James Moutafis SVP Coal Business Development Creating a World Class Supply Chain to Unlock the Galilee Basin 12 th November, 2012 Creating a World Class Supply Chain to Unlock the Galilee Basin 12 November 2012 James Moutafis SVP Coal Business Development
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Creating a world class supply chain to unlock the Galilee Basin
James Moutafis, SVP Coal Business Development, QR National delivered this presentation at the Galilee Basin Coal & Energy Conference 2012. This two day event looks at the significant proposed investment in the Galilee area including coal mining, underground coal gasification, coal seam gas, geothermal, shale and much more, bringing together the wide variety of explorers, project developers, service providers and government representatives under the one roof. For more information about the annual industry gathering in Brisbane/Australia please visit the conference website: http://bit.ly/1fvyzHz
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James Moutafis SVP Coal Business Development
Creating a World Class Supply Chain to Unlock the Galilee Basin
12th November, 2012
Creating a World Class Supply Chain to Unlock the Galilee Basin
12 November 2012
James Moutafis
SVP Coal Business Development
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No Reliance on this Presentation
This Presentation was prepared by QR National Limited (ACN 146 335 622) (referred to as “QR National” which includes
its related bodies corporate). Whilst QR National has endeavoured to ensure the accuracy of the information contained
in this Presentation at the date of publication, it may contain information that has not been independently verified.
QR National makes no representation or warranty as to the accuracy, completeness or reliability of any of the information
contained in this Presentation.
Presentation is a summary only
This Presentation contains information in a summary form only and does not purport to be complete and is qualified in its
entirety by, and should be read in conjunction with, QR National’s 2012 financial report. Any information or opinions
expressed in this Presentation are subject to change without notice. QR National is not under any obligation to update or
keep current the information contained in this Presentation.
Forward-looking statements
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based on the current beliefs, assumptions, expectations, estimates and projections of QR National. These statements are
not guarantees or predictions of future performance, and involve both known and unknown risks, uncertainties and other
factors, many of which are beyond QR National’s control. As a result, actual results or developments may differ materially
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Disclaimer
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Coal’s increase in its dominant share of the world’s energy future is driven by urbanisation trends in China and India
Source: United Nations Department of Economic and Social Affairs, IEA WEO 2011, World Bank 2012
Urbanised population Billions of people
2010 (a) 1990 (a)
2.5
5.0
4.5
4.0
2.0
1.5
1.0
0.5
0.0
3.5
+30%
Rest of
World
China
India
2025 (f)
3.0
4.1%
1.9%
1.9%
2.8%
3.0%
CAGR
2009-2030
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
21%
16%
13%
8%
2.8%
Coal
Gas
Hydro
Nuclear
Other
42%
2030 (f)
43%
22%
14%
11%
11%
21%
15%
12%
10%
2009 (a) 2020 (f)
41%
Global electricity generation TWh
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Australian miners are pursuing cost savings and productivity improvements to regain competitiveness
Source: ABS, CSLS, Minerals Council of Australia, MCA PJP “Opportunity at Risk”, Sept 2012, QRC 31 May 2012.
Australian Mining Productivity vs Industry
Appreciating Australian Dollar
Increased labour, energy and transport costs
Rising capital costs
Development approval delays
e.g. 18 months in 2005 to 3 years currently
Multifactor productivity index (index, 1997 = 100)
2004 2002 2000 2010 1996
100
Australia
Canada
80
100
90
110
120
70
140
130
2012
0
2006 2008 1998
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*Indicative map only – not to scale
Some of the Galilee Challenges
Alpha Mine (GVK Hancock)
Carmichael Mine
(Adani)
Degulla Mine (Vale)
China Stone Mine
(MacMines)
China First Mine (Waratah)
Kevin’s Corner Mine (GVK)
South Galilee Project Mine
(AMCI Bandanna)
• Rapid volume ramp-up to lower unit costs
• Infrastructure cost which supports
development
Delivery of new port capacity, ie
Dudgeon Point progressing, revised
Abbot Point process imminent
300-500km of rail from mine to port, eg
terrain, hydrology and ground conditions,
landowners, environmental issues
Other services e.g. water, electricity,
roads
• Logistics of remote locations
• Large upfront capital investment in
challenging capital market conditions
The Galilee Opportunity*
The challenges facing the development of the Galilee Basin are well recognised
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180km of new rail
construction
Upgrades to 220km of existing rail
Additional passing loops and
duplications
Level crossing
upgrades
Signalling and communication
upgrades
Technological innovations for
rollingstock and facility
optimisation
~2,500 jobs throughout construction
~750 operational jobs
Alpha Mine (GVK Hancock)
Carmichael Mine
(Adani)
Degulla Mine (Vale)
China Stone Mine
(MacMines)
China First Mine (Waratah)
Kevin’s Corner Mine (GVK)
South Galilee Project Mine
(AMCI Bandanna)
Indicative map only – not to scale
Central Queensland Galilee Rail Project (CQIRP)
QR National’s solution for unlocking the Galilee Basin
When compared to greenfield standard gauge rail, CQIRP reduces upfront capital expenditures by >$1bn and provides flexibility in matching below rail capacity to mine ramp-ups
CQIRP reduces upfront capital
expenditures by an estimated
>$1bn
CQIRP matches below rail
capacity to eventual mine
ramp-up tonnages through
staged investments in the
brownfield network
This will ease the
financing requirements
of Galilee Basin projects and
reduce investment risk
Ability to stage investment to
match mine ramp-up volumes
Below Rail Capital Expenditure Comparison for the
Galilee Basin
Source: QR National Team Analysis
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CQIRP will provide Galilee Basin projects a lower unit cost across a range of production ramp-ups and peak tonnages