Bhp Group Ltd · ASX:BHP
Bhp — BHP Billiton — Corporate Update (November 2007)
81 slides from Bhp's corporate update, Nov 2, 2007
Slide 1: BHP Billiton Coal CSG Analyst Visit – Hunter Valley Energy Coal
BHP Billiton Coal CSG Analyst Visit Hunter Valley Energy Coal Dave Murray President – Coal 2nd November 2007
Slide 2: Important notices
Important notices Reliance on third party information The views expressed here contain information that have been derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the informatio
Slide 3: Safety briefing / Coal CSG in New South Wales
Safety briefing Coal CSG in New South Wales The energy world we play in How we play – strategy and growth Hunter Valley Energy Coal Page 2
Slide 4: Coal CSG in New South Wales – Dave Murray
Safety briefing Coal CSG in New South Wales – Dave Murray The energy world we play in How we play – strategy and growth Hunter Valley Energy Coal Page 3
Slide 5: Hunter Valley Energy Coal visit agenda
Hunter Valley Energy Coal visit agenda 08:00 Bus travel to Muswellbrook Arrive at HVEC Coffee/tea on arrival 09:00 Coal CSG in NSW – Dave Murray 09:25 The energy world we play in – Mike Henry 10:10 Morning Tea 10:25 How we play – strategy & growth – Dave Murray, Neil Scott 11:10 HVEC operations – Ed
Slide 6: Presentation Team
Presentation Team Coal CSG Corporate Dave Murray – President Neil Scott – Chief Development Officer Mike Henry – Marketing Director, Energy Coal Richard Malysiak – VP Project Delivery Barry Formosa – VP Health, Safety, Environment & Community HVEC Eduard Haegel – Chief Operating Officer Page 5
Slide 7: Almost 90% annual coal production is thermal coal
Almost 90% annual coal production is thermal coal Production and Consumption 5,370 Mt (100%) Met Coal Other Thermal Coal (24%) 698 Mt (13%) 4,671 Mt (87%) Electricity Steel (52%) (13%) Heat (11%) Domestic Seaborne Domestic & Landborne Seaborne 494 Mt (9%) 204 Mt (4%) traded 4,060 Mt (77%) 525 Mt (10
Slide 8: The seaborne thermal coal market has more than doubled over the past 10 years
The seaborne thermal coal market has more than doubled over the past 10 years… Global Traded Thermal Coal demand CAGR 1996–2006 550 2006 : 525 Mt 500 1996 : 261 Mt 0.3% Other Europe 450 7.0% Italy Pacific Demand 7.2% CAGR 7.8%Germany 400 8.7% Spain Imports (Mtpa) 350 Atlantic 17% UK 15% Americas 300
Slide 9: Increased consolidation has improved industry structure within major supply basins
…and with increased consolidation, industry structure has improved particularly within major supply basins 2006 Global Energy Coal Flows 525Mt1 Global – Fragmented Industry Russia Xstrata 9% Dominated by SUEK, KRU Bumi 8% 184Mt China 66Mt Dominated by Shenhua, BHP Billiton 8% 54Mt 163Mt Other China
Slide 10: Our business benefits from a multi-source production base
Our business benefits from a multi-source production base New Mexico Coal HVEC Cerrejón BECSA LEGEND BECSA-MINES BECSA-RESOURCE DOMESTIC COAL AREAS Page 9
Slide 11: Our Energy Coal businesses
Our Energy Coal businesses BHP Billiton Energy Coal South Africa (BECSA) (100% BHP Billiton except Douglas and Middelburg 84% BHP Billiton) Operations Douglas Middelburg Khutala Klipspruit Optimum Marketing Hunter Valley Energy Coal The Hague (100% BHP Billiton) Singapore Johannesburg Tokyo New Mexi
Slide 12: We have simplified our portfolio and increased production at HVEC and Cerrejón
We have simplified our portfolio and increased production at HVEC and Cerrejón since the merger… Delmas sold ZAC sold Rietspruit closed Koornfontein sold 90 80 70 60 Production (Mtpa) Hunter Valley 50 Cerrejon 40 New Mexico BECSA 30 20 10 0 FY02 FY03 FY04 FY05 FY06 FY07 Cerrejón adds Cerrejón expand
