Bhp Group Ltd · ASX:BHP
Bhp — BHP Billiton — Corporate Update (July 2008)
44 slides from Bhp's corporate update, July 2008
Slide 1: Welcome to Mozal
WELCOME TO MOZAL Together, we make a difference
Slide 2: Mozambique regional map
Mozambique Zimbabwe Namibia Botswana MAPUTO Richards Bay DURBAN South Africa Map: not to scale
Slide 3: Smelter Location
MACHAVA LEGEND — = ' RAILWAY = ROADS INHABITED AREA
Slide 4: Overview
Overview • 506 000 tpa primary aluminium smelter constructed in two phases • Aluminium Pechiney AP30S technology • Approx. US $2bn total (historical) funding • $1.1bn non-recourse project funding, internationally syndicated • Shareholding: BHP Billiton 47% Mitsubishi 25% IDC of SA 24% Government of
Slide 5: Loan Funding
Loan Funding Lenders Grand Total US$ mil International Finance Corporation (IFC) 113.9 Commonwealth Development Corporation (CDC) 52.1 PROPARCO 29.6 Deutche Investitions und Entwickluingsgesellschaft (DEG) 30.7 Development Bank of Southern Africa (DBSA) 82.5 EIB 32.9 COFACE lenders (agent BNP Pariba
Slide 6: The Process
The Process Alumina + Carbon Electricity Aluminium Metal
Slide 7: Raw materials arrive at the Matola Harbour
RAW MATERIALS ARRIVE AT THE MATOLA HARBOUR
Slide 8: Transported from harbour storage to site storage
TRANSPORTED FROM HARBOUR STORAGE TO SITE STORAGE
Slide 9: Carbon materials are sorted
CARBON MATERIALS ARE SORTED RECYCLED ANODES
Slide 10: Green anodes are prepared
GREEN ANODES ARE PREPARED haul HOPPER POURS IN PASTE + Ei.
Slide 11: Carbon bake furnace
CARBON BAKE FURNACE
Slide 12: Carbon rodding shop
CARBON RODDING SHOP => m> BUTT CRUSHING PLANT ANODE PALLET TRANSPORT VEHICLE (APTV) MOLTEN RODDED CAST IRON IN ANODE CRUCIBLE ASSEMBLIES ON PALLET HEXAPOD ALIGNMENT TURNTABLE
Slide 13: Reduction process
REDUCTION PROCESS POT TENDING ASSEMBLY (PTA) FLUORINATED ALUMINA FROM GAS TREATMENT CENTRE (GTC) ¥ MOLTEN ALUMINIUM BEING SYPHONED INTO LADLE = — veeeeesserenee + DC CURRENT SESS RR POTLINE EMISSIONS TO GAS TREATMENT CENTRE (GTC)
Slide 14: Casthouse
LU op) 2D e) aa k- 0) << O
Slide 15: From furnace to casting line
FROM FURNACE TO CASTING LINE } HOLDING FURNACE TILTS CAST LINE INGOT DROP OU ZONE
Slide 16: Ingot production and preparation for dispatch
INGOT PRODUCTION AND PREPARATION FOR DISPATCH
Slide 17: Transported by sea to Europe
TRANSPORTED BY SEA TO EUROPE _ LOADING. GANTRY
Slide 18: Milestones
Milestones 14 May 1998 Phase 1 go-ahead announced in London 18 June 2000 First metal cast 22 December 2000 Last pot started potline 1 21 June 2001 Phase 2 go-ahead 7 April 2003 First metal potline 2 20 August 2003 Last pot started potline 2 Phase 1: 31 months from go ahead to full commissioning, >US
Slide 19: Achievements
Achievements EXPANSION PHASE 2 • Zero reportable environmental incidents • Construction workforce peaked at 5033 - 70% Mozambican • US$94m expended in the Mozambican economy • Excellent IR climate zero manhours lost in 14 million worked • Benchmark construction safety record - LTIFR 1.03 OPERATIONS
Slide 20: Why Mozambique?
