Bhp Group Ltd · ASX:BHP
Bhp — BHP Billiton — Investor Presentation (September 2004)
28 slides from Bhp's investor presentation, Sep 1, 2004
Slide 1: BHP Billiton Carbon Steel Materials Metallurgical Coal Expansion Briefing
BHP Billiton Carbon Steel Materials Metallurgical Coal Expansion Briefing Sydney: 1 September, 2004
Slide 2: Disclaimer
Disclaimer The views expressed here contain information 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 information. Any forward looking information in this presentation ha
Slide 3: Presentation overview
Presentation overview • BHP Billiton Metallurgical Coal Overview Bob Kirkby • Global Steel & Metallurgical Coal Markets Andrew Offen • Metallurgical Coal Growth Strategy Bob Kirkby Dave Murray Col Bloomfield Page 3
Slide 4: High value incremental growth to meet customer demand
High value incremental growth to meet customer demand • BHP Billiton today announced its intention to increase production capacity to 100Mtpa (100% basis) by 2010 – compared to production of 58Mpta in FY2004 • Brownfield and greenfield expansions at BHP Billiton Mitsubishi Alliance (BMA), BHP Mitsui
Slide 5: High value incremental growth to meet customer demand (cont'd)
High value incremental growth to meet customer demand (cont’d) • Broadmeadow on schedule for start-up in mid 2005 (3.6Mtpa) • Dendrobium on schedule for start-up in mid 2005 (3.6Mtpa) • Queensland coal 52Mtpa – 57Mtpa capacity expansion underway. Includes additional mining equipment, prep. plant upg
Slide 6: BHP Billiton - the premier supplier of metallurgical coal to the global steel industry
BHP Billiton - the premier supplier of metallurgical coal to the global steel industry • BHP Billiton is the world’s largest supplier of seaborne metallurgical coal - market share ~30% • Coal supplied to more than 80 customers in 28 countries across the globe • FY2004 highlights include record produ
Slide 7: Long life, tier 1 metallurgical coal assets
Long life, tier 1 metallurgical coal assets BMA & BMC (50 – 80%) Production: 52 Mtpa* Years of Life: > 50 Maruwai (100%) Illawarra (100%) Prodn: 6 Mtpa* Initial Capacity: 5 Mtpa Years of Life: 45 Years of life: > 50 Currently in Pre-Feas. *FY2004 production figures – 100% basis Page 7
Slide 8: Steel and Metallurgical Coal Market Outlook
Steel and Metallurgical Coal Market Outlook Andrew Offen Marketing Director Carbon Steel Materials
Slide 9: What has changed?
What has changed? More robust view of global steel demand and hence crude steel and pig iron production + Increasing likelihood that the blast furnace/BOF will increase or at least maintain share of steel production + Coke shock: high and volatile prices, increased fears over security of supply + St
Slide 10: Global steel outlook and trends
Global steel outlook and trends • Global economic environment remains very positive for steel demand – Chinese steel demand strong – Signs of improved demand growth in the US, Brazil and India • Additional Chinese steel making capacity being built • Chinese import demand sustaining high global produ
Slide 11: Global steel production outlook (Mt)
Global steel production outlook 1400 1200 1000 800 (Mt) 600 400 200 0 2002 2003 2004 2010 China Japan Other Asia W Europe CIS/EE N America S America Other Source: IISI & CRU Page 11
Slide 12: Blast Furnace/BOF maintaining market share
Blast Furnace/BOF maintaining market share 64 (%) share of global steelmake 63 62 61 60 59 58 1995 1996 1997 1998 1999 2000 2001 2002 2003 Source: BHP Billiton Page 12
Slide 13: Our major customers are building/planning new coke battery capacity
Our major customers are building/planning new coke battery capacity Russia Russia&&Ukraine Ukraine--new new UK UK--proposed proposednewnew Italy Italy--rebuilds rebuilds capacity capacityproposed proposed battery at Port Talbot battery at Port Talbot atatTaranto Taranto Japan Japan--proposed propose
Slide 14: Seaborne metallurgical coal demand outlook
Seaborne metallurgical coal demand outlook Actual 270 250 230 (Mt) 210 190 170 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: BHP Billiton Page 14
