Steve Thomas – Riversdale Mining Limited South African Anthracite Exports: The Way Forward Coaltrans - World Coke & Anthracite Conference Krakow Poland For personal use only
Steve Thomas – Riversdale Mining Limited
South African Anthracite Exports:The Way Forward
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Ri d l Mi i S th Af i A th it E tRiversdale Mining – South African Anthracite Exports:The Way Forward
Steve Thomas, CFO Riversdale Holdings (Pty) Ltd Coaltrans – World Coke & Anthracite Conference Krakow Poland March
Disclaimer: The information in this document is provided for information purposes only by Riversdale Mining Limited. 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 Riversdale Mining Limited.
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World Coke & Anthracite Summit
The South African Anthracite Market:a. Overview of the market size and product distribution
Hi tHistory
Current performance
b. Producer location
c. Port facilities available for export
d. Challenges facing producers with exporting
e. Typical qualitiese. Typical qualities
Products
Unsized
Si dSized
f. Contact details
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SOUTH AFRICA –ANTHRACITE SALES TONNES PER CALENDAR YEAR
5,000,000
5,500,000
(DME DATA; EXCEPT FOR 2007 AND 2008: CAMR)
Total Sales Inland Sales Export Sales
4,000,000
4,500,000
2,500,000
3,000,000
3,500,000
Tonn
es
1,500,000
2,000,000
0
500,000
1,000,000
01980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Year
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SOUTH AFRICAN ANTHRACITE SALES - MARKETS
1, 201, 624mt43%
1,058,310mt38%
Local Sales (S.A. Markets)
Exports (Sized)
509, 399mt18%
Exports (Unsized)
2008 CALENDAR YEAR (METRIC TONNES)
Local Sales: 1, 201, 624mt
T l S l 2 769 333
Exports (Sized): 509, 399mtExports (Unsized): 1, 058, 310mt
Total Sales: 2, 769, 333mtFigures courtesy of Resource - net (Andrew Jones)
Exports Total: 1, 567, 709mt
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SOUTH AFRICAN ANTHRACITE PRODUCER LOCATIONS
Producers
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PORT FACILITES RICHARDS BAY COAL TERMINAL
World’s largest single coal export terminalWorld s largest single coal export terminalCurrent design capacity of 76 million tonsCoal railed from approximately 49 minesMines are approximately 650 to 850 km from Richards Bay200 truck trains carrying approximately 16 500 mt coal200 truck trains carrying approximately 16,500 mt coalPhase 5 to be completed mid 2009, will increase the design capacity 91 million tons.
DRY BULK COAL TERMINALAlso in Richards Bays opposite RBCTAlso in Richards Bays, opposite RBCTGeneral Cargo Terminal, including coal and anthraciteOne alternative to the RBCT for exporters who do not have RBCT entitlementFor un‐sized products onlyFar more expensive than RBCT but does provide an alternativeFar more expensive than RBCT, but does provide an alternativeUsed successfully by some Junior Producers.
BULK CONNECTIONS TERMINAL (BCT) DURBAN PORTPrivately owned terminal – Bidvest GroupPrivately owned terminal – Bidvest GroupOnly soft loading facility in South AfricaGeared primarily to load “size sensitive” coal & anthracite2008 – Total throughput of 1, 989, 075 metric tons2008 – Total anthracite exports of 394 579 metric tons2008 – Total anthracite exports of 394, 579 metric tonsMax draft of 10.3 metres
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DUFF 1 10
TYPICAL PRODUCTS AND MARKETING
LARGE NUTS 45 X 70 DUFF 1 x 10
PEAS 8 X 25
NUTS 20 X 45 MIDDLINGS 0 X 10
PRODUCTS
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SOUTH AFRICAN ANTHRACITE PRODUCERS –TYPICAL QUALITIES
BASIC
ANTHRACITE PRODUCERS – QUALITIES – EXPORT UNSIZED
ELEMENTS No 1 No 2 No 3 No 4
ASH (%) < 17 < 18 < 15,5 < 16
VOLATILES (%) 6‐9 7‐8 5‐6 7‐8( )
FIXED CARBON (%) > 72 > 73 > 80 >75
SULPHUR (%) < 1,80 < 0,85 < 1,28 < 0,9
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* DRY BASIS
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SOUTH AFRICAN ANTHRACITE PRODUCERS –TYPICAL QUALITIES
BASIC
ANTHRACITE PRODUCERS – QUALITIES – EXPORT SIZED
ELEMENTS No 1 No 2 No 3 No 4
( )ASH (%) < 14 < 17 < 10,9 < 15
VOLATILES (%) 6‐9 7‐8 5‐6 7‐8
FIXED CARBON (%) > 77 > 75 > 84 >76
SULPHUR (%) 1,55 – 2,00 < 0,85 < 1,1 < 0,85
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* DRY BASIS
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WHY BUY SOUTH AFRICAN ANTHRACITE?
