Grange Resources Limited · ASX:GRR
Grange Resources — Australian Resources Conference 2008
29 slides from Grange Resources's conference presentation, Feb 15, 2008
Slide 1: Southdown Magnetite and Kemaman Pellet Project
For personal use only Southdown Magnetite and Kemaman Pellet Project An advanced Iron Ore Project for the Direct Reduction Pellet Market AUSTRALIAN RESOURCES CONFERENCE Dubai, 10 February 2008 Grange Resources Limited (GRR) Level 11, 200 St Georges Terrace Perth, WA 6000, Australia Phone + 618 9321
Slide 2: Disclaimer
Disclaimer For personal use only • The material in this presentation (“material”) is not and does not constitute an offer, invitation or recommendation to subscribe for, or purchase, any security in Grange Resources Limited (“GRR”) nor does it form the basis of any contract or commitment. GRR makes
Slide 3: Project Location - Southdown
Project Location - Southdown For personal use only 3
Slide 4: Rio Tinto Aeromagnetic Survey
RIO TINTO AEROMAGNETIC SURVEY For personal use only • Rio Tinto’s aeromagnetic survey indicates that the Southdown deposit is closest to the surface within Grange’s mining leases • After 3½ years of negotiations with Rio Tinto, Grange acquired the 6km eastern section. Rio Tinto took a stake in Grang
Slide 5: Southdown Resource
Southdown Resource For personal use only 1200 Western Total 1000 6km zone 12km zone 1 Billion 800 tonnes 479Mt @ overall 37.3% resource Potential MT 600 Inferred Magnetite target 52Mt Indicated 400 JORC Indicated 200 427Mt 38% Magnetite 0 Aug-06 Oct-07 • Grange now controls total deposit length of 1
Slide 6: Project Highlights
Project Highlights ; For personal use only Advanced Project – All approvals should be in place by 2008 Growing Demand in Key Markets ; Feasibility Study Completed ; Infrastructure in Place ; Ability to produce High Quality (DR Grade) Pellets ; Pellet Plant – First for SE Asia means close to Key Mark
Slide 7: Project Overview
Project Overview For personal use only Dual Location PELLET PLANT PRODUCING 4. Southdown DIRECT REDUCTION AND Open pit mine operation BLAST FURNACE PELLETS Magnetite concentrate production 6.6mtpa @ 69% Fe Slurry pipeline to existing port Shipping in Capesize vessels Kemaman Pellet product
Slide 8: Project Infrastructure – Southdown & Albany
Project Infrastructure – Southdown & Albany For personal use only Slurry Pipeline Optimal transport method Finalising easements with landowners Power Western Power Networks 220kv line from Muja (150MW capacity). EPA Assessed Interconnected to SWIS1 Transmission line easement progressing
Slide 9: Project Infrastructure – Southdown & Albany
Project Infrastructure – Southdown & Albany All key infrastructure in place or well advanced For personal use only ; Water Pit dewatering, site water harvesting, retreating Albany town waste water & groundwater ; Power Base load power supply potentially augmented by renewable power ; Power Transmiss
Slide 10: Albany Port
Albany Port For personal use only NEW BERTH LOCATION 10
Slide 11: Environmental Benefits of DR/EAF Steelmaking
Environmental Benefits of DR/EAF Steelmaking For personal use only Carbon Emissions for Steelmaking Routes • Global Steel industry accounts for 5% of 2500 worldwide CO2 emissions KG CO2/t liquid steel 2000 • Steel makers using natural gas and DR/EAF 1500 method (feed 80% DRI, - 42% - 46% 20% scrap)
Slide 12: Environmental Benefits – Southdown Project
Environmental Benefits – Southdown Project WATER RECYCLING For personal use only • Most of the project’s process water supply will come from recycled waste water from the city of Albany. • At least 5,000kl of water per day will be used growing to 7,700kl (100% of total requirements) by 2018. • This
Slide 13: Environmental Benefits – Southdown Project
Environmental Benefits – Southdown Project WIND POWER For personal use only • The Southdown Project will involve the construction of a new 220kV transmission line ~250km to the mine from the local power grid. • 2 wind power companies are seeking to set up +100MW wind farms near the mine to supply re
Slide 14: Project Infrastructure - Kemaman
Project Infrastructure - Kemaman All key infrastructure in place For personal use only ; Deep Water Port Existing Wharf at Kemaman (West Wharf) Suitable for Capesize vessels ; Transport Conveyor corridor between Port and pellet plant ; Power, Gas & Water Power – TNB (substation immediately next to s
