Vedanta Limited · NSE:VEDL
Vedanta — Vedanta Resources — Investor Day (November 2017)
37 slides from Vedanta's investor day presentation, Nov 10, 2017
Slide 1: Vedanta Resources Plc FY2018 Interim Results and Capital Markets Day
Vedanta Resources Plc FY2018 Interim Results and Capital Markets Day Delivering Growth and Shareholder Returns 10 November 2017 VEDANTA RESOURCES PLC – ZINC–LEAD–SILVER | OIL & GAS | ALUMINIUM | COPPER | IRON ORE | POWER VEDANTA RESOURCES PLC – FY2018 INTERIM RESULTS AND CAPITAL MARKETS DAY
Slide 2: Cautionary Statement and Disclaimer
Cautionary Statement and Disclaimer The views expressed here may contain information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness, reasonableness or reliability of this information. Any forwa
Slide 3: Contents & Agenda
Contents & Agenda Time Section Presenter Page 1050hrs Oil & Gas Sudhir Mathur, CEO - Oil & Gas 4 1105hrs Oil & Gas Q&A 15 1120hrs Zinc International Deshnee Naidoo, CEO – Zinc International 16 1135hrs Zinc India Sunil Duggal, CEO - Zinc India 25 1150hrs Zinc Q&A 34 1230hrs Lunch VEDANTA RESOURCES PL
Slide 4: Oil & Gas
Vedanta Resources Plc FY2018 Interim Results and Capital Markets Day Oil & Gas Sudhir Mathur – CEO, Oil & Gas 10 November 2017 VEDANTA RESOURCES PLC – ZINC–LEAD–SILVER | OIL & GAS | ALUMINIUM | COPPER | IRON ORE | POWER VEDANTA RESOURCES PLC – FY2018 INTERIM RESULTS AND CAPITAL MARKETS DAY
Slide 5: Vision: Oil & Gas Business
Vision: Oil & Gas Business Contribute to 50% of India’s domestic crude oil production with volumes of 500kboepd and reserves of over 3bn barrels of oil equivalent Operate diversified and sustainable portfolio Deliver long-term value to Shareholders, Governments and Local Communities Key Levers
Slide 6: Significant Policy Changes to Unlock India's Hydrocarbon Potential
Significant Policy Changes to Unlock India’s Hydrocarbon Potential Untapped opportunity Positive policy measures Over 80bn boe of ‘in place resources’ Hydrocarbon Exploration and Licensing Policy (HELP) ~50% of the sedimentary basins to be appraised Open Acreage Licensing Policy (OALP) Onl
Slide 7: Cairn Oil & Gas: Extremely Well Positioned for the India Opportunity
Cairn Oil & Gas: Extremely Well Positioned for the India Opportunity Assets: Diverse and Prolific geological basins World Class Resource Base (as on Mar 17) 7 blocks with net acreage of ~35,000km2 Hydrocarbon Initially in Place of 7.5bn boe 3 core producing blocks - 1 onshore, 2 offshore 2P1
Slide 8: Actively Pursuing Opportunities Under the New Open Acreage Licensing Policy
Actively Pursuing Opportunities Under the New Open Acreage Licensing Policy India: Geology and Potential Only 7 of 26 basins under commercial production Discovered Reserves: 28 billion boe of Ultimate Reserves Over 80 billion boe of ‘in place resources’ Potential in remaining 19 basins yet t
Slide 9: Rejuvenated Exploration to add Over 700mmboe of Contingent Resources
Rejuvenated Exploration to add Over 700mmboe of Contingent Resources Barmer Basin: Singular access to the prolific Basin spread over 3,000 sq. km. with established discoveries 1 Akli Rajasthan (Barmer Basin) Basin provides access to multiple play types Thumbli: with 2 Tukaram, Raageshwari Oil, Gud
Slide 10: Rejuvenated Exploration to add Over 700mmboe of Contingent Resources (cont'd)
Rejuvenated Exploration to add Over 700mmboe of Contingent Resources (cont’d) Offshore Basin: Our efforts are centred around the prolific Krishna Godavari basin KG-OSN-2009/3 (KG Offshore) Ravva Aim to establish 300mmboe of Contingent Aim to establish 100 mmboe of Contingent Resources Resources
Slide 11: $1bn Capex Initiated to Deliver 300 kboepd at $5 per boe
$1bn Capex Initiated to Deliver 300 kboepd at $5 per boe Enhanced Execution Strategy Gross production Net capex (kboepd) ($mn) Fundamental shift to ‘Integrated Project Development’ with in-built risk and reward mechanism to drive 275-300 300 300 incremental value from project schedule and recoveri
Slide 12: Cairn Oil & Gas: One of Lowest Operating Costs Globally