Long established reputable producers
lQuality consistency
Limited product contamination
(especially when compared to some other producing countries)( p y p p g )
World class soft loading facility in the BCT at Durban
Can load all year round, no seasonal interferences
and the most compelling reason is …
Very pleasant people to deal with, who always honour contracts.
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CONTACT DETAILS
Riversdale Holdings
Steve Thomas Email: [email protected] Cell: +27 82 451 6980
Zululand Anthracite Colliery (ZAC)
Andrew Rayment Email: andrew@icacoal co za Cell: +27 82 499 4074Andrew Rayment Email: [email protected] Cell: +27 82 499 4074
Somkhele
Henrique Pinheiro Email: [email protected] Cell: +27 82 892 9331
Springlake Colliery
Henrique Pinheiro Email: [email protected] Cell: +27 82 892 9331
Vaalkrantz Colliery (LeeuwMining)Vaalkrantz Colliery (LeeuwMining)
John Beck Email: [email protected] Cell: +27 82 323 0000
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World Coke & Anthracite Summit
Riversdale Mining Limited:a. Company profileb Statistics Zululand Anthracite Collieryb. Statistics Zululand Anthracite Collieryc. Mozambique
StatisticsNext major coking coal basinj gLocality map - Area and picturesKey elements to successQualitiesFreight competitivenessTrack recordCountries growth
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RIVERSDALE MINING LIMITED - CORPORATE PROFILE
15.3%
2.3%
Market Cap@ $3.04 per share
A$572.7 million
40.3%Shares 188.4 million
Options 20.1 million
24.4%Net Cash ~ A$ 325 million
As of 10/Mar/2009
3.0%12.7%
2.0%
Australian Institutions
UK Institutions
Passport Capital 15.62%
Talbot Group 18 87%North American Institutions
Other Institutional
Corporates
Related Parties (predominantly management)
Talbot Group 18.87%
Tata Steel Ltd 10%
~ 60% institutional ownership
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Private InvestorsSource: Thomson Reuters
As of 30/Jan/2009
As of 31/Dec/2008For
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ZULULAND ANTHRACITE COLLIERY (ZAC) – A SNAPSHOT
P d tiProduction850-900 kt ROM
650-700 kt saleable
Reserves / Resources
MINERAL RESOURCES & RESERVES – ZAC
Resource Category
Gross in Situ Tonnes (Mt)
Reserve Category
ROM Tonnes (Mt)
Measured indicatedI f d
11.218.7
Proved Probable
5.310.2
17 yr LOM
Significant expansion potential (Ngwabe block)
Anthracite market
Inferred 23.7
Total 53.6 Total 15.5
Demand driven by the metal refining industry
Relatively inelastic – no price-competitive substitutes
Constrained supply from major producers (Vietnam, Russia)
ZAC infrastructureZAC infrastructureExcellent infrastructure
US$43m expansion development
Spare capacity
ZAC locationSituated along the Richards Bay coal line (RBCT export port)
Close to major markