Nmdc Limited · NSE:NMDC
Nmdc — Investor Presentation (February 2010)
39 slides from Nmdc's investor presentation, February 2010
Slide 1: NMDC Limited Presentation
NMDC Limited Presentation February 2010 Strictly Private and Confidential
Slide 2: Disclaimer
Disclaimer This Presentation is for information purposes only and does not constitute an offer, solicitation or advertisement with respect to the purchase or sale of any security of NMDC Limited (the "Company") and no part of it shall form the basis of, or be relied upon in connection with, any cont
Slide 3: Presentation Outline
Presentation Outline A. Key Themes B. Corporate Social Responsibility Appendix A1. Board and Senior Management Appendix A2: Process to Acquire & Renew Mining Leases in India 3
Slide 4: A. Key Themes
& A. Key Themes
Slide 5: NMDC Limited: Key Themes
NMDC Limited: Key Themes 1 Established 8 Sustained corporate financial and performance * operating 2 history Largest Strong in- producer of house iron ore in technical India by capabilities volume 7 Access to 3 Focused abundant expansion high quality plans iron ore reserves Strong Low-cost 6 domesti
Slide 6: NMDC Limited: Key Themes
NMDC Limited: Key Themes 1 Established 8 Sustained corporate financial and performance * operating 2 history Largest Strong in- producer of house iron ore in technical India by capabilities volume 7 Access to 3 Focused abundant expansion high quality plans iron ore reserves Strong Low-cost 6 domesti
Slide 7: NMDC Limited: A pioneer in the Indian mining industry
NMDC Limited: A pioneer in the Indian mining industry A pioneer in the Indian mining industry - established in 1958 and has the objective of exploring and exploiting minerals and manufacturing and selling products obtained therefrom NMDC has reserves and resources of 1,360.6* million metric tonnes o
Slide 8: NMDC Limited: Key Themes
NMDC Limited: Key Themes 1 Established 8 Sustained corporate financial and performance * operating 2 history Largest Strong in- producer of house iron ore in technical India by capabilities volume 7 Access to 3 Focused abundant expansion high quality plans iron ore reserves Strong Low-cost 6 domesti
Slide 9: Largest producer of iron ore in India
Largest producer of iron ore in India In FY2009, NMDC contributed to 13% of India’s total iron ore production and produced 28.5 million tonnes of iron ore Location of NMDC’s principal mining facilities Historic production at key mining locations 25.0 (million tonnes) 20.0 23.0 22.2 20.6 15.0 17.5 15
Slide 10: NMDC Limited: Key Themes
NMDC Limited: Key Themes 1 Established 8 Sustained corporate financial and performance * operating 2 history Largest Strong in- producer of house iron ore in technical India by capabilities volume 7 Access to 3 Focused abundant expansion high quality plans iron ore reserves Strong Low-cost 6 domesti
Slide 11: Access to high quality iron ore reserves and resources
Access to high quality iron ore reserves and resources NMDC has access to large reserves of high grade iron ore, predominantly greater than 64% Fe content Reserves and resources of 1,360.6* million metric tonnes (mT) as at January 1, 2010** 900 829.5 800 700 600 (million tonnes) 500 400 300 201.0 18
Slide 12: Reserves and Resources of NMDC in the Bailadila Range
Reserves and Resources of NMDC in the Bailadila Range Total reserves and resources of 1,212.7 mT as at January 1, 2010 of which 424.6 mT is accounted for by mining leases yet to be executed* Iron ore deposits of NMDC in the Bailadila Range Deposit wise details as at January 1, 2010 (in mT) 350.0 80.