Slide 15: Increased supply will not be sufficient to meet increased demand
Increased supply will not be sufficient to meet increased demand SEABORNE SUPPLY GROWTH SEABORNE DEMAND GROWTH • Queensland • Increasing coke production by • Canada traditional customers • China – Japan, Europe, India, Brazil, South Korea • USA (swing) Less • New growth opportunities • New Zealand t
Slide 16: High value growth to meet customer demand ~ 100Mtpa capacity by 2010
High value growth to meet customer demand ~ 100Mtpa capacity by 2010 Bob Kirkby Group President Carbon Steel Materials Dave Murray CEO BMA Col Bloomfield President Illawarra Coal
Slide 17: High value incremental growth to ~100Mtpa capacity
High value incremental growth to ~100Mtpa capacity Concept ~18 Mtpa ~100 Mtpa Pre Feas ~14 Mtpa Approved Various Q Coal ~10 Mtpa Projects (BMA & BMC) 58 Mtpa* Maruwai Illawarra Expn. Dendrobium Q Coal (BMA & Q Coal 52-57Mtpa BMC, ie: Poitrel) (inc. Broadmeadow) Q Coal 57-59Mtpa Other Illawarra Q Coa
Slide 18: The majority of capacity expansion tonnes will be HCC
The majority of capacity expansion tonnes will be HCC CSM Thermal Coal Semi-Soft Expansion: 42 Mtpa Coking Coal - 70% hard coking coal - 15% semi soft coking coal - 15% thermal coal - Majority brownfields Hard Coking Coal Page 18
Slide 19: Queensland Coal: current growth projects and additional infrastructure access - update
Queensland Coal: current growth projects and additional infrastructure access - update • Queensland Rail – 8Mtpa additional capacity contracted since mid 2003 - and a further 8Mtpa secured to support continued growth • Dalrymple Bay Coal Terminal Producing coal at Broadmeadow June 2004 – 3Mtpa addit
Slide 20: Queensland Coal: 52Mtpa to 57Mtpa expansion – update
Queensland Coal: 52Mtpa to 57Mtpa expansion – update • 132Mbcm of contract stripping – additional operating cost over ~ 2 years • Additional mobile mining equipment at Norwich Park, Peak Downs, Saraji and Goonyella • Saraji prep. plant upgrade Peak Downs mobile mining equipment • Peak Downs prep. pl
Slide 21: Queensland Coal: 57Mtpa to 59Mtpa – announced today
Queensland Coal: 57Mtpa to 59Mtpa – announced today • Hay Point Coal Terminal Expansion + 6Mtpa (34Mtpa - 40Mtpa) • Additional mobile mining equipment at Saraji and Goonyella • 32Mbcm contract stripping at Saraji – additional operating cost over ~ 3 years • Complete 2nd half 2006 Coal loading at Hay
Slide 22: Illawarra Coal: 7Mtpa to ~14Mtpa – update
Illawarra Coal: 7Mtpa to ~14Mtpa* – update • Dendrobium – On schedule for start-up mid 2005 (3.6Mtpa). Considering incremental expansion + 0.6Mtpa • New West Cliff longwall in production 1st Dendrobium coal train June 2003 • Future growth will focus initially on debottlenecking at Appin & West Cliff
Slide 23: Maruwai discovery: potential coking coal province - update
Maruwai discovery: potential coking coal province - update • The Maruwai discovery is located in Central/East Kalimantan and contains a range of coals • Our vision is for a long term integrated basin development • Expect to start with high quality HCC development of up Drilling at M Drilling ataruwa
Slide 24: Conclusion
Conclusion • Global steel outlook is robust • The fundamentals of the HCC market are strong and demand is growing globally • BHP Billiton and its partners are best placed to close the supply- demand gap. – Expansions to 100Mtpa will be brought on line incrementally – in line with customer demand – F
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Slide 26: BHP Billiton Queensland Coal Operations
BHP Billiton Queensland Coal Operations Page 26
Slide 27: BHP Billiton Illawarra Coal Operations
BHP Billiton Illawarra Coal Operations 0 10 KILOMETRES M ined Area Current M ining Area APPIN Portal WEST CLIFF DENDROBIUM O’BRIEN’ S DRIFT Kemira Valley Wollongong PORT KEMBLA COAL TERMINAL ELOUERA PORT KEMBLA STEELWORKS Page 27
Slide 28: BHP Billiton Maruwai Discovery
BHP Billiton Maruwai Discovery Maruwai Maruwai Discovery Discovery Kalimantan Kalimantan KALIMANTAN SULAWESI PAPUA SUMATRA NUSA TENGGARA Jakarta LOM BOK JAVA BALI AUSTRALIA Page 28
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