Slide 15: Project Infrastructure – Kemaman Port
Project Infrastructure – Kemaman Port For personal use only 15
Slide 16: Project Infrastructure – Kemaman Site
Project Infrastructure – Kemaman Site For personal use only 16
Slide 17: Demand for DR Pellets
Demand for DR Pellets DR pellet demand is projected to increase significantly in SE Asia and the Gulf Region. For personal use only Demand in this market is growing much faster than the China iron ore market SE Asia 70 Perwaja Steel Amsteel 60 Krakatau Steel 50 Lion Group Banting Maegma St
Slide 18: Iron Ore Pellet Market Outlook
Iron Ore Pellet Market Outlook For personal use only • Brazilian producer SAMARCO, of which CVRD owns 50% is building their 3rd pellet plant in Brazil. • SAMARCO says that all the supply from their new pellet plant (planned to be in operation in March 2008, which has the same investment cost as Gran
Slide 19: Kemaman Pellet Plant – Strategic Position
Kemaman Pellet Plant – Strategic Position Kemaman Freight Advantage Kemaman has distinct freight advantages over South American pellet For personal use only producers • Close to key markets hence much lower shipping costs • Current spot market freight Brazil to China is >US$100/tonne • Grange shippi
Slide 20: Centre of the Market
Centre of the Market For personal use only 20
Slide 21: Kemaman Pellet Plant – Strategic Position
Kemaman Pellet Plant – Strategic Position Proximity to Customers For personal use only DR PELLET CONSUMERS COUNTRY 1 Perwaja Steel Malaysia 2 Amsteel Malaysia 3 Maegma Steel Malaysia 4 Lion Group Banting Malaysia 5 Krakatau Steel Indonesia 6 Quasco Qatar 7 Hadeed Saudi Arabia 8 Various UAE 8 Various
Slide 22: Kemaman Pellets – Strong Returns
Kemaman Pellets – Strong Returns For personal use only Capital Costs US$ million Southdown 839 Kemaman 534 Total Capital Cost 1,373 Potential Gross Margins (Pre-Capex) : >US$500m per year 22
Slide 23: Partners - Sojitz
Partners - Sojitz • Sojitz to become a 30% partner in the project. For personal use only • Sojitz will pay a royalty to Grange of up to 3.5% on their 30% of production • Sojitz is a recognised leader in the iron ore pellet sector and is the No 1 trading firm in Japan for pellets and pellet feed. • S
Slide 24: Project Status
Project Status The Southdown & Kemaman projects are well advanced with feasibility complete, For personal use only most infrastructure in place and approvals in progress. Item Status Expected Timing Feasibility Study ; Kemaman Environmental Approval ; Kemaman Investment Incentives Southdown Environm
Slide 25: Grange Overview
Grange Overview Board of Directors Shares For personal use only Anthony Bohnenn Non Executive Chairman ASX Code: GRR Russell Clark Managing Director Current shares on Issue: 115,201,099 Alex Nutter Technical Director Unlisted Options on Issue to Rio Tinto: 17,500,000 Richard Krasnoff Non Executive D
Slide 26: Why Australia? – The Southdown Mine
WHY AUSTRALIA ? – THE SOUTHDOWN MINE • Large DR grade quality magnetite ore body in For personal use only Australia • Australia is one of the safest places in the world and a reliable business environment • Solid political situation • Very good infrastructure, mine only 100km from existing port • No
Slide 27: Why Malaysia? – The Kemaman Pellet Plant
WHY MALAYSIA ? – THE KEMAMAN PELLET PLANT For personal use only • Kemaman Port: Deep water port with existing infrastructure • Grange has secured the rights for +50 years to use the port and the West Wharf • Possibility to build a second pellet plant, 60 ha. Land available • 15 years tax holiday gra
Slide 28: Southdown – summary
SOUTHDOWN – summary… For personal use only • Poised for iron ore pellet production for 35 years. • Niche Market, premium quality, high value product. • Supply/Demand relationship very favourable. • The market in starved for our product – sellers’ market. 28
Slide 29: Key Contacts
Key Contacts For personal use only Thank you… Also look at our website www.grangeresources.com.au Anthony Bohnenn Chairman, Grange Resources Tel +31 346 55 4460 Tel +61 (8) 9321 1118 abohnenn@grangeresources.com.au 29
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