India - Securing Coking Coal Supply Further development of domestic coking coal reserves can ease the situation somewhat Captive coal mining introduced in 1993 But there are significant hurdles in domestic captive coal block development Time consuming processes for environmental & forest clearances Problem of land acquisition Resettlement and Rehabilitation issues Joint allocation of mines Inadequate experience in mine development of the private players Slow progress in domestic market mine development has compelled steel and merchant coke producers to look overseas for coal assets
World Met Coke Market Met Coke demand is expected to rise by 150 to 200 MTPY in next 10 years going by growth projections in BRIC countries
WORLD MET COKE EXPORTS Though Chinese coke availability increased in 2010 over 2009, it is much below the requirement Most of the Chinese Coke went to Japan (approx 60%) Japanese export declined in 2010 Columbia - a new entrant exporting to Brazil & India India though is a major net importer, has been exporting to Brazil, Japan and SE Asian Countries
WORLD MET COKE IMPORTS Imports recorded a considerable increase in 2010 over 2009 Japan, USA, Germany and Brazil had impressive import demand indicating renewed buoyancy in the economy post recession However the import levels were much below the highs of 2008 Indian imports remained almost stable
MET COKE PRICES ON THE HIGH FOLLOWING THE TREND IN COKING COAL PRICING 800 Met Coke Price Movement (US$ / tonne) 700 600 500 400 300 200
Scenario Evolving Met Coke Globally 40% export tax levied by China since August 2008 - production of coke for a surplus for export is discouraged With Chinese Coke away from the market, a likely shortage of coke from 2011 Difficult to meet the increasing demand supply gap Coke supply from other sources - e.g. Poland, Russia, Ukraine, Colombia, Japan - has little potential for increase in future. These sources are primarily in the western hemisphere, whereas demand is growing faster in the eastern hemisphere. Once coke trade returns to levels of around 30 MTPA (say by 2012), it is difficult to comprehend how other countries would meet the shortfall of China s 14 MTPA export capacity
The Indian Scenario India would continue to remain one of the largest markets for met coke Imports are primarily from Russia, Ukraine, Vietnam and recently Poland and Columbia Upward pressure in the market has already built up on increase of coking coal prices and its scarcity Prices rising Large merchant coke demand from pig iron, ferro alloys and soda ash would remain in future Expected addition of another 4 MTPA coke capacity by 2013 14 to cater to the : Increasing steel making capacity Export market by tapping the void created by China
INDIA AS A COKE EXPORTER Tapping The Huge Void - In 2007 Chinese export was 15 MT which got reduced to 12 MT in 2008 and in 2009 it stood at just over an ½ MT, recovering to just 3 MT in 2010 Why India? At first glance not a natural coke exporter due to: Poorer quality coking coals Strong domestic demand growth Traditional significant coke importer Limited deep water ports However, some advantages Rapidly growing merchant coke producer Adoption of quick to build non recovery, heat recovery ovens In between Atlantic and Pacific markets Has already sold coke to Brazil, Japan, SE Asian and European countries
SECTION B GUJARAT NRE COKE LIMITED
GUJARAT NRE COKE LIMITED - A SNAPSHOT Largest independent producer of Metallurgical Coke in India Listed on the Bombay and National Stock Exchanges, with a market capitalisation of around USD 0.65 billion (No. of shareholders 1,80,000) Profit earning and dividend paying with strong financials and credit rating of AA- for long term borrowing and PR1+ for short term borrowing. Met Coke capacity 1.434 million tons, being increased to 4 million tons by 2014/15. The only Indian Company to have exported LAMC from India (to Argentina, Brazil, South Africa & Europe). Strong focus on the Environment with ISO 14001:2004 & OHSAS 18001:1999 certification Rated one of the top 10 company by 10-years profit performance in the latest edition issued by Business Today on India s Most Valuable Companies
