FY 2008 results and comments

Transcription

1 FY 2008 results and comments INVESTOR & ANALYST UPDATE 2 March

2 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 has been prepared on the basis of a number of assumptions which may prove to be incorrect. This presentation should not be relied upon as a recommendation or forecast by Banpu plc. Nothing in this release should be construed as either an offer to sell or a solicitation of an offer to buy or sell shares in any jurisdiction. 2

3 1. Introduction 2. Focus: reserves and resources update 3. Operational review 4. Commercial review 5. Financial review 3

4 1. Introduction Chanin Vongkusolkit Chief Executive Officer 4

5 Banpu in 2008: a pan-asian coal-focused energy group Coal mine Coal mine project Coal-fired power Coal-fired power project Gas-fired power Coal mine tonnage figures show approximate run-of-mine output capacity (and targets for projects). Chinese power assets sell both power and steam. Banpu ownership 100% unless otherwise shown. CHINA 2 3 Ratch (15%) 4,345MW Gaohe (45%) 6Mtpa Daning (56%) 4Mtpa HongSa (40%) 1,800MW LP2/ CMMC >0.5Mt 4 Luannan Zhengding 48MW, 180tph Hebi (40%) 1.5Mtpa BLCP (50%) 1,434MW 100MW, 128tph 100MW, 490tph Zouping (70%) 1 Power China Upgrades and expansion completed Coal prices squeeze margins Coal China Acquisition of 100% control of AACI Daning longwall relocations Q1, Q3 Hebi output as planned Power Thailand BLCP: smooth operation Hong Sa: potential two year delay THAILAND INDONESIA * Banpu effective equity interest in ITM assets is 73.7% Bharinto* 4 Mtpa Trubaindo* 5 Mtpa Kitadin* Jorong* 3 Mtpa Indominco- Bontang* 12 Mtpa Coal Indonesia ASP up; strip ratios also up Cost management schemes Bontang port expansion E Block awaiting final permit 5

6 Banpu in 2008: the figures Coal sales 18.5 Mt Unit: Bt. million Down 0.8 Mt 4% Y-Y Coal Power Total Y-Y Revenue 46,053 4,460 50,530 56% Equity income 1,781 3,165 4,946 10% EBIT 13,349 3,601 16,951 89% Net income 6,325 2,902 9,228 39% 6

7 GDP and coal market forecasts for 2009 N. America Europe RUSSIA Japan 80 Mt 08 09f 10f 08 09f 10f AMERICAS 12 Mt 47 Mt S. America 194 Mt EUROPE & MEDITERANEAN 08 09f 10f Middle East 08 09f 10f CHINA 38 Mt INDIA 40 Mt 11 Mt 37 Mt S.KOREA 78 Mt 60 Mt TAIWAN SE. ASIA JAPAN 123 Mt Developing Asia Includes China & India Mt 65 Mt COLUMBIA 08 09f 10f Key: Source: IMP World Economic Outlook January 2009, Steam Coal Forecaster November 2008 S.AFRICA GDP % change Thermal coal exports Thermal coal imports 209 Mt INDONESIA 08 09f 10f 119 Mt 7 AUSTRALIA

8 Banpu outlook in Indonesia in 2009 ITM OPERATIONS & PROJECTS (Saleable output targets) East Kalimantan Central Kalimantan TRUBAINDO 5 Mt Bunyut Port BHARINTO Commissioning by end 2010 INDOMINCO 13 Mt Samarinda Balikpapan Bontang Coal Terminal Captive coalfired power KITADIN (suspended) Bontang Indominco Trubaindo - Expansion final phase (barge loader, unloader) - CFP commissioning - E.Block: first output - W.Block UG: trial output - Target: 5Mt (saleable) - South Block: first output Palangkaraya South Kalimantan Bharinto - Infrastructure development POWER Operation Project Banjarmasin JORONG 2.5 Mt Jorong - Target: 2.5Mt (saleable) - Better water management COAL Operation Project Jorong Port 8

9 Banpu outlook in China in 2009 BANPU CHINA OPERATIONS & PROJECTS Gaohe (45%), Shanxi Daning (56%), Shanxi Zhengding, Hebei HZTM (40%), Henan BEIJING Luannan, Hebei Zouping (70%) Shandong Coal - AACI: full integration of staff/systems with Banpu - Daning: 4Mt ROM target (saleable coal 3.2Mt) - Gaohe: construction progress - Hebi: expect 1.4Mt sales POWER COAL Operation Project Operation Project Power - Expect to benefit from lower coal costs - Better capacity utilization 9