Why Mozambique? COMPETITIVE POWER SUPPLY EFFICIENT HARBOUR A World Class Primary RAW MATERIALS SUPPLY Aluminium Smelter INVESTMENT INCENTIVES + PEOPLE The Difference + INTEGRATION/LINKAGES
Slide 21: Electricity Supply
Electricity Supply TANZANIA Mozal consumes 900mW MALAWI Four times Mozambique’s total UE ZAMBIA PEMBE consumption IQ MB NACALA Matches available output of ZA RA CAHO MEPANDA MO A BASS UNCUA A TETE Cahora Bassa RIB KA ZA MB EZ QUELIMANE I ZIMBABWE BEIRA SAVE BOTSWANA LIM PO PANDE GAS PO INHAMBANE IND
Slide 22: Why Mozambique?
Why Mozambique? COMPETITIVE POWER SUPPLY EFFICIENT HARBOUR A World Class Primary RAW MATERIALS SUPPLY Aluminium Smelter INVESTMENT INCENTIVES + PEOPLE The Difference + INTEGRATION/LINKAGES
Slide 23: The Harbour
The Harbour Matola Aluminium Terminal opened in March 2000 • 1 200 000 tons of raw materials • 506 000 tons of export Linked to the Maputo development corridor (Johannesburg-Maputo) Privatisation complete (April 2003) Rail concession signed
Slide 24: Why Mozambique?
Why Mozambique? COMPETITIVE POWER SUPPLY EFFICIENT HARBOUR A World Class Primary RAW MATERIALS SUPPLY Aluminium Smelter INVESTMENT INCENTIVES + PEOPLE The Difference + INTEGRATION/LINKAGES
Slide 25: Raw materials supply
Raw materials supply Australia USA S.A. / Japan Moz/S.A. HYDRO BAUXITE CRUDE OIL COAL (TAR) Cahora Bassa 2 000 000 t 120 000t ESKOM ALUMINA PET. COKE PITCH ELECTRICITY 1000 000 t 180 000 t 45 000 t 900 MW ALUMINIUM 506 000 tpa
Slide 26: Why Mozambique?
Why Mozambique? COMPETITIVE POWER SUPPLY EFFICIENT HARBOUR A World Class Primary RAW MATERIALS SUPPLY Aluminium Smelter INVESTMENT INCENTIVES + PEOPLE The Difference + INTEGRATION/LINKAGES
Slide 27: Product quality
Product quality 100 80 P2025 60 P1020 % of production P0610 40 P0406 20 0 FY2001 FY2002 FY 2003 FY 2004 YTD
Slide 28: Health, Safety and the Environment
Health, Safety and the Environment 6 Health 5.36 CIFR incl. Contractors Plan • Comprehensive Occupational Health program 4 3.61 3.56 • HIV/AIDS awareness creation inside and 3.20 3.17 3.26 3.22 outside the company • Mozambiques first Managed Health care 2 Plan 0.90 0 Safety '00 '01 '02 '03 J A S O N
Slide 29: Cost position
Cost position Cash cost of production at 3 month LME of $1400 (2002 terms) 1600 ($/tonne) Mozal position up to 31/12/2012 1400 1200 1000 800 Mozal position after 01/01/2013 600 Mozal position up to 31/12/2006 - adjusted to include M1 and M2 400 0 2 4 6 8 10 12 14 16 18 20 22 24 Capacity (million tpy
Slide 30: Cost components
Cost components 27 % of Mozal costs are directly linked to the LME Fixed Cost Components 80% Fixed Cost 70% Plant power & fuel 9% 60% 24% Pitch 30% Consumables & 50% relining 2% 19% 40% 5% Maintenance 30% Coke Salaries 20% 36% 17% 10% Power & 25% Admin Alumina 0%
Slide 31: Real Terms Cash Cost (Base 2001)
Real Terms Cash Cost (Base 2001) Including Sustaining Capex (US$/ton) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2001 2002 2003 Conversion cost Alumina & Power Total cost target Conv cost target
Slide 32: Cash break even
Cash break even LME price to break even on a US$554/t cash basis until 31 December 2006 US$634/t between 2007 and 2012 US$623/t after 31 December 2012 LME price to break even on a cash basis US$1040/t plus loan repayments and interest 2004/05 (Includes M2 loan repayments)
Slide 33: Why Mozambique?
Why Mozambique? COMPETITIVE POWER SUPPLY EFFICIENT HARBOUR A World Class Primary RAW MATERIALS SUPPLY Aluminium Smelter INVESTMENT INCENTIVES + PEOPLE The Difference + INTEGRATION/LINKAGES
Slide 34: Our people
Our people • Phase 2 project labour peaked at 5033 • Total direct employees: 1089 • Mozambican nationals: 90.5% • Union: SINTIME • Unionised employees: 23% • Indirect job creation 3500 • Aged: 20 - 45 years • Minimum qualification: Class 10/Basic technician
Slide 35: Training and development
Training and development • 18 650 man days training (Based on 2002 and 2003). This averages out to 10 days training per employee per year. The American benchmark is 4 days per employee • 600 modules were developed • 7.7 million USD training cost • 230 maintainers trained Ongoing initiatives • Talent
Slide 36: Pursuing excellence
KC Pursuing excellence él bhpbilliton BHP Billiton Way @E) Operating Excellence Six Sigma BHP Billiton Aluminium Operating System
Slide 37: Success factors
Success factors COMPETITIVE POWER SUPPLY EFFICIENT HARBOUR A World Class Primary RAW MATERIALS SUPPLY Aluminium Smelter INVESTMENT INCENTIVES + PEOPLE The Difference + INTEGRATION/LINKAGES
Slide 38: Strategic Linkages
Strategic Linkages The project fits within the economic transition in Mozambique which started in the early 90’s MOZAMBIQUE MOZAL OPTIMISE MARKET FOR CAHORA BASSA ENERGY Economic Energy INITIATE A MOZAL MEGA PROJECT PROJECT Job KICKSTART LINKAGES & Creation MOZAMBIQUE INDUSTRIAL PARK INDUSTRY COMMUN
Slide 39: Economic Impact
Economic Impact • Mozal in 2002 = 53% of exports and 28% of imports • 2002 real GDP growth 8% (Mozal 2.1%) • Net positive impact on balance of payments around $100m at steady state • Mozambique export earnings US $220m to US $1bn • Powerful Demonstration Effect • New economic linkages e.g alumina su
Slide 40: Social Contribution
Social Contribution • Mozal Community Development Trust established in 2001 • Budget of $2m per annum • Focus in immediate vicinity of the smelter • Projects related to community infrastructure, health, small enterprise development, education, sports and culture • Projects screened for sustainabilit
Slide 41: Beloluane Village School in 1998
Beloluane Village School in 1998 • No roof • No electricity • No water • No classes when raining • 130 pupils • Grades 1-5 • Up to 20% daily absenteeism (malaria)
Slide 42: Beloluane Village School in 1998
Beloluane Village School in 1998 • 700 pupils • Grades 6&7 • Water/electricity • Sports field • Program extended to 4 more schools • 25 classrooms • 4500 pupils • Secondary school being built • Malaria incidence dramatically reduced Our vision Recruitment of Mozal staff directly from the local commu
Slide 43: Agriculture Development
Agriculture Development • Government relocation program • 900 subsistence “Machamba” farmers • 3 yr Agricultural upliftment project • Crop yields dramatically increased • Successful diversification
Slide 44: Conclusion
Conclusion • A successful expansion, completed with an excellent safety record, in record time, under budget, in Mozambique • A world class operation at the bottom of the cost curve • An integrated approach … led to improved social environmental and economic benefits Carry on making a difference tog