GNCL OPERATIONS HARD COKING COAL (NSW, AUSTRALIA) RESERVES 125 MMT RESOURCES 651 MMT Waste Heat Recovery Power Plants Khambhalia* Bhachau* Dharwad* Total Wind Power 15 MW 15 MW 30 MW 60 MW 87.5 MW LOW ASH METALLURGICAL COKE 1.434 MMTPA KHAMBALIA UNIT 0.358 MILLION MTPA Gujarat NRE Coking Coal Limited (ASX: GNM) Reserves(Resources) STEEL UNIT TMT BARS : 0.311 MMTPA NRE NO. 1 92 (314) million tonnes NRE Wongawilli 33 (337) million tonnes Coal Washeries (MTPA) Khambhalia 0.75 Bhachau 0.75 Dharwad 0.90 In Australia * Under implementation In India BHACHAU UNIT 0.324 MILLION MTPA DHARWAD UNIT 0.248 MILLION MTPA (Leased) AT DHARWAD 0. 324 MILLION MTPA AT BHACHAU 0. 180 MILLION MTPA
BOARD OF DIRECTORS The main promoter of GNCL. Has more than five decades of business experience Mr. Girdharilal Jagatramka Chairman Emeritus Arun Kumar Jagatramka Chairman & Managing Director 25 years of professional and management experience All India 1st rank gold medalist Chartered Accountant Director of Pike River, Port Kembla Coal Terminal, NSW Mineral Council and Australian Coal Research Association Appointed as an honorary NSW Sydney Ambassador to India 10 years of experience in management and administration Active in the management & human resources for Gujarat NRE Group Also on the board of Gujarat NRE Coking Coal Limited Mrs. Mona Jagatramka Non-Executive Director Leading medical practioner Past District Governor of Lions Club International Dr. Mahendra Kumar Loyalka Non-Executive Director
BOARD OF DIRECTORS (contd..) Mr. Chinubhai R Shah Non-Executive Director Former President of ICSI At present on the Board of Nirma Ltd., Adani Power Ltd., Cadila Pharmaceuticals Ltd., Apollo Hospitals International Ltd., Gujarat State Electricity Corpn. Ltd., etc. Also the Chairman of India Renal Foundation. Former CMD of IIBI Former Executive Director of UTI Mutual Fund. Holds directorship of various reputed Listed Companies viz. ITC Ltd., South Asian Petrochem Ltd., etc. Dr. Basudeb Sen Non-Executive Director Former CMD of Kudermukh Iron Ore Company Ltd. Presently on the Board of Coal India Ltd. Mr. Murari Sananguly Non-Executive Director Mr. Subodh Kumar Agrawal Non-Executive Director Eminent Chartered Accountant Presently Member of Central Council of ICAI. Chairman, Committee for members in Industry (ICAI)
SHAREHOLDING PATTERN 45.93% Sl. No. Particulars % of Holding 22.46% 1 Promoter Group 45.93 2 Banks, Mutual Funds & FIIs 31.61 31.61% 3 Indian Public and others 22.46 Total 100.00 Promoter Group Banks, Mutual Funds & FIIs Indian Public & Others Listed on BSE & NSE Script Code: For Ordinary Equity Shares: BSE 512579 ; NSE - GUJNRECOKE ISIN no. - INE110D01013 For B Equity Shares (DVR Shares) : BSE 570003; NSE - GUJNREDVR ISIN no. - IN9110D01011 Face Value : Rs. 10 per share Market Capitalization: Approx USD 0.65 Billion
GUJARAT NRE COKE LTD India s largest independent producer of Metallurgical Coke Total Capacity of 1.434 million tonnes per annum
Unparallel Creator of Wealth Generator of Employment Over 100% compounded annual return delivered to an investor
Rs. In Crores PERFORMANCE OF LAST 5 FINANCIAL YEARS 1800 1600 1400 1200 1000 800 600 400 200 0 Year Ended 31.03.2007 Year Ended 31.03.2008 Year Ended 31.03.2009 Year Ended 31.03.2010 Year Ended 31.03.2011 (Unaudited) Turnover EBITA
GNCL PAT over last 10 Qtrs Dec 08 to Mar 11 PAT (in Rs Cr) 60 40 20 0-20 Dec 08 Mar 09 Jun 09 Sept 09 Dec 09 Mar 10 Jun 10 Sept 10 Dec 10 Mar 11-40 -60-80 -100-120
Cumulative 4 Years PAT 500 450 400 350 300 250 200 150 100 50 0 255.81 31st March 2007 PAT (in Rs Crores) 31st March 2008 384.77 387.97 385.39 430.47 31st March 2009 31st March 2010 31st March 2011
42 SECTION C GUJARAT NRE COKING COAL LIMITED
GUJARAT NRE COKING COAL LTD OVERVIEW ASX listed hard coking coal producer» Market capitalization of ~A$0.66 billion 100% owner of two underground mines in NSW, Australia» NRE No. 1 & NRE Wongawilli JORC reserves of 125 Mt and resources of 651Mt Majority of ROM coal sold under contract to major shareholder (Gujarat NRE Coke)» Commercial terms based on market formula Targeting to increase ROM production to 6.0Mtpa over the next 4 years Berrima Sutton Forest proposal Xstrata Tahmoor Southern Coalfield NRE WONGAWILLI W. Tahmoor Appin Westcliff Dendrobium Northcliff Wollongong Kiama Peabody Metropolitan BHP Illawarra Coal NRE No. 1 Port Kembla Port Kembla coal loader 18 Mtpa
OWNERSHIP & CAPITAL STRUCTURE Capital structure Key shareholders As at 18 th May 2011 LTM share price performance Source: Yahoo Finance