Slide 13: A deep inventory of projects and options
…and have a deep inventory of projects and options Proposed capex as at Nov 2007 >$1B $<0.5B $0.5–1B Western Artic Khutala Brownfield South Africa Opt Exp MAU 2 Greenfield Australia Leandra Khutala 5 Americas South seam NCIG Expansion T-Project Weltevreden Cerrejón Opt Exp DMO Navajo MAC MAC South P
Slide 14: The energy world we play in – Mike Henry
Safety briefing Coal CSG in New South Wales The energy world we play in – Mike Henry Increasing energy demand Impact on seaborne thermal coal Short term issues BHP Billiton marketing How we play – strategy and growth Hunter Valley Energy Coal Page 13
Slide 15: Primary energy consumption is strongly correlated to economic development
Primary energy consumption is strongly correlated to economic development… Energy intensity per capita 70 USA (1960-2004) 60 (Barrels Oil Equivalent) Energy Use per Capita 50 Germany 40 (1965-2004) 30 S. Korea (1965-2004) Japan 20 China Taiwan (1960-2004) 10 (1965-2004) India (1965-2004) (2005) 0 0
Slide 16: World primary energy demand predicted to grow almost 50% by 2030
…with world primary energy demand predicted to grow by almost 50% by 2030 driven by developing economies Global demand, history and forecast 18 000 CAGR 2006–2030 1.5% Other 16 000 2006: 11 669 Mtoe 1.6% CAGR 2.8% India 14 000 1.8% CAGR 2.8% China 12 000 10 000 Other 0.9% OECD Asia Mtoe Mboe 1.9% Af
Slide 17: Coal is well placed given geographical spread of reserves and low cost
Coal is well placed given the geographical spread of reserves and its low cost… Europe Russia 150 North America 100 2 000 1 500 150 2 500 2 000 B to e M to e 250 4 000 100 M to e 1 000 1 500 B to e 3 500 50 200 500 1 000 3 000 50 500 150 2 500 2007 2004 2030 2 000 Reserves Consumption M to e 2007 20
Slide 18: Coal to remain #1 fuel for power generation
…therefore coal is to remain #1 fuel for power generation… Fuel inputs used in the production of electricity 2004 = 100 CAGR 2004–2030 200 190 Gas 2.5% 180 Coal 2.2% 170 160 Electricity (output) 2.0% 150 140 Renewables 1.9% 130 Nuclear 1.4% 120 110 Oil 0.4% 100 90 2004 2010 2015 2020 2025 2030 Therm
Slide 19: Energy efficiency and carbon capture key to address climate change
…with energy efficiency and carbon capture and sequestration key to address climate change CO2 concentration targeted at 500 ppm for stabilization Potential areas • Energy efficiency • CO2 capture and storage • Nuclear energy Gt • Renewables 60 • Forestry and agriculture (530 ppm) (750 ppm) Scenario
Slide 20: The energy world we play in – Mike Henry
Safety briefing Coal CSG in New South Wales The energy world we play in – Mike Henry Increasing energy demand Impact on seaborne thermal coal Short term issues BHP Billiton marketing How we play – strategy and growth Hunter Valley Energy Coal Page 19
Slide 21: Global seaborne trade set to increase by 40% to 2015
Global seaborne trade set to increase by 40% to 2015 2006 Mt Russia Europe Asia 66 184 China 54 Americas 40 301 Indonesia Colombia 57 143 66 114 S Africa Exports Imports Australia 2006 2015 2006 forecast 525Mt → 733Mt Source: BHP Billiton analysis Global trade 3.8% CAGR Page 20
Slide 22: Driven by China – coastal coal demand met from the north and imports
Driven by China - coal demand by coastal provinces is met from the north and imports… 1,200 1,000 North 486Mt 800 600 Mt 400 200 0 2006 Exports 58 Mt East 258Mt Imports 400 300 Mt 200 Coastal Coal Flow 100 0 Supply Demand 33 Mt South 187Mt Central 60Mt 400 400 300 300 200 200 Mt Mt Source: NDRC, BHP
Slide 23: India – western demand and low CV coal supply driving imports
