Bhp Group Ltd · ASX:BHP
Bhp — BHP Billiton — Corporate Update (November 2003)
26 slides from Bhp's corporate update, Nov 4, 2003
Slide 1: Analyst Visit To Khutala
Analyst Visit To Khutala T Coetzer 4 November 2003 1
Slide 2: Agenda
Agenda Energy Coal Overview South African Coal Industry context Ingwe Khutala Q&A
Slide 3: BHP Billiton Energy Coal
BHP Billiton Energy Coal • One of the world’s largest producers and marketers of export thermal coal • Major supplier to domestic markets • Diverse operations and markets along with multi-source supply capability • Key assets in South Africa, USA, Colombia and Australia • Focus on enhancing our worl
Slide 4: Energy Coal business overview
Energy Coal business overview Operated Non operated 33 Marketed Traded Traded Mtpa 22MMtpa Seaborne trade New tpa NewMMexico exico 23 13 M tpa Export Supply 13 M tpa Mtpa ≈2 M tpa Domestic Supply Ingwe Ingwe 58 58MMtpa tpa QLD/NSW QLD/NSWCoalCoal Kalimantan Kalimantan 55MMtpa Colombia 14 tpa Colombi
Slide 5: Agenda
Agenda Energy Coal Overview South African Coal Industry context Ingwe Khutala Q&A
Slide 6: The challenges in South Africa - Implications for future investment
The challenges in South Africa - Implications for future investment Strong Rand Minerals Bill Money Bill Declining export resource Volatile export Inflation Socio-economic prices pressures Ingwe Fatalities Export Price Index % 20 125 PESO/t 100 10 RAND/t 75 0 50 FY96 FY00 FY04 FY02 FY03 FY04
Slide 7: Agenda
Agenda Energy Coal Overview South African Coal Industry context Ingwe Khutala Q&A
Slide 8: Ingwe Operations
Ingwe Operations Middelburg* Optimum* Type O/C mine Type O/C mine PRETORIA Life 31 yrs Life 17 yrs Middelburg Klipspruit JOHANNESBURG Project Koornfontein* Douglas Optimum Type U/G mine Khutala Koornfontein Life 5 yrs Khutala Ric h ar d s Ba Type U/G mine yR VEREENIGING Douglas* ail L in e Type O/C
Slide 9: South African Coal Industry 2002
South African Coal Industry 2002 SA Market Share Export Competitors Exports Eskom Others 15% Ingwe 36% Xstrata Inland 21% Anglo coal 28% Sasol Total market 227Mt
Slide 10: Ingwe's Market Share 2002
Ingwe’s Market Share 2002 250 200 150 Million tons 100 24% 36% 35% 0% 50 13% 0 Export Eskom Sasol Local Total Total Ingwe
Slide 11: The multi product concept
The multi product concept Higher risk / margin Low risk / Low margin Low recovery of asset High recovery of resource Export Eskom Mine 60% Mine 98% 40% 2% Medium risk / High margin Optimise resource Multi- 47% Mined Product Product Mine Export Sales 33% Eskom Prod. Rejects 20%
Slide 12: What constitutes world class assets
What constitutes world class assets
Slide 13: Low cost supply position
Low cost supply position Delivered cash cost - US$/t Europe Optimum Douglas Carbones del Cerrejon Middleburg Cerrejon Norte Koornfontein Rietspruit Venezuela USA Colombia South Africa Mt Asia Delivered cash cost - US$/t Bayswater Arutmin Future Mount Arthur North Canada USA Indonesia Australia Mt So
Slide 14: Our world class assets were robust to 'Perfect Storm'
Our world class assets were robust to ‘Perfect Storm’ $50 Atlantic CIF Cash Cost (US$/t) (2003 CIF Cost – 8 RAND/USD) 40 “Perfect Storm” delivered price Asia 30 Ven ezuela USA South Africa Ru ssia Polan d 20 Colombia Cerrejon Coal 0 Koornfontein Mt Optimum Middelburg Douglas $50 Pacific CIF Cash Cos
Slide 15: Organisation transformation required
Organisation transformation required
Slide 16: What is Phenduka?
What is Phenduka? HSEC •5 Streams •Target improvement in: •Costs •Throughput •Capital efficiency
Slide 17: Overview of the Phenduka process
Overview of the Phenduka process •Completed • Resourcing • Diagnostic of implemen- • Implementation wave 1 • Implementation wave 2 tation wave 1 – Analysed key EBIT – Identified and – O&M – Increase saleable – O&M – second wave of improvement areas and freed up ~40 full tonnes operations found long
Slide 18: Energy Coal has previous experience on programmes like Phenduka
Energy Coal has previous experience on programmes like Phenduka
Slide 19: Recent Projects
Recent Projects Klipfontein Project WITBANK DUVHA-POWER-STATION KLIPB ANK N Boschmanskrans Project Middelburg KLIPFONTEIN HENDRINA-POWER Optimum Kwagga -STATION Douglas Project Koornfontein Van Dyks Drift GLORIA HENDRINA
Slide 20: Boschmanskrans: Douglas
Boschmanskrans: Douglas • Previously mined No.2 seam • 130 million tons remaining • Truck and shovel strip mine • Export/Local power station markets • 20 year mining life • R 700M Capital • Project on budget
Slide 21: Kwagga Project: Optimum
Kwagga Project: Optimum • Asset swap • Expansion into adjacent reserves • Reserves : 197 m in-situ 143 m saleable • Project life 2003 to 2018 (15 years) • Capital investment R 390 m • Infrastructure: 18km conveyor, river crossings, coal tips, dragline walkways & haulroads
Slide 22: Klipspruit – potential as a future project
Klipspruit – potential as a future project Phola • Multi product operation, N12 • Production rate of between 6 to 8 Mtpa, • Opencast Dragline operation, • Underground bord and pillar operation, • Possibility does exist to expand Ogies both the reserve and the 555 tonnages. Mini Pit Operational OPENC
Slide 23: Agenda
Agenda Energy Coal Overview South African Coal Industry context Ingwe Khutala Q&A
Slide 24: Wrap up – initiatives under consideration
Wrap up – initiatives under consideration Ingwe’s world class assets exposed to adverse external environment Moving Ingwe performance to the next level Undertaking structural changes in the assets and overall structure Ensuring profits remain resilient to a changing environment Stormproofing Our Ass
Slide 25: Agenda
Agenda Energy Coal Overview South African Coal Industry context Ingwe Khutala Q&A
Slide 26: THE END
THE END od bhpbilliton