10 Banpu outlook in Thailand and Laos in 2009 BANPU THAILAND OPERATIONS & PROJECTS CMMC and LP2 mine closure Hong Sa (40%), Laos BLCP - Expect smooth operation - Lower bottom line Hong Sa - Finalize EPC pricing RATCH (15%), Ratchaburi - Finalize tariff negotiation BLCP (50%), Rayong Coalmines - Closure and land reclamation POWER COAL Operation Project Operation Project 10

11 HR in 2009 NEW ORGANISATION STRUCTURE Effective Jan 2009 CEO Internal Audit Implementation of New Organisation Structure Coal Business Unit COO Power Business Unit Strategy & BD Corp.Sec. & Governance Finance Corporate Affairs Corporate Services New Matrix Management Continue integration of AACI Continue to focus on training programmes 11

12 2. Focus: reserves and resources update Neil Turvey Head of Technical Development & Services 12

13 Resources and reserves concept Coal in the ground for which there are reasonable prospects for eventual economic extraction COAL RESOURCES Economically mineable part of a measured and indicated coal resources COAL RESERVES SUFFICIENCY OF GEOLOGICAL DATA FOR MINE PLANNING Insufficient Adequate Extensive INFERRED INDICATED MEASURED PROBABLE PROVED Confidence: Reasonable High MODIFYING FACTORS (REGULATORY, ENVIRONMENTAL, SOCIAL ) 13

14 Examples of how resources can convert to reserves Pit depth (m) 0 ILLUSTRATIVE ONLY Mineplan with feasibility study at 200m depth 1 ECONOMIC ASSUMPTIONS Mineplan with higher stripping ratio Higher coal price justifies higher average strip ratio and allows more coal to be extracted Original mine plan Original reserves -100 Additional reserves -150 Additional reserves Original depth cut-off at 150m New depth cut-off at 200m 2 TECHNICAL FEASIBILITY New study could prove that additional coal can be mined and increases reserves base 14

15 Changes between 2007 and 2008 reserves (100% basis) 100% basis (Mt) Indominco Trubaindo LT price assumptions / more exploration / engineering studies 2008 coal sales Gaohe Pre-evaluation Postevaluation Increase from

16 Changes between 2007 and 2008 reserves (equity basis) Equity basis (Mt) Indominco Trubaindo 2008 coal sales Daning (from AACI acquisition) Gaohe (from AACI acquisition) LT price assumptions / more exploration / engineering studies Pre-evaluation Postevaluation Increase from

17 Organic expansion of Banpu s reserves since 2004 NON-ACQUISITION INCREASE IN RESERVES (100% BASIS) Exploration and study: Indominco (+16) LT price: Trubaindo (+16), Indominco (+14), Jorong (+3) Exploration and study: Indominco Study and LT price: Indominco Exploration, study and LT price: Indominco(+24), Kitadin (+10), Bharinto (+18) Exploration, study and LT price: Indominco (+66) Turbaindo (+27) +49Mt +18Mt +12Mt +51Mt +92Mt

18 Banpu Coal Resources & Reserves Statement INDICATED 584 Mt 384 Mt 100% basis As at 31 December 2008 Equity tonnage Notes: Reporting generally in accordance with JORC Code plus some internal estimates. Major changes audited by independent experts. * Only Measured and Indicated Coal Resources MEASURED 1,556 Mt 1,065 Mt 110 Mt 255 Mt PROBABLE 183 Mt PROVED 417 Mt RESOURCES* 2,141 Mt (100% basis) RESERVES 600 Mt (100% basis) 18

19 Reserves and resources equity tonnes by asset CHINA Resources: 215 Reserves: 135 Gaohe Daning Hebi THAILAND Resources: 1.7 Reserves: 0.1 Lampang Payao Trubaindo Bharinto Jorong Indominco Kitadin 123 INDONESIA Resources: 1,232 Reserves:

20 3. Operational review Rawi Corsiri Chief Operating Officer 20

21 3. Operational review i) Coal business 21

22 Indonesian coal operations in 2008 ITM OPERATIONS & PROJECTS Central Kalimantan TRUBAINDO 4.5 Mt East Kalimantan Bunyut Port BHARINTO (start by end 2010) INDOMINCO 10.8 Mt Samarinda Balikpapan Bontang Coal Terminal Captive coalfired power project KITADIN (suspended) Coal output : 2008 : 18.1 Mt (incl. Thai mines) 2009 : 20.5 Mt target Project update: Indominco East Block: forestry permit issued, awaiting clearance POWER COAL Palangkaraya Project Operation Project South Kalimantan Banjarmasin JORONG 2.4Mt Jorong Port Bharinto: ongoing development to commission by end 2010 Indominco Underground: feasibility analysis and pilot mine underway 22

23 Indonesian quarterly output and SR analysis STRIP RATIO (t/bcm) STRIP RATIO (t/bcm) STRIP RATIO (t/bcm) COAL OUTPUT (Mt) COAL OUTPUT (Mt) COAL OUTPUT (Mt) 2.7Mt 2.8Mt 2.7Mt 2.6Mt 2.5Mt 0.9Mt 1.1Mt1.3Mt 1.1Mt 1.1Mt 0.7Mt 0.7Mt 0.6Mt 0.5Mt 0.6Mt Q108 Q208 Q308 Q408 Q109e Indominco-Bontang CV: kcal/kg High SR still due to favorable prices Q108 Q208 Q308 Q408 Q109e Trubaindo CV: kcal/kg New contractor and equipment arrived on site Q108 Q208 Q308 Q408 Q109 Jorong CV: 5300 kcal/kg Expect Q109 output to improve from dry weather Note: output figures are saleable coal 23

24 China coal operations in 2008 BANPU CHINA 2009 COAL PRODUCTION TARGET PRICE vs. COST (RMB/ t) AVERAGE COAL PRICE PRICE vs. COST (RMB/ t) AVERAGE COAL PRICE POWER COAL Operation Project Operation Project * ROM production Gaohe (45%) Shanxi Province Daning (56%) Shanxi Province 4 Mt BEIJING HZTM (40%) Henan Province 1.4 Mt COAL OUTPUT (Mt ROM) 3.1Mt Mt Q308 Q408 Q109e Daning CV: Kcal/kg Banpu 56% PRODUCTION COST 1.01 Mt 1.4 Mt 1.4 Mt 0.61Mt 0.9 Mt 0.38Mt 0.32 Mt 0.3 Mt Daning obtained certificate of 2007 first class safety and high efficiency coal mine issued by Coal Industry Assoc. of China in Dec COAL OUTPUT (Mt ROM) Q308 Q408 Q109e Hebi Zhong Tai Mining CV: Kcal/kg Banpu 40% PRODUCTION COST Surface sub-station 110 KV to supply power for new mining area is under construction ( to be completed in 2Q 2009) 24

25 3. Operational review ii) Power business 25

26 Power Thailand : BLCP in 2008 Units: Bt. Million (100% basis) Total revenue Availability Payment (AP) Energy Payment (EP) Dispatch (%) Operating cost EBIT EBITDA Equity income 2008 Bt 3,165 m* 3Q08 5,543 3,196 2,204 88% 2,387 2,667 3,154 4Q08 4,173 2,310 1,764 78% 2,365 1,358 1, ,307 11,716 7,906 87% 8,938 9,340 11, ,430 11,474 8,301 89% 9,502 8,897 10,825 * Based on Banpu s 50% interest; including FX loss Bt202million 26

27 Power China : BPIC in 2008 Sales* (USD m) EBITDA (USD m) Utilization (Hours) Power tariff (RMB/kwh) Coal price** (RMB/t) Seasonal heat sold and higher power tariff drive higher sales and EBITDA despite higher coal price Luannan Hebei Province, PRC Power 100MW; Steam 128tph (Banpu 100% ) 3Q , Q , , Seasonal heat sold and higher power tariff drive higher sales and EBITDA despite higher coal price Zhengding Hebei Province, PRC Power 48MW; Steam 180tph (100%) 3Q , Q , , Higher power and steam tariff drive higher sales and EBITDA Zouping Shandong Province, PRC Power 100MW; Steam 430tph (70%) 3Q , Q , , * Unaudited figures ** Including transportation (100% basis) 27