…and India - coal demand in the west and supply of low CV coal on the east driving imports Key characteristics North 44Mt • Indian Thermal Coal industry is the third 150 largest globally 100 Mt • 409Mt consumed in 2006 50 0 • Large flows (only 36% mine mouth) 2006 Exports West 16Mt 150 Imports 100 M
Slide 24: Together, China and India provide significant upside
Together, China and India provide significant upside If we compare China and India to the rest of the world… …and compare electricity intensities… Population and electricity generation Electricity generation – intensity 9,000 1,600 14 Power Generation (TWh) 8,000 1,400 12 Population (Million) 7,000
Slide 25: The energy world we play in – Mike Henry
Safety briefing Coal CSG in New South Wales The energy world we play in – Mike Henry Increasing energy demand Impact on seaborne thermal coal Short term issues BHP Billiton marketing How we play – strategy and growth Hunter Valley Energy Coal Page 24
Slide 26: Current global issues: Chinese and Indian growth, CO2 and infrastructure
Current global issues are mainly related to Chinese and Indian growth, CO2 and infrastructure EU Russia • Emissions focus • Rail costs • Research funding • Rail infrastructure Japan • Kyoto USA commitments • Rail/Production • CO2 focus China • Increasing costs Colombia • Infrastructure • Cost of exp
Slide 27: The energy world we play in – Mike Henry
Safety briefing Coal CSG in New South Wales The energy world we play in – Mike Henry Increasing energy demand Impact on seaborne thermal coal Short term issues BHP Billiton marketing How we play – strategy and growth Hunter Valley Energy Coal Page 26
Slide 28: Marketing adds significant value
Marketing adds significant value… The objectives of the EC marketing group are to: • Sell our equity product; • De-risk pricing on sales of equity product; • Achieve optimal incremental margins over market at lowest cost; • Support the organisation’s strategic foresight and optionality Page 27
Slide 29: Using a variety of tools
…using a variety of tools… • Provision of an integrated offering of products and services that meet customers’ needs – equity coal, third party coal, emissions credits, logistics, risk management • Use of the paper markets to unwind fixed price sales • Active optimisation of the supply chain • Agenc
Slide 30: Supporting our competitive advantage
…supporting our competitive advantage Market BHP Billiton • Global seaborne market, many supply • Global position – equity, agency and basins, many markets traded • Changing regulatory environment – • Understanding of customer drivers – deregulation, environmental participation in coal, emissions, •
Slide 31: How we play – strategy and growth – Neil Scott
Safety briefing Coal CSG in New South Wales The energy world we play in How we play – strategy and growth – Neil Scott Energy Coal Strategy Growth and Optimisation Highlight on Operations Hunter Valley Energy Coal Page 30
Slide 32: Strategy focused on key drivers of competitive advantage
Our strategy is focused on the key drivers of competitive advantage in our industry Address long term We will actively manage our exposure to potential discontinuities and position discontinuities ourselves well for any threats or opportunities Grow and optimise the We will improve our export portfo
Slide 33: Performance improved in FY07 with better conversion of price to bottom line
Our performance has improved in FY07 with a better conversion of price to the bottom line 700 • Higher prices reflecting growth in energy EBIT (US$ M) 600 demand and supply side constraints. 500 400 • Sales volumes increased by 3% driven 300 by export growth at HVEC and Cerrejón 200 100 • BECSA rati