Slide 13: Reserves and Resources of the Donimalai Complex
Reserves and Resources of the Donimalai Complex The Donimalai Complex had total reserves and resources of 147.9 mT as at January 1, 2010 Iron ore deposits in the Donimalai Complex Deposit wise details as at January 1, 2010 (in mT) 140 130.4 69.0% 66.8% 120 67.0% 100 64.0% 65.0% 80 63.0% 60 61.0% 40
Slide 14: NMDC Limited: Key Themes
NMDC Limited: Key Themes 1 Established 8 Sustained corporate financial and performance * operating 2 history Largest Strong in- producer of house iron ore in technical India by capabilities volume 7 Access to 3 Focused abundant expansion high quality plans iron ore reserves Strong Low-cost 6 domesti
Slide 15: Low-cost producer of iron ore
Low-cost producer of iron ore Operating expenses* per tonne of iron ore produced Factors enabling low cost of production of NMDC 60 y Highly mechanised mines leading to lower wastage 51.3 50 y Access to relatively large and inexpensive labor and talent pool in India 40 36.3 (US$/tonne) y Cost manage
Slide 16: NMDC Limited: Key Themes
NMDC Limited: Key Themes 1 Established 8 Sustained corporate financial and performance * operating 2 history Largest Strong in- producer of house iron ore in technical India by capabilities volume 7 Access to 3 Focused abundant expansion high quality plans iron ore reserves Strong Low-cost 6 domesti
Slide 17: Strong domestic and export demand potential
Strong domestic and export demand potential India was a net India historical crude steel production Consumption of iron ore in India importer of finished steel in 2008-09 60 55.1 100 53.1 49.5 CAGR = 17% 50 45.8 2010 production of 80 90.0 (in million tonnes) 85.0 (million tonnes) iron ore in India i
Slide 18: Strong domestic and international customer relationships
Strong domestic and international customer relationships Key domestic customers (FY2009 offtake in mT) Key international customers y Japanese steel mills (LT contract) Japan y South Korean steel China South mills (LT contract) Korea Gujarat CG units Essar (7.2) Chhattisgarh y Chinese (spot ISPAT (2.
Slide 19: Key arrangements in regard to domestic and export sales
Key arrangements in regard to domestic and export sales Key terms of domestic offtake contracts Key terms of export offtake contracts y Domestic offtake contracts are generally for a duration of 5 years y Exports to China are linked to spot prices y Initial prices and the price adjustment mechanism
Slide 20: Efficient logistics available to customers
Efficient logistics available to customers Kirandul and Bacheli mining complexes Traffic handled through various modes from the Kirandul and Bacheli mining complexes (in mT) y The east coast network of the Indian Railways connects 25 the Kirandul and Bacheli mines to Vizag Port 21.8 21.4 20.4 – 3 lo
Slide 21: NMDC Limited: Key Themes
NMDC Limited: Key Themes 1 Established 8 Sustained corporate financial and performance * operating 2 history Largest Strong in- producer of house iron ore in technical India by capabilities volume 7 Access to 3 Focused abundant expansion high quality plans iron ore reserves Strong Low-cost 6 domesti
Slide 22: Focused strategy of diversification and value addition
Focused strategy of diversification and value addition Business strategy Mining projects: Operating and under planning Panthal Magnesite y Value addition to iron ore – beneficiation, Project, pellets, sponge iron, steel Arki Lime Jammu and Kashmir Sasangada, Stone Ghatkuri Iron Forward Himachal Ore
Slide 23: Expansion of mining activities related to iron and steel
Expansion of mining activities related to iron and steel Projects proposed to be executed Projects being executed by NMDC Projects proposed through MOU* through Joint Ventures Under expansion • Deposit 11B, 114.3mT reserves • Kumaraswamy, 130.4mT reserves • Mining leases obtained for the above Await
Slide 24: Value addition activities in relation to iron ore
Value addition activities in relation to iron ore Projects being executed by NMDC Projects proposed through MOU* Under planning • Beneficiation plant at Donimalai, Karnataka BENEFICIATION – Transform waste with c.35% Fe content (BHJ/BHQ material) to high grade concentrate of Fe content >64% – R&D ce