28 4. Commercial review Philip Gasteen Head of Marketing & Logistics 28

29 Banpu average selling prices in 2008 Banpu ASP in 2008 Note: coal vs oil prices USD per tonne ASP 2008 $72 /t (+75%) ASP 4Q08 $86.1 /t (+3%) Quarterly BJI Rebase to WTI spot price API#4 FOB Richards Bay Newcastle FOB 130 Monthly BJI 250 As at Feb 27th Monthly ASP Quarterly ASP $65.3 (+27%) $60.8 (+23%) Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 BJI* Feb 26, 2009 $69.50 Sep-08 Nov Jan 07 Jun 07 Dec 07 Jun 08 Dec 08 $42.8 (-24%) 29

30 Thermal coal market analysis Seaborne thermal coal trade Trends Trends Mt 619Mt Mt 600 Mt FOB cash costs per tonne $85 $75 $49 $39 $40 $63 Australia Russia Australia Russia Australia Russia FX/USD Demand Pacific up 7.1% Atlantic down 1.7% Freight costs high Supply Price positive Queensland flood To steel 10Mt Logistics limitations China exports down Price negative S.Africa Q408 up US up 11Mt Demand Pacific down 2-4% Atlantic flat Freight costs down Supply Price positive/neutral Indonesia flat/down Russia down USA down S.Africa capped China flat Price negative From steel up 25Mt ST logistics okay Source: McCloskey, Wood Mackenzie, Banpu Analysis 30

31 Indicative 2009 coal sales Coal sales contract and pricing status (Feb 09) Comment Contract Status Price Status Global import demand may weaken through 2009 due to global recession. Contracted Fixed Metallurgical coal entering global thermal market 85% 57% 14% Index Indonesian low CV grades almost sold out already; Thai coal finished 15% Uncontracted 14% 15% Unpriced Price under negotiation Gradually committing remaining high CV grades EU contracts linked to API # 4. Some Asian sales linked to GlobalCOAL Newcastle TARGET SALES 2009: 20.5 Mt JPU contracts price negotiation in Q1 31

32 Coal sales by geographic destination (ITM and Thai) Cumulative coal sales 2008 (total 18.5Mt) ITALY INDIA Mt 1Q08 2Q08 3Q08 4Q CHINA S.KOREA 2.3 Mt 1.7 Mt JAPAN Mt 1Q08 2Q08 3Q08 4Q08 1Q08 2Q08 3Q08 4Q Mt 1Q08 2Q08 3Q08 4Q08 1Q08 2Q08 3Q08 4Q08 TAIWAN OTHERS* Mt Mt 1.4 Mt 1Q08 2Q08 3Q08 4Q08 *Includes small, nonregular purchasers THAILAND Mt INDONESIA Mt PHILIPPINES 1.6 Mt Q08 2Q08 3Q08 4Q08 Mid-to-High CV Low-to-Mid CV 1Q08 2Q08 3Q08 4Q08 1Q08 2Q08 3Q08 4Q08 1Q08 2Q08 3Q08 4Q08 32

33 China thermal coal market review 1200 Datong super mixed coal Comment (6,000 kcal/kg) Shanxi super mixed coal (5,500 kcal/kg) Common mixed coal (4,000 kcal/kg) , RMB 635 Jan 09 RMB 597 Jan 09 RMB 390 Jan 09 Winter is slowing the recent fall in prices Some reduction in supply due to government initiatives Chinese government issued 15.9Mt new export quotas but net additional exports will depend on relative international and domestic price levels and new quotas Current domestic long term price is above international spot 0 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 Longer term planning: Not suggesting export increase Using imports as balancing factor Considering higher costs and cross energy sector investment Source: 19 Jan,

34 5. Financial review Somruedee Somphong Chief Financial Officer 34

35 Sales revenues Units: Bt. million 50, % Y on Y Power Bt 4,460 m Revenues in USD +61.4% Y on Y +15% Y on Y ,378 32, Coal Bt 46,070 m +62% Y on Y % decrease in sale volume 75% increase in selling price 3% appreciation of Thai Baht