Slide 34: How we play – strategy and growth – Neil Scott
Safety briefing Coal CSG in New South Wales The energy world we play in How we play – strategy and growth – Neil Scott Energy Coal Strategy Growth and Optimisation Highlight on Operations Hunter Valley Energy Coal Page 33
Slide 35: Growth strategy positions the right assets in the right locations
Our growth strategy actively positions to have the right assets in the right locations… Delmas sold ZAC sold Atlantic Rietspruit closed Koornfontein sold 90 • Portfolio optimisation in South Africa 80 70 60 Production (Mtpa) – Disposal of Koornfontein and Optimum Hunter Valley 50 Cerrejon 40 New Mex
Slide 36: Deliberate focus on export growth
…with a deliberate focus on export growth… BHP Billiton Thermal Coal Equity Production – assuming all projects deliver 2007 2020 RSA Domestic RSA Exports Australia Domestic 41% Australia Export 62% export Americas Domestic export Americas Export Other Domestic Other Export • Australian exports incre
Slide 37: A deep inventory of projects and options
…and a deep inventory of projects and options Proposed capex as at Nov 2007 >$1B $<0.5B $0.5–1B Western Artic Khutala Brownfield South Africa Opt Exp MAU 2 Greenfield Australia Leandra Khutala 5 Americas South seam NCIG Expansion T-Project Weltevreden Cerrejón Opt Exp DMO Navajo MAC MAC South Pit MM
Slide 38: How we play – strategy and growth – Dave Murray
Safety briefing Coal CSG in New South Wales The energy world we play in How we play – strategy and growth – Dave Murray Energy Coal Strategy Growth and Optimisation Highlight on Operations Hunter Valley Energy Coal Page 37
Slide 39: Colombia Coal – Cerrejón Coal Company
Colombia Coal – Cerrejón Coal Company • Independently operated with 8,500 contractors and employees • Ownership of Puerto Bolivar 150km from mine with exclusive direct loading port • Record breaking performance in FY07: 188Mbcm of overburden and 28.2Mt production • FY07 Recordable Injury Frequency R
Slide 40: New Mexico Coal
New Mexico Coal San Juan Mine Navajo Mine Mining Method Underground - Longwall Surface - 3 Dragline Customer Power Plant Capacity (MW) 1,800 2,040 Customer San Juan Generating Station (PNM) Four Corners Power Plant (APS) Production (Mtpa) 6.6 8.1 Current Sales Contract Expiry July 2016 December 2017
Slide 41: New Mexico Coal – Navajo Mine Extension Project
New Mexico Coal - Navajo Mine Extension Project • Surface (dragline) mine and will serve as sole-source coal supply to the Desert Rock Energy Project, a proposed 1500 MW mine- mouth power station under development by Sithe Global. • Project Life: 50+ years. Coal will be supplied from Areas 4 South a
Slide 42: BECSA's mines in Mpumalanga
BECSA’s 5 mines in Mpumalanga… Middelburg Optimum Type O/C mine Type O/C mine Capacity 13Mtpa (84%) Capacity 11.6Mtpa Life 27 yrs Life 12 yrs PRETORIA Klipspruit Middelburg Project JOHANNESBURG Douglas Optimum Khutala Klipspruit Ric har ds Type O/C mine B ay Ra VEREENIGING il L Capacity 3.4Mtpa ine
Slide 43: A material business
… form a material business… 6,000 People 5 Operating assets 66.7 Mt ROM Production 51.6 Mt Saleable Production 21.4 Mt Export Steam Coal Sales 30.2 Mt Eskom Sales Note: FY07 data. Tonnages include Koornfontein Page 42
Slide 44: Simplified to core tier 1 assets
…simplified to core tier 1 assets 01 02 03 04 05 06 07 08 09 10 11 12 Glisa Sold to Eyesizwe Matla Sold to Eyesizwe Delmas Sold to Kuyasa Rietspruit Closed ZAC Sold to Riversdale Mining Koornfontein Sold to Mainstreet 431 Optimum Sales process underway Khutala Douglas To be closed end FY08 DMO Proje
