Vedanta Resources — Debt Investor Presentation (March 2019)
25 slides from Vedanta Resources's debt investor presentation, Mar 12, 2019
Slide 1: Channelling growth opportunities
Channelling growth Vedanta Resources Ltd. opportunities OIL&GAS|ZINC&SILVER|ALUMINIUM|POWER|IRONORE|STEEL|COPPER 12 March 2019
Slide 2: Cautionary Statement and Disclaimer
Cautionary Statement and Disclaimer The views expressed here may contain information derived from statement involves risk and uncertainties, and that, although we publicly available sources that have not been independently verified. believe that the assumption on which our forward-looking statements
Slide 3: Company Overview
vedanta transforming elements Company Overview
Slide 4: Vedanta - A World-Class Natural Resources Powerhouse
Vedanta - A World-Class Natural Resources Powerhouse Overview Group Structure • World’s 6th largest diversified resources company and the largest in India Vedanta • Portfolio of large, diversified, structurally low-cost assets geared towards base metals Resources and oil Vedanta Plc Resources Ltd Di
Slide 5: Vedanta growth trajectory – Focus on growth projects
Vedanta growth trajectory – Focus on growth projects FY2012 FY Color Key 2013- ✓ Acq Cairn India Organic 18 Inorganic ✓ Cmd 100kt Dariba Pb smelter FY 2012 ✓ Exp 274MW wind power √ Cmd 1,980MW TSPL FY2010 √ Exp 1.2 mt zinc ✓ Acq VS Dempo FY 2011 √ Cmd 250kt Gamsberg ✓ Cmd 210kt Zn smelter ✓ 300kbpoe
Slide 6: Delivering on our Strategic Priorities
Delivering on our Strategic Priorities Optimise Capital Augment our Operational Allocation & Maintain Reserves & Excellence Strong Balance Sheet Delivering on Resources base • Volume growth and Preserve our License • Improving cash flows Growth • Well developed asset optimisation to Operate Opportun
Slide 7: Large & diversified asset base with an attractive commodity mix
Large & diversified asset base with an attractive commodity mix 9 months production Key Highlights Zn – 522kt ✓ Second largest integrated zinc-lead producer globally; major silver producer Zinc Pb – 145kt India Ag – 488kt ✓ Rampura Agucha – second largest zinc mine globally ✓ Gamsberg Mine opened re
Slide 8: Q3 Performance
vedanta transforming elements Q3 Performance
Slide 9: Q3 FY2019: Business Highlights
Q3 FY2019: Business Highlights Zinc India Zinc International O&G Aluminium Refined Zn-Pb: 242kt BMM: 18kt Aluminium: 502 kt Production Gross average: 187 kboepd Silver: 178kt Skorpion: 20kt Alumina: 404 kt Costs CoP ex. royalty: $997/t CoP: $1,757/t RJ blended: $7.9/bbl CoP: $2,025/t EBITDA $ 395 mn
Slide 10: Q3 FY2019: Business Highlights (cont’d)
Q3 FY2019: Business Highlights (cont’d) Power Iron Ore and Steel Copper India Copper Zambia Iron Ore Electrosteel Power sales: 3,165 MU Integrated: 24 kt Production Karnataka: 0.7mt ESL: 325kt Cathodes: 23kt TSPL availability: 81% Custom: 26 kt Costs TSPL margin: Re1.0/unit IOK CoS: $6.0/t EBITDA/t:
Slide 11: Structured Investment Transaction
Structured Investment Transaction ▪ Counterparties : CIHL, a WOS of Vedanta Limited & Volcan Investments Limited ▪ Nature of transaction : Purchase of economic interest in ~24.71 million shares (~1.8% of outstanding shares) of AA Plc ▪ Shares represent Volcan’s entitlement under POEMS ▪ Ownership &
Slide 12: Capex & Business Growth
vedanta transforming elements Capex & Business Growth 12
Slide 13: Self funded high return Capex projects
Self funded high return Capex projects…. Growth CAPEX Profile, $bn Oil & Gas Zinc Al & Power Copper Optionality Capex 1.8 Lanjigarh 4mt refinery 0.6 expansion (Phase 1) ESL 2.5mt expansion Capex guidance 1.0 1.0 1.2 1.5 Towards Zinc India expansion to at the beginning 0.9 0.3 1.2mt MIC of the yr 0.8
Slide 14: Significant production ramp-up across all businesses