Slide 25: Expansion of mining activities in relation to other minerals
Expansion of mining activities in relation to other minerals Projects proposed to be executed Projects being executed by NMDC Projects proposed through MOU* through Joint Ventures Under development • 2 coal blocks allotted by the Ministry of Coal in July 2007 – Shahpur East and West blocks, Shahdol,
Slide 26: NMDC Limited: Key Themes
NMDC Limited: Key Themes 1 Established 8 Sustained corporate financial and performance * operating 2 history Largest Strong in- producer of house iron ore in technical India by capabilities volume 7 Access to 3 Focused abundant expansion high quality plans iron ore reserves Strong Low-cost 6 domesti
Slide 27: Technical capabilities
Technical capabilities Resource Planning Research and Development NMDC has strong in-house capability to undertake exploration to Research and development (R&D) division established in 1970, expand its reserves as well as to diversify its production located at Hyderabad, undertakes in-house research
Slide 28: NMDC Limited: Key Themes
NMDC Limited: Key Themes 1 Established 8 Sustained corporate financial and performance * operating 2 history Largest Strong in- producer of house iron ore in technical India by capabilities volume 7 Access to 3 Focused abundant expansion high quality plans iron ore reserves Strong Low-cost 6 domesti
Slide 29: Sales growth and profitability
Sales growth and profitability Sales growth and profitability have been sustained in the recent past 2,000 90% 1,864 79.0% 78.1% 78.4% 1,800 80% 73.8% 1,600 1,462 70% 1,394 1,400 55.4% 60% 51.0% 51.2% 50.7% 1,200 (margins %) 45.4% 50% (US$mn) 986 1,089 1,000 946 851 35.3% 40% 779 800 714 628 30% 600
Slide 30: Historical Financial Performance
Historical Financial Performance Cash balances Capital Expenditure 3,000 2,626 100 84.5 2,500 2,118 80 2,000 (US$mn) 1,565 (US$mn) 1,500 60 49.8 1,054 1,000 676 40 29.0 26.8 414 24.5 500 20 7.6 0 0 FY2005 FY2006 FY2007 FY2008 FY2009 9MFY2010 FY2005 FY2006 FY2007 FY2008 FY2009 9MFY2010 EBITDA margin
Slide 31: B. Corporate Social Responsibility
B. Corporate Social Responsibility
Slide 32: Corporate Social Responsibility ("CSR") initiatives
Corporate Social Responsibility (“CSR”) initiatives Self-employment Education Infrastructure Development CSR Focus Health Drinking Water Medicare y Beneficiaries are mostly tribals / backward sections in the proximity of the mines y Services are provided in consultation with the local people and loc
Slide 33: Appendix
& Appendix
Slide 34: A1. Board and Senior Management
A1. Board and Senior Management
Slide 35: Organisation Structure
Organisation Structure RANA SOM (Chairman-cum-Managing Director) KUMAR RAGHAVAN V.K. SHARMA S. VENKATESAN N.K. NANDA S. THIAGARAJAN Company Secretary Director Director (Production) Director (Technical) Director (Finance) & Executive (Commercial) Director A.S. AHLUWALIA G.B. JOSHI General Manager, Ex
Slide 36: Highly Qualified Board and Experienced Management
Highly Qualified Board and Experienced Management Mr. Rana Som - y Mr. Rana Som holds post-graduate qualifications in Economics and Personnel Management Chairman & y He has approximately 38 years of managerial experience and has been the CMD of Hindustan Copper Limited and a Managing Director Direct
Slide 37: Highly Qualified Board and Experienced Management
Highly Qualified Board and Experienced Management Ms. Teresa Bhattacharya y Ms. Teresa Bhattacharya I.A.S retired as Chief Secretary, Government of Karnataka Non Executive & y She also served as Secretary, Dept of Energy, Government of Karnataka and Chairman and Managing Director of NGEF Independent
Slide 38: A2. Process to Acquire & Renew Mining Leases in India
A2. Process to Acquire & Renew Mining Leases in India
Slide 39: Procedure to procure and renew mining lease in India
Procedure to procure and renew mining lease in India y RP application to respective State Government (SG) covering the intended area where the Company will Stage 1 engage in exploration for specific minerals Reconnaissance y RP grant by respective SG and RP deed execution Permit (RP) y Reconnaissanc