36 Average gross margin for coal sales in 2008: 48% Bt 25,817 m Bt 18,758 m Bt 16,638 m Bt 16,361 m Coal sales (Bt millions) 39% 40% Bt 6,971 m B t6,126 m 63% Gross margin (%) 39% 41% 38% Bt 3,035 m Bt 2,616 m Bt 3,095 m 41% 36% 31% Bt 1,667 m Bt 717 m Bt 377 m 37% 8% -8% Bt 325 m Bt 38 m 23% 3% Indominco Trubaindo Jorong Thai mines Others 36

37 EBITDA Units: Bt. million 18,772 10,432 Power Bt 4,052 m -27% Y on Y +80% Y on Y 7,547 Coal Bt 14,720 m +200% Y on Y

38 Net Profit after Tax Units: Bt. million 9,228 6,654 Power Bt 2,902 m -36% Y on Y +39% Y on Y 3,610 Coal Bt 6,326 m +201% Y on Y

39 Organic capital expenditure plans 2009 Units: USD million Indominco underground 82 Indominco electrification Trubaindo mobile crusher, wash plant Tandung Mayang fleet expansion Bontang port expansion Bharinto Bontang power plant Indominco East Block Improvement initiatives Gaohe (45% Equity interest) The capital expenditure figures shown above do not include estimates for maintenance or sustaining capital expenditure. 39

40 Balance sheet Net D/E (Times) Net gearing (%) Debt structure 0.66 Fixed 28% % 40% % Floating 72% 18% 12% As end of December

41 Dividend payments Dividend per share (Bt) 5 (Special) 5 (2H08) (1H08)

42 Questions & Answers 42

43 APPENDICES I 43

44 Operating profit Units: Bt. million YoY % Total sales revenues* 50,530 32,442 56% Sales revenues Coal 45,976 28,429 62% Sales revenues Power (BPIC) 4,460 3,865 15% Cost of sales (28,110) (20,964) Gross profit* 22,419 11,478 95% Gross profit - Coal 21,983 10, % Gross profit Power (BPIC) % GPM 44% 35% GPM - Coal 48% 37% GPM Power (BPIC) 9% 25% Note: * Including other business 44

45 Operating profit Units: Bt. million YoY % Gross profit 22,419 11,478 95% GPM 44% 35% SG&A (5,081) (3,952) Royalty (5,537) (3,247) Income from associates 4,946 4,504 Dividend income Coal & Power Other income Other expenses - Operations (963) (511) EBIT 16,951 8,976 89% EBIT - Coal 13,350 3, % EBIT - Power 3,601 5,073-29% EBITDA 18,772 10,432 80% EBITDA - Coal 14,720 4, % EBITDA - Power 4,052 5,518-27% 45

46 Net profit Units: Bt. million YoY % EBIT Interest expenses (1,240) Financial expenses (128) Income tax (core business) (3,768) Minorities (1,333) Net profit before extra items 10,482 Non-recurring items* (1,638) Income tax (non-core business) - Net profit before FX 8,844 7,015 26% FX translations 383 (361) Net profit 9,228 6,654 39% EPS (Bt/share) Note: * Income from non-core assets and other non-operating expenses 16,951 8,976 89% (1,160) (146) (1,120) (269) 6,281 1,107 (372) 67% 46

47 Operating profit Units: Bt. million 4Q08 3Q08 4Q07 QoQ % YoY % Total sales revenues* 16,473 14,352 9,185 15% 79% Sales revenues Coal 15,051 13,382 7,981 12% 89% Sales revenues Power (BPIC) 1, ,164 49% 20% Cost of sales (7,754) (8,079) (6,198) Gross profit* 8,719 6,273 2,987 39% 192% Gross profit - Coal 8,470 6,271 2,783 35% 204% Gross profit Power (BPIC) 240 (9) 193 GPM 53% 44% 33% GPM - Coal 56% 47% 35% GPM Power (BPIC) 17% -1% 17% Note: * Including other business 47

48 Operating profit Units: Bt. million 4Q08 3Q08 4Q07 QoQ % YoY % Gross profit 8,719 6,273 2,987 39% 192% GPM 53% 44% 33% SG&A (1,506) (1,449) (1,029) Royalty (1,870) (1,559) (884) Income from associates 838 1, Dividend income Coal & Power Other income Other expenses - Operations (629) (169) (248) EBIT 5,761 5,212 1,532 11% 276% EBIT - Coal 5,411 4,141 1,133 31% 378% EBIT - Power 350 1, % -12% EBITDA 6,241 5,711 1,870 9% 234% EBITDA - Coal 5,807 4,739 1,278 23% 354% EBITDA - Power % -27% 48