Cairn Oil & Gas: One of Lowest Operating Costs Globally Consistent reduction in waterflood operating cost Rajasthan costs ($/boe) since FY15 driven by scope optimization, process Waterflood Polymer & Power 6.5 6.2 efficiencies and contract optimization 5.8 1.3 3.9 1.9 RJ waterflood operating cos
Slide 13: Technology and Digitalization Enabling Business
Technology and Digitalization Enabling Business Implementation of EOR techniques Multi stage fracking to improve well World’s largest polymer flood in productivity and improve EUR Mangala Enhanced well productivity through frac Successfully tested ASP flood process design in the Mangala fi
Slide 14: Summary
Summary Exploration program recommenced to add to the prospective and contingent resources with a focus on Onshore Barmer Basin, Offshore Basins and OALP rounds Development Projects execution in progress with a gross investment of $1bn for incremental volumes of ~ 100 kboepd in the next 2-3 year
Slide 15: Q & A Oil & Gas
Vedanta Resources Plc FY2018 Interim Results and Capital Markets Day Q&A Oil & Gas 10 November 2017 VEDANTA RESOURCES PLC – ZINC–LEAD–SILVER | OIL & GAS | ALUMINIUM | COPPER | IRON ORE | POWER VEDANTA RESOURCES PLC – FY2018 INTERIM RESULTS AND CAPITAL MARKETS DAY
Slide 16: Zinc International
Vedanta Resources Plc FY2018 Interim Results and Capital Markets Day Zinc International Deshnee Naidoo – CEO, Zinc International 10 November 2017 VEDANTA – ZINC–LEAD–SILVER | OIL & GAS | ALUMINIUM | COPPER | IRON ORE | POWER VEDANTA RESOURCES PLC – FY2018 INTERIM RESULTS AND CAPITAL MARKETS DAY
Slide 17: Gamsberg Video
Gamsberg Video https://www.youtube.com/watch?v=-tcsgJpTIHk&feature=youtu.be VEDANTA RESOURCES PLC – FY2018 INTERIM RESULTS AND CAPITAL MARKETS DAY 17
Slide 18: Zinc International Overview
Zinc International Overview Established track record… …..Enabling key focus areas for growth Improved safety performance 1 Drive ‘best in class’ HSE Fundamental changes to operating philosophies 2 Develop quality project pipeline Delivered LoM extensions of all assets Achieve 1st quartile costs thro
Slide 19: Zinc International Locality
Zinc International Locality Vision is to be the safest, socially responsible 1mtpa integrated Zn producer; in the Q1 median of the global cost curve Skorpion Zinc (100% VEDL) Open pit zinc mine and refinery Largest integrated zinc operation in Windhoek Africa Botswana LoM of 4 years Namibia
Slide 20: Gamsberg – Anchor for Zinc International Growth
Gamsberg – Anchor for Zinc International Growth Mid CY 2018 Phase 1 – 250ktpa Time to Total Medium term Phase 2 – 200ktpa operation 600ktpa Long term Phase 3 – 150ktpa Gamsberg Project (Phase 1) Gamsberg U/G (Phase 3) Gamsberg North Gamsberg East U/G Current project (open-pit mine, Resource Resour
Slide 21: Gamsberg Project Progress – Site Activities in Full Swing
Gamsberg Project Progress – Site Activities in Full Swing North pit Thickener pre-assembly test Transformer installed on site Plant civil footprint Mill shell on site Jaw Crusher Delivered to Site Tailings dam Mining (>50% Pre-strip Plant and Infra (~55% Tailings Facility & Digitalisation work compl
Slide 22: BMM Operations Step Up & Growth Opportunity
BMM Operations Step Up & Growth Opportunity BMM Operational Performance is Trending Positively… ..and can be Further Enhanced with Swartberg Phase 2 Production per year, Metal (Zn & Pb) in concentrate kt Swartberg Deeps Feed grade % Mined out area to 260m 120 >100 7,20 Includes Swartberg 110 7,00 de
Slide 23: Skorpion Zinc's Increased LOM Certainty & U/G Potential
Skorpion Zinc’s Increased LOM Certainty & U/G Potential The delivery of Pit 112 has created more certainty around SZ…. …With further potential at Pit 112 and the planned refinery conversion Production per year, Zn metal South North Currently mined Skorpion orebody kt Current production Ex-pit grad
Slide 24: ZI Outlook
ZI Outlook FY18 FY19 FY20 Indicative Prod (kt) 150-160 240-260 410-430 Consolidated Outlook COP ($/t) <1,500 <1,200 <1,100 Project on track and progressing as per plan Gamsberg First production by mid CY2018 and on budget for capex target of $400mn 250kt Production@ FY19 production expected to b
Slide 25: Zinc India