Slide 45: Production profile will dip before DMO and Klipspruit start
Production profile will dip before DMO and Klipspruit start BECSA production KFT Export OPT Export DGL Export KLP Export Production KFT Domestic MMS / DMO Export OPT Domestic KLP Domestic MMS / DMO Domestic KHT Domestic FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 KFT – Koornfontein Mine MMS – Middelburg Min
Slide 46: Douglas Middelburg Optimisation (DMO) project
Douglas Middelburg Optimisation (DMO) project Key Statistics • Forecast production – Exports 10-12 Mtpa – Eskom 10 Mtpa • Employees – Direct 1650 (permanent) – Construction 2900 (peak) • Brownfield expansion – Large opencast • 84% BHP Billiton :16% Xstrata • Capital estimate: US$460M (84% basis) • K
Slide 47: Klipspruit project
Klipspruit project Key Statistics • Forecast production – Exports 4.5 Mtpa – Eskom 2.9 Mtpa • Strip ratio of 2.3 bcm / tonnes (lowest in group) • Employees – Direct 330 (permanent) – Construction 2400 (peak) • Brownfield project – Contractor mining at present • 100% BHP Billiton opencast operation •
Slide 48: Significant additional resources under prospecting licenses
And there are significant additional resources held under prospecting licenses… NORTHERN PROVINCE Nelspruit NORTH Pretoria JohannesburgMPUMALANGA 419 WEST GAUTENG 893 SOUTH FREE KWA-ZULU NATAL STATE AFRICA NORTHERN CAPE Durban EASTERN CAPE 102 242 WESTERN CAPE East London Port Elizabeth Mossel Bay 8
Slide 49: A deep inventory of projects and options
…with a deep inventory of projects and options Proposed capex as at Nov 2007 >$1B $<0.5B $0.5–1B Khutala Brownfield Opt Exp Greenfield Leandra South Khutala 5 seam T-Project Weltevreden DMO MMS Remhoogte Middlings Plant Naudesbank Block IV Klipspruit Theunissen Leandra Davel North Waterberg Executio
Slide 50: Hunter Valley Energy Coal – Eduard Haegel
Coal CSG in New South Wales The energy world we play in How we play – strategy and growth Hunter Valley Energy Coal – Eduard Haegel Background Performance Growth Page 49
Slide 51: Hunter Valley Energy Coal
Hunter Valley Energy Coal 2nd November 2007 Eduard Haegel Chief Operating Officer
Slide 52: New mine developments move further up the valley
New mine developments move further up the valley © Barlow Jonker. Page 51 Not to be used in any third party documentation
Slide 53: BHP Billiton through HVEC secures 100% of Mount Arthur
BHP Billiton through HVEC secures 100% of Mount Arthur … • Bayswater commenced operations in 1968 • Purchased by Billiton in 1996 • Mt Arthur North lease secured in 1998 via a 5 year x 3.0 Mtpa domestic contract • Mining Lease granted in June 2001 • First coal mined in April 2002 • First fiscal year
Slide 54: Winning a significant long life resource
… and wins a significant long life resource … Mt Arthur Coal 826 (Mt) 602 Caroona Mt Arthur Underground 1,334 (Mt) NCIG Resource Total Measured 64 Page 53
Slide 55: Constant low strip ratio over the mine's life
… with a constant low strip ratio over the mine’s life Page 54
Slide 56: Hunter Valley Energy Coal – Eduard Haegel
Coal CSG in New South Wales The energy world we play in How we play – strategy and growth Hunter Valley Energy Coal – Eduard Haegel Background Performance Growth Page 55
Slide 57: Exceptional HSEC performance
Exceptional HSEC performance … Year ended June 2007 2006 % change TRIFR 8.4 11.7 -28.2 • CEO’s Sustainability Excellence Award • BHP Billiton Community Award for Hunter Life Education • Effective and valued community engagement programs • Industry leader in noise management – Attenuation – noise bun
Slide 58: Long term safety trend continuing in FY08
