Slide 1: Vedanta Limited Investor Presentation
Vedanta Limited Investor Presentation September 2017 Elements for a Sustainable Future VEDANTA LIMITED – ZINC–LEAD–SILVER | OIL & GAS | ALUMINIUM | COPPER | IRON ORE | POWER VEDANTA LIMITED, Investor Presentation, Sept 2017
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: A diversified resources company with low cash cost positions
Vedanta: A diversified resources company, with low cash cost positions, market leading growth and strong balance sheet Commodity diversification1 Attractive cost position I II III IV Size of circle Zinc denotes India EBITDA Zinc Intl. contribution Peers O&G Copper Aluminium India % Revenue (CY 2016)
Slide 4: A world-class natural resource powerhouse anchored in India
A world-class natural resource powerhouse anchored in India 6th largest diversified resources company in the world1 Only global player with significant operations, expertise and majority sales in the Indian market – the fastest growing G-20 economy2 Strong Balance sheet: Vedanta Ltd. Net Debt/
Slide 5: Q1 FY2018 Results Highlights
Q1 FY2018 Results Highlights Operations: Group EBITDA Mix Higher zinc-lead and silver volumes at Zinc India Q1 FY2018 Q1 FY2017 Gamsberg zinc project on track for mid CY18 Rs. 4,965 crore Rs. 3,539 crore production 4% 1% 2% Aluminium exit production run-rate of 1.4mtpa 10% (stabilized) 11% 12%
Slide 6: Capital Allocation: Focus on Shareholder Returns
Capital Allocation: Focus on Shareholder Returns World class assets and operational excellence to deliver strong and sustainable cash flows Production growth and asset optimization Strong Shareholder Returns Maintain Strong Balance Sheet Grow Existing Businesses • Announced dividend policy at • Cont
Slide 7: Well-invested assets driving cash flow growth
Well-invested assets driving cash flow growth Significant capex already spent, ready to reap benefits from incremental production with low remaining capex Capex Spent (US$bn) Total Production (copper equivalent kt) Zinc-Lead Silver Copper Aluminium 3,000 Power Iron Ore Oil & Gas 2.2 2.0 Copper Equiv
Slide 8: Delivering on our Strategic Priorities
Delivering on our Strategic Priorities Strategic Priorities Focus Areas for FY2018 Continued production ramp up Production Commence production at Gamsberg by mid CY2018 growth Continue to improve business efficiencies Efficiently refinance upcoming maturities, lower interest costs Deleveragi
Slide 9: Diversified, low cost asset base: World-scale capacities
Diversified, low cost asset base: World-scale capacities • India’s largest private sector oil producer Oil & Gas • Operates c. 30% of India’s total oil production • One of the lowest cost producer in the world with cost at sub $6/boe • India’s only miner of Zinc-Lead, and the world’s second largest
Slide 10: Global Zinc Market Overview
Global Zinc Market Overview Refined Market Balance Zinc Demand By Industry Consumer Industrial products machinery kt 6% 7% 15,000 14916 Infrastructure Construction 14538 16% 50% 14,500 14256 13912 Transport 14,000 13779 21% Source: Wood Mackenzie 13,500 India Steel Production and Zinc Demand kt Mn M
Slide 11: Strong Fundamentals
Strong Fundamentals Declining stocks at LME warehouses Global Zinc concentrate deficit supporting zinc prices kt mn MT $ 800 Surplus 1.8 3,500 LME SHFE Zinc LME $/t (RHS) Dugald River 600 Glencore McArthur (210ktpa) 1.6 River closure Gamsberg 3,000 400 (130ktpa) & Mount (250ktpa) to 1.4 Isa Closure
Slide 12: Zinc India
Zinc India Q1 FY2018 Results MIC at 233kt; refined zinc-lead production at 228kt Refined silver production at 115 tonnes CoP at $973/t; higher q-o-q mainly due to lower production as per mine plan, input commodity costs and lower acid realization Projects – key highlights Capacity expansion
Slide 13: Way Forward - Zinc India
Way Forward - Zinc India Shaft and decline integration 1.5 mtpa Multi-level mining capacity Digital transformation under New prospects & tenements planning R&R addition 25+ years of mining R&R with potential of 1.2 mtpa 1.2 mtpa Transition to underground mining progressing capacity smoothly by FY 20