…….. Leading to significant production ramp-up across all businesses Net Capex: Remaining Already $2.3bn Capex:~400 mn Invested 1,200 250 270 1,400 1.5x 947 300 1,200 907 250 190 186 1,000 1.3x 200 800 150 600 20 400 100 200 50 0 0 FY2017 FY2018 Target FY2018 FY2019 Target FY2017 FY2018 Target Oil (
Slide 15: Zinc India: On-track for ramp-up to 1.2mt MIC
Zinc India: On-track for ramp-up to 1.2mt MIC RA UG: Mid shaft loading system MIC production trend, kt Zawar new RA UG full shaft commissioned in end Q2 Underground 2mtpa mill: production, SK: Material hoisting from shaft Open pit Civil & erection Zawar mill SK: New 1.5mt mill commissioning work on
Slide 16: Aluminium: Significant progress on Strategic levers
Aluminium: Significant progress on Strategic levers Coal Linkage Feb 2018 COP at ~$ 1,740/t ▪ 3.2mt linkage Tranche IV taking coal security to 72%, 2,125 Offtake to start from Q4 FY19 ▪ 215kt of coal mined in Q3 from Chotia 1,740 Captive Alumina 1,500 ▪ Record Alumina production in Q3 at >400kt Coal
Slide 17: Oil & Gas Business: Execution being ramped up to add volumes
Oil & Gas Business: Execution being ramped up to add volumes Exploration • Gross Capex investment of $ 3.2bn (net $ 2.3 bn) being driven through 41 OALP Blocks Rajasthan integrated partnership model with global oil field service companies KG Offshore Ravva • Gas production to increase by ~ 90 mmscfd
Slide 18: Growth Projects: Wells hook up to add volumes
Growth Projects: Wells hook up to add volumes Gross Capex EUR Q2 plan for Status as on Dec 2018 Project Partner Wells Rigs ($ Million) (mmboe) Dec 2018 Dec 18 Q4 FY2019 Mangala Infill Halliburton 100 45 18 1 22 11 18 8 33 21 Bhagyam & Halliburton 140 42 40 2 33 13 32 10 42 20 Aishwariya Polymer BH-G
Slide 19: Zinc International: First shipment from Gamsberg in Dec 2018
Zinc International: First shipment from Gamsberg in Dec 2018 • Gamsberg mine was officially opened on 28th Feb’ 2019 600 • First new large scale mine opened in the decade Production (kt) • Reserve & Resources of +214mt and LOM of +30 yrs 350-400 • In Phase 1 (LoM of 13 years) – 4Mtpa of ore 250,000t
Slide 20: Staging for a strong future: Q4 and FY20
Staging for a strong future: Q4 and FY20 Volume ramp-up achieved, expansion on Favourable cost trend to continue based on drawing board improving production and Coal security Zinc India: Steel Aluminium Copper Favorable SC order, poised for a record MIC & silver production in working with Q4. On tra
Slide 21: Debt Maturity Profile & Bond yield
Debt Maturity Profile & Bond yield 21
Slide 22: Focus on Proactive Refinancing to lengthen maturity profile
Focus on Proactive Refinancing to lengthen maturity profile…. PLC Standalone Maturity Profile 3.5 Avg Mat(yrs.) 3.0 Dec-16 2.8 ⚫ Continued focus on balance Mar-17 3.2 sheet management 2.5 Dec-18 3.4 ➢ Refinanced large part of 2.0 FY19 maturity in H1 1.5 ➢ Maturity extension of standalone debt 1.0 in
Slide 23: Vedanta Bond Yield trend
Vedanta Bond Yield trend 1 2021 2022 14 10 2 3 12 15 % 4 5 13 8 6 7 10 11 8 9 6 4 Jul-2016 Oct-2016 Jan-2017 Apr-2017 Jul-2017 Oct-2017 Jan-2018 Apr-2018 Jul-2018 Oct-2018 Jan-2019 6 Vedanta Ltd dividend policy to 1 Revised Cairn merger terms 11 Tuticorin Plant Closure complement HZL policy Strong 2
Slide 24: Thank You
vedanta transforming elements Thank You 24
Slide 25: FY 2019 Guidance - Revised
FY 2019 Guidance - Revised Segment FY19 Production and CoP Zinc-Lead Integrated slightly short of FY18 production Zinc India Silver: 650 - 700 tonnes H2 COP: $950-975/t excluding royalty Skorpion and BMM: 150kt Zinc International Gamsberg: c. 20kt COP: ZI (excl Gamsberg) : $1,850 – 1,950, Gamsberg:
Vedanta Resources — Debt Investor Presentation (March 2019) on 6ix