… with the long term trend continuing in FY08 Historical safety performance 30 TRIFR 26.1 25 19.8 Frequency rate 20 14.7 15 12.7 11.3 10 8.4 5.5 5 0 FY02 FY03 FY04 FY05 FY06 FY07 Sept YTD TRIFR Page 57
Slide 59: Production records
Production records … Year ended June 2007 2006 % change Total Production (Mt) 10.898 9.147 +19.1 • Record annual production • Two record production quarters • Record export sales • The June flood event replenished local water supplies with manageable operational impacts Export Railing Page 58
Slide 60: Consistent performance continues in 2008
… continue in 2008 with consistent performance … First quarter production Q108 Q107 % change Production (Mt) 2.918 2.766 +5.5 • Record total production and export production for 1st quarter FY08 • Record monthly production in Aug, Sep, Oct 3 Production (Mt) 2 1 0 Q1 Q2 Q3 Q4 Q1 FY2007 FY2008 Domesti
Slide 61: The '100k bcm per shift Project'
… underpinned by the ‘100k bcm per shift Project’ … Mining operational performance • Project Team of seven production staff and wages employees and three Six Sigma blacks belts • Benchmarked against Caterpillar Equipment Investment Analysis • New loading methodology rolled out • Increased focus on r
Slide 62: The new dig methodology
… and the new dig methodology … Page 61
Slide 63: 2Mt away from completing the domestic contract
… and 2Mt away from completing the domestic contract Domestic and export production history 12 10 Production (Mt) 8 6 4 2 0 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 Domestic Sales Export Sales Third Module Installed at CPP Queensland Rail Contract Page 62
Slide 64: Financials improve
Financials improve … Year ended June 2007 2006 % Change EBIT (USD M) 82.5 22.0 +375 • Implemented “Fit for Growth” cost reduction program • 9.5% reduction in mine gate cost per product tonne • 280% increase in demurrage cost • 2% increase in FOB cost per product tonne Page 63
Slide 65: Costs back under control
… with costs back under control … Minegate costs 200 FY07 minegate cost breakdown (AUD Basis) 161 Indexed Costs FY03=100 145 Employees and contractors 35% 150 126 Maintenance 23% 100 103 Energy 17% 100 Royalty 8% 50 Explosives 6% Consumables 5% 0 Other 5% FY03 FY04 FY05 FY06 FY07 Total 100% Page 64
Slide 66: 'Fit for Growth' cost reduction program
… using ‘Fit for Growth’ cost reduction program Year ended June Actual Target % Change Savings (USD M) 25.9 19.7 +31 • In house nine week cost reduction program • Maintenance labour costs reduced by improving manning efficiency ratios • Mining labour costs reduced through using casual contract labou
Slide 67: Leading to a First Tier mine
…leading to a First Tier mine 2015 Pacific CIF cost curve 80 Pacific CIF mixed cost curve, 2015. US$/t CIF JPN Cost, Real 2006 60 Mt Arthur Coal 40 Canada Vietnam Bangladesh Russia East 20 South Africa China Indonesia Australia 0 Source : Barlow Jonker Data, not to be used in any third party present
Slide 68: Hunter Valley Energy Coal – Eduard Haegel
Coal CSG in New South Wales The energy world we play in How we play – strategy and growth Hunter Valley Energy Coal – Eduard Haegel Background Performance Growth Page 67
Slide 69: Pacific strategy can leverage first class growth options
Pacific strategy can leverage first class growth options Proposed capex as at Nov 2007 >$1Bn $<0.5Bn $0.5–1Bn Brownfield MAU 2 Greenfield MAC 25 NCIG Expansions MAC South Pit MAU 1 Caroona MAU NCIG Adit Port Feasibility Execution Pre-Feasibility Future options Page 68 Source: BHP Billiton
Slide 70: Expanded opencut operations – MAC 25
