Slide 6: Well positioned to benefit from the India story
Well positioned to benefit from the India story India’s demand is growing 18 Copper consumption (kg/capita) 4,500 16 Germany Real GDP Per Capita (USD) 4,000 14 South Korea 3,500 12 3,000 10 China 2,500 8 2,000 GDP/capita 6 Japan US 1,500 growth 1,000 4 500 2 India 0 0 2015 2020 2025 2030 0 10 20 30
Slide 7: Well-invested assets driving cash flow growth
Well-invested assets driving cash flow growth Significant capex already spent, ready to reap benefits from incremental production with low remaining capex Capex Spent (US$bn) Total Production (copper equivalent kt) Zinc-Lead Silver Copper Aluminium 2,500 Power Iron Ore Oil & Gas 2.2 2.0 Copper Equiv
Slide 8: One of the best balance sheets among global peers
One of the best balance sheets among global peers Disciplined Capital Allocation: Optimising Credit profile compared to Global Peers1 capex, focus on FCF 60% Ramp-ups at Aluminium, Power and Iron Ore Peer 6, BB- are generating significant cash flows Continued optimization of Opex and Capex 50% o Del
Slide 9: Strategic priorities remain unchanged
Strategic priorities remain unchanged Production growth and asset optimisation Disciplined approach towards ramp up De-levering the balance sheet Reduce gross debt Continued optimisation of opex and capex Continued discipline around working capital Simplifying the Group structure Complete Vedanta Li
Slide 10: Appendix
Appendix VEDANTA LIMITED, BMO GLOBAL METALS AND MINING CONFERENCE, FEBRUARY 2017
Slide 11: Zinc India
Zinc India World class fully integrated zinc producer Rampura Agucha Mine – Longitude Vertical Section Annual zinc/lead production of 904kt as of 31 March 2016 Rampura Agucha: +13mRL -80mRL − Largest zinc mine in the world1 -130mRL Present Working − 22.1 year life of mine (reserves and resources) Ma
Slide 12: Zinc International
Zinc International Overview Gamsberg is a large, high return project Vedanta’s international zinc business comprises: Project NPV ($mm) − Skorpion (Namibia, 100% owned) − Black Mountain (South Africa, 74% owned) − Gamsberg project (South Africa, 74% owned) Skorpion mine: − Strongly positioned in the
Slide 13: Oil & Gas
Oil & Gas India’s leading O&G producer Rajasthan Block Cairn India is the largest private sector producer of crude oil in India c.3,111 km2 block with rich set of options Operating c.27% of India’s domestic crude oil production1 c.40 km Currently present in eight blocks: one in Rajasthan, two on the
Slide 14: Aluminium
Aluminium Major Indian producer with established infrastructure Aluminium Costs and Margins (in $/t, for Q3 FY2017) #1 aluminium producer in India by installed capacity with 44% of 1,620 72 Q2’17 82 1,774 (560) (593) (309) (65) $247/t (167) (359) (279) total1 1,838 1,710 − Primary products are alumi
Slide 15: Power
Power Overview Power Generation Capacity – c. 9GW Vedanta is well positioned to capitalise on India’s economic growth, IPP (3.6GW) CPP (5.1GW) power deficit and large coal reserves 600MW Jharsuguda 1,215MW Jharsuguda − Building and managing captive power plants in India since 1997 (of 2400MW plant)
Slide 16: Iron Ore
Iron Ore Overview Goa iron ore costs and margin (Q3 FY2017, US$/t) Vedanta’s iron ore business is in the states of Goa and Karnataka 73 22 − First company to restart iron ore mining in Goa (August 2015) after 3 year state-wide mining bans 8 2 41 8 Leading company in iron ore mining, processing and s
Slide 17: Copper India
Copper India Overview Sustained, high utilisation rate Large custom smelting and refining business with capacity of 400ktpa (40% of total Indian capacity according to the Indian Copper cathode production (kt) Utilisation rate Minerals Yearbook 2014) 45 0 96% 100% − High utilisation: record copper ca
Slide 18: Vedanta Ltd-Cairn India merger
Vedanta Ltd-Cairn India merger Efficient capital allocation, more stable cash flows Timeline Diversified portfolio de-risks earnings volatility and Key completed events drives more stable cash flows through the cycle Vedanta Limited will announce its dividend policy BSE, NSE and SEBI approvals sough
Slide 19: Balance sheet and maturity profile
Balance sheet and maturity profile Maturity Profile of Term Debt ($9.0bn) (as of 31st December 2016) 2.2 Subsidiaries Standalone 0.5 1.7 1.7 1.3 0.7 0.7 1.1 1.0 0.3 0.5 0.4 1.7 1.0 1.0 0.7 0.8 0.7 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 & Later External term debt of $9.0bn ($6bn at Standalone and
Slide 20: Entity wise cash and debt
Entity wise cash and debt (in Rs. Crore) 31 December 2016 30 September 2016 30 June 2016 Company Debt Cash & LI Net Debt Debt Cash & LI Net Debt Debt Cash & LI Net Debt Vedanta Limited 43,168 1,247 41,921 41,285 2,114 39,171 35729 1,216 34,513 Standalone Zinc India 0 25,373 (25,373) 1,928 27,186 (25
Slide 21: Debt breakdown & funding sources
Debt breakdown & funding sources Diversified Funding Sources for Term Debt of $9.0 bn Debt Breakdown (as of 31 Dec 2016) (as of 31 Dec 2016) Short term loans- USD 3% Debt breakdown as of 31 Dec 2016 (in $bn) Bonds- INR Money Market 22% External term debt 9.0 Instrument- INR 23% Working capital 0.4 I
Slide 22: Group Structure
Group Structure Vedanta Resources Plc Divisions of Vedanta Limited 79.4% 62.9% Sesa Iron Ore Konkola Sterlite Copper (Tuticorin) Copper Vedanta Ltd Power (600 MW Jharsuguda) Mines (KCM) Aluminium (Odisha aluminium and power assets) Subsidiaries of Vedanta Ltd 59.9% 64.9% 51% 100% 100% 100% 100% 100%
Slide 23: Vedanta Resources Plc
Vedanta Resources Plc VEDANTA LIMITED, BMO GLOBAL METALS AND MINING CONFERENCE, FEBRUARY 2017
Slide 24: Vedanta Plc: Copper – Zambia
Vedanta Plc: Copper – Zambia Integrated volumes and C1 cash costs¹ Vision of 50 years of mining at world-class asset 50 213 208 195 198 194 175 169 20 0 45 212 Konkola Copper Mines plc (KCM) is one of Africa's largest 40 187 195 171 177 176 15 0 35 159 integrated copper producers 30 32 32 10 0 25 28
Slide 25: Vedanta Plc: Balance Sheet and Maturity Profile
Vedanta Plc: Balance Sheet and Maturity Profile Term Debt Maturity Profile¹ ($15.6 billion) (as of 30th September 2016) Debt at VED Plc Term Debt at Subsidiaries 4.6 1.9 3.1 2.9 2.5 1.2 1.9 1.4 2.2 1.2 2.6 1.0 2.0 1.1 1.0 0.2 0.4 0.1 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 and later Vedanta plc Ma
Slide 26: Vedanta Plc: Update on Balance Sheet and Maturity Profile (contd.)
Vedanta Plc: Update on Balance Sheet and Maturity Profile (contd.) Net Debt at $7.9bn and undrawn committed facilities of US$0.5 billion as at 31 December 2016 Issued $1 billion bond at 6.375% with 5.5 year tenor to proactively refinance 2018 and 2019 bonds through a concurrent tender offer − Receiv
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