49 Net profit Units: Bt. million 4Q08 3Q08 4Q07 QoQ % YoY % EBIT Interest expenses (404) Financial expenses (27) Income tax (core business) (1,880) Minorities (343) Net profit before extra items 3,107 Non-recurring items* (1,177) (496) 1,362 Income tax (core business) - - (135) Net profit before FX 1,930 2,902 2,117-33% -9% FX translations (187) Net profit 1,744 3,111 1,983-44% -12% EPS (Bt/share) 6.42 Note: * Income from non-core assets and other non-operating expenses 5,761 5,212 1,532 11% 276% (382) (31) (920) (481) 3, (282) (34) (173) (154) 890 (134) % 249% 49

50 APPENDICES II 50

51 By operation and project (100% basis) Unit: Mt CHINA Resources: 464 Reserves: 288 Daning Hebi Proved reserves Probable reserves Resources (Measured & Indicated) Gaohe 312 THAILAND Resources: 1.7 Reserves: 0.1 Lampang Payao 1 0 Indominco 758 INDONESIA Resources: 1,675 Reserves: 312 Trubaindo Jorong Kitadin 167 Bharinto

52 By operation and project (equity basis) Unit: Mt CHINA Resources: 215 Reserves: 135 Daning Hebi Proved reserves Probable reserves Resources (Measured & Indicated) Gaohe 140 THAILAND Resources: 1.7 Reserves: 0.1 Lampang Payao 1 0 Indominco 558 INDONESIA Resources: 1,232 Reserves: 230 Trubaindo Jorong Kitadin 123 Bharinto

53 Banpu s Resources & Reserves statement (100% basis) Mine operation and project Interest (%) Measured Resources Indicated Resources As at 31 December 2008 Total Resources Proved Reserves Probable Reserves Total Reserves As at 31 December 2007 Total Resources Total Reserves Mine operation Jorong Indominco Kitadin Trubaindo Lampang Payao Daning* Hebi** Project Bharinto Gaohe* Total 1, , , Note: figures have been estimated in accordance to JORC Code unless otherwise stated * Figures have been estimated internally, consistent with the JORC Code, and will be independently audited next year ** Figures have been estimated in accordance to Chinese reporting standard 53

54 Acquisition expansion of Banpu s reserves since 2004 ACQUISITION INCREASE IN RESERVES (EQUITY BASIS) Mt +27Mt - 45Mt* +97Mt 21% investment in AACI (56% Daning)* Acquisition of Bharinto** ITM IPO (Dec 07) AACI acquisition (Daning +29, Gaohe +68) * AACI investment first made in 2003; reserves included in Banpu reserves in 2004 ** Bharinto acquisition in 2004; reserves added in

55 Resources and Reserves concept EXPLORATION RESULTS COAL RESOURCES COAL RESERVES Increasing level of geological knowledge and confidence INFERRED: usually insufficient to allow appropriate application of technical/economic parameters or to enable a reliable evaluation of economic viability INDICATED: usually sufficient to allow the appropriate application of technical and economic parameters and to enable an evaluation of economic viability MEASURED: nature, quality, amount and distribution of data are such as to leave no reasonable doubt that the tonnage and quality of the coal can be estimated to within close limits INFERRED INDICATED MEASURED PROBABLE PROVED PROBABLE: the economically mineable part of an Indicated, and in some circumstances, a Measured Mineral Resource PROVED: represents the highest confidence category of material available to a company both technically and economically Consideration of mining, economic, marketing, legal, environmental, social and governmental factors (the modifying factors ) Source: Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves. The JORC Code, 2004 edition (effective December 2004) 55

56 Fundamental reporting principles * Transparency: information provided is sufficient, clear and unambiguous Materiality: all information which would reasonably be required by investors and their advisors to make reasonable and balanced judgements Competence: estimates provided are based on the work of a suitably qualified, experienced and competent person * The JORC Code,

57 Tariffs: agreed annually subject to government approval Power tariff (RMB/kWh*) Plant Steam tariff (RMB/t*) Luannan Zhengding Zouping Including 17% VAT for power, 13% VAT for steam 57