… with expanded opencut operations – MAC 25 … Mined Out Opencut Area Current Disturbed Area of Opencut Mt Arthur Coal Open Cut Reserve Area Mt Arthur Underground Reserve Area Page 69
Slide 71: Building underground operations
… or by building underground operations • Low cost project leveraging off MAC infrastructure, management team and final opencut highwalls (allows Punch LW mining) • Experienced project team assembled with a track record of success • Staged expansion (Exploration Adit, MAU 1 and MAU 2) Milestone Date
Slide 72: People are being attracted by the HVEC growth story
People are being attracted by the HVEC growth story 1,000 • Attractive area to live 900 • 18 years without a local 800 industrial stoppage 700 • Turnover 6.7% … low in a tight labour 600 market 500 400 • Unplanned Absenteeism 2.4% 300 • Positive workforce culture 200 100 • Average Age 41 0 FY02 FY03
Slide 73: Water resources are being secured ahead of growth
Water resources are being secured ahead of growth • Significant water license purchases or recovered from leases • Investment in new pumping and pipeline infrastructure • Reduced consumption using wetting agents • Planned increases in site storage capacity 5,000 4,000 Licence (Ml) 3,000 General secu
Slide 74: Rail capacity is available for growth plans
Rail capacity is available for growth plans • HVEC is the foundation partner for Queensland Rail (QR) in NSW • QR performance has been exceptional • HVEC has contracted capacity to meet the growth profile • QR has further installed capacity and a willingness to grow • ARTC installing capacity to mat
Slide 75: Coal washplant is readily expandable
Coal washplant is readily expandable • Built with 2 x 700tph modules expandable to 900tph • Third module installed in FY07 at 900tph • Scope for a further two additional modules to be added • Adequate space for additional coal handling facilities • Coal washplant can be expanded to manage all expans
Slide 76: Port capacity has not kept pace with mining developments
Port capacity has not kept pace with mining developments.. Port capacity growth profile 90 80 Thermal Coal Metallurgical Coal 70 60 50 Mt 40 30 20 10 0 2000 2001 2002 2003 2004 2005 2006 2007 Calendar Year Annualised Page 75
Slide 77: Vessel queues and demurrage costs
… creating this… 80 6.00 70 5.00 60 4.00 50 Actual Ships 3.00 US$/tonne 40 2.00 30 1.00 20 10 0.00 0 -1.00 Jul Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Aug 02 02 02 03 03 03 03 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 Average vessel queue Monthly demurrage
Slide 78: Newcastle Third Port (NCIG) creates a pathway to the sea
Newcastle Third Port (NCIG) creates a pathway to the sea … Milestone Date Status NCIG formed Aug-04 Tender for Newcastle Third Port Aug-05 Awarded NSW Government Development Consent Apr-07 Received Construction Start (dredging works) Oct-07 Complete NCIG Shareholding Project Sanction Dec-07 HVEC (10
Slide 79: Expandability to 66Mt over three phases
… with expandability to 66Mt over three phases 70 60 Timing for stage 2 and 3 are indicative only Port throughput (Mt) 50 40 30 20 10 NCIG Stage 1 0 Page 78
Slide 80: Caroona – a significant greenfield opportunity
… and then there is Caroona – a significant greenfield opportunity Project Details • Caroona identified as exploration project • 5 year exploration licence • Potentially the most significant undeveloped coal project in NSW • Exploration area approx 350km2 • 50+ exploration bores completed to date wi
Slide 81: The outlook for HVEC
The outlook for HVEC Market outlook is strong Production is growing Costs are under control Business Excellence delivering results Outstanding growth options Risks lie with PWCS Page 80