Vedanta Resources Plc FY2018 Interim Results and Capital Markets Day Zinc India Sunil Duggal – CEO, Zinc India 10 November 2017 VEDANTA – ZINC–LEAD–SILVER | OIL & GAS | ALUMINIUM | COPPER | IRON ORE | POWER VEDANTA RESOURCES PLC – FY2018 INTERIM RESULTS AND CAPITAL MARKETS DAY
Slide 26: Zinc Market Overview
Zinc Market Overview Supply Shortage Leading to Multi-year low spot TCs Declining stocks at LME & SHFE warehouses $/tonne mn tonne $/tonne 1.40 4,000 400 1.20 3,500 350 300 3,000 Spot TCs dipped 1.00 250 to $25/mt in 2,500 0.80 Oct’17 200 2,000 0.60 150 1,500 100 0.40 1,000 50 0.20 500 0 0.00 0 Oct
Slide 27: Hindustan Zinc - A Sustainable Enterprise
Hindustan Zinc - A Sustainable Enterprise 2nd largest zinc-lead miner globally; Core Strengths 4th largest zinc-lead smelter globally Mines with R&R base of 404.4 million On track for 1.2 million tonnes of MIC capacity by 2020; 1 tonnes; Mine life of 25+ years UG mines ramping up at 5 year CAGR of 3
Slide 28: Portfolio of Tier-1 Assets
Portfolio of Tier-1 Assets Rampura Agucha Mine Reserves 49.7mn tonne Resources 50.3mn tonne Chanderiya Smelting Complex Reserve Grade Zn 13.9%, Pb 1.9% Pyrometallurgical Lead Zinc Smelter Current Ore Capacity 6.15mtpa Pantnagar & Haridwar 105,000tpa zinc and 35,000 tpa lead Processing and refining o
Slide 29: Strong Track Record of Growth
Strong Track Record of Growth Reserves & Resources (mn tonne) – 2.5X Growth Mined Metal (‘000 tonne) – 3X Growth 404 880 887 889 907 390 840 870 365 375 830 348 769 332 735 106 110 113 145 151 313 88 92 299 272 629 86 572 84 232 532 210 295 78 261 267 283 67 178 223 239 409 60 165 197 216 364 146 18
Slide 30: Mine Expansion Project Overview
Mine Expansion Project Overview Mine expansions in sync with increasing R&R Maintaining First Quartile of Global Cost Curve Five major projects to increase MIC capacity to 1.2mtpa (17.5mtpa Continue to be in first quartile of global cost curve ore capacity), including RAM OC replacement CoP he
Slide 31: Silver Portfolio – Realising Potential of 1,000t
Silver Portfolio – Realising Potential of 1,000t Silver Production 452 500+ 1,000 Ramp up FY2017 FY2018 2021 Ore to Metal Recovery (FY2017) Achieving 1,000 tonnes Key Focus Areas ORE CONCENTRATE METAL Mining Lead/Bulk Lead (452 850) Concentrates Smelting Focus on silver-rich deposits 470 tonne
Slide 32: Resource Driven Growth
Resource Driven Growth Sustained Commitment to Exploration → Strong Track Record of R&R Addition 10 Year R&R Trend mn tonne 450 40 36.1 36.1 R&R 404mn tonne in FY2017 34.7 35 35.2 35.3 400 34.1 34.1 35 31.5 R&R estimation to the JORC 350 standard and audited by 30 27.5 international consultants
Slide 33: Way Forward
Way Forward 1.5mtpa Shaft and decline integration capacity Multi-level mining under Digital transformation to boost productivity planning New prospects & tenements 25+ years of mining R&R with potential of 1.2mtpa 1.2mtpa capacity Transition to underground mining progressing smoothly by FY2020 Shaft
Slide 34: Q & A Zinc
Vedanta Resources Plc FY2018 Interim Results and Capital Markets Day Q&A Zinc 10 November 2017 VEDANTA RESOURCES PLC – ZINC–LEAD–SILVER | OIL & GAS | ALUMINIUM | COPPER | IRON ORE | POWER VEDANTA RESOURCES PLC – FY2018 INTERIM RESULTS AND CAPITAL MARKETS DAY
Slide 35: Capital Allocation Framework: Focus on Shareholder Returns
Capital Allocation Framework: Focus on Shareholder Returns World class assets and operational excellence to deliver strong and sustainable cash flows Production growth and asset optimization Strong Maintain Grow Shareholder Returns Strong Balance Sheet Existing Businesses VEDANTA RESOURCES PLC – FY2
Slide 36: Appendix
Vedanta Resources Plc FY2018 Interim Results and Capital Markets Day Appendix VEDANTA RESOURCES PLC – ZINC–LEAD–SILVER | OIL & GAS | ALUMINIUM | COPPER | IRON ORE | POWER VEDANTA RESOURCES PLC – FY2018 INTERIM RESULTS AND CAPITAL MARKETS DAY
Slide 37: Southern African Zinc Cluster: Unrivalled Opportunity for Long-Term LOM & Organic Growth
Southern African Zinc Cluster: Unrivalled Opportunity for Long-Term LOM & Organic Growth Southern Namibia Cluster VZI R&R Movement Since Acquisition High value Resource Depletion Resources Reserves Base to enable long LOM 400 and expansions 26mt R&R @ 10.6% Zn+Pb 350 Total of 21.5mt of Metal in R&