Slide 14: Zinc International
Zinc International Significant progress at 250kt Gamsberg project Q1 FY2018 Results On target for first production by mid CY2018 and on budget for a Production at 32kt: Skorpion at 14kt, BMM at 18kt capex target of $400mn CoP at $1690/t, higher q-o-q, driven by lower Critical milestone of co
Slide 15: Zinc International Outlook
Zinc International Outlook High value Resource Base 306Mt (22Mt Metal) to enable long term sustained Production and Growth Reserve & Resource • R&R on acquisition 286Mt. Addition of 44Mt (>15%) including depletion >300Mt Ore • Converted 63Mt Resource to Reserve (>20%) • FY2018: Production of c.160 K
Slide 16: Cairn Oil & Gas
Cairn Oil & Gas Q1 FY 2018 Results MPT: Facility modifications Gross average production at 187,203 boepd Rajasthan production at 159,351 boepd Offshore production at 27,852 boepd RJ Mangala EOR production stable at 56 kboepd in Q1 Commenced production from two more satellite fields viz Kaa
Slide 17: Cairn Oil & Gas Key Projects
Cairn Oil & Gas Key Projects MPT: Facility modifications RDG Gas project Phase-1: 40-45 mmscfd by Q2 FY2018 Phase-2: Gas production of 100mmscfd and condensate production of 5kboed by H1 CY2019; Drilling rig contract awarded, tendering for new gas processing terminal is underway Key Oil projec
Slide 18: Appendix
vedanta transforming elements Appendix
Slide 19: Aluminium
Aluminium Q1 FY2018 Results Aluminium Costs and Margins (in $/t, for Q1 FY2018) Aluminium production of 352kt and Alumina 303kt Aluminum CoP at $1,727/t, higher q-o-q due to higher Q4 ‘17 1710 45 86 1,982 (645) (548) (298) (44) $447/t (150) (299) (2) 98 63 2,070 (751) input and power costs and I
Slide 20: Power
Power Q1 FY 2018 Results Power Generation Capacity – c. 9GW TSPL IPP: 3.6GW Plant was out of production for c. 2months, due to fire at coal conveyor in April 2017 CPP:5.1GW All 3 units restarted in end Jun 2017, currently 41% running at availability of 90%. Targeting availability of 70%+ for
Slide 21: Iron Ore and Copper India
Iron Ore and Copper India Q1 FY 2018 Results Iron Ore Sales of 2.32mt and production of 3.24mt Lower sales at Goa due to low pricing & widening of discounts from benchmark grade Beneficiation & blending in process to improve realisations and margins Karnataka achieved c.50% of allocated annu
Slide 22: Optimising Capex to drive Cash Flow Generation
Optimising Capex to drive Cash Flow Generation Prioritised capital to high-return, low-risk projects to maximise cash flows Growth Capex Profile and Free Cash Flow pre capex - $bn 2.8 Oil & Gas Capex spent for FY 17 at $0.7bn against original Zinc guidance of $1bn 2.4 Al & Power Copper FY 2018
Slide 23: Strong Credit Profile and Balance Sheet
Strong Credit Profile and Balance Sheet Maturity Profile of Term Debt ($6.1bn) (as of 30th June 2017) Subsidiaries Standalone 1.3 1.2 1.0 0.4 1.0 0.4 0.9 0.3 0.7 0.3 0.4 0.9 0.4 0.8 0.7 0.6 0.4 0.4 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 & Later Term debt of $6.1bn ($3.9bn at Standalone and $2.2bn
Slide 24: Guidance
Guidance Segment FY18e Comments Zinc-Lead Integrated: 950kt Zinc India Silver volume: +500 tonnes CoP ($/t): slightly higher than FY2017 Zinc-Lead volume: c.160kt Zinc International Gamsberg expected CoP: $1000-1,150/t CoP: c.$1,500/t RJ Gross Volume: 165kboepd Oil & Gas Ravva Gross volume: 16kboepd
Slide 25: Entity Wise Cash and Debt
Entity Wise Cash and Debt (in Rs. crore) 30 June 2017 31 March 2017 30 June 2016 Company Debt Cash & LI Net Debt Debt Cash & LI Net Debt Debt Cash & LI Net Debt Vedanta Limited 42,711 16,698 26,013 43,233 2,316 40,917 35,729 1,216 34,513 Standalone Cairn India1 NA NA NA - 27,646 (27,646) - 23,565 (2
Slide 26: Group Structure
Group Structure Vedanta Resources Plc Divisions of Vedanta Limited 79.4% 50.1% Sesa Iron Ore Sterlite Copper (Tuticorin) Konkola Copper Vedanta Ltd Power (600 MW Jharsuguda) Mines (KCM) Aluminium (Odisha aluminium and power assets) Cairn Oil & Gas* Subsidiaries of Vedanta Ltd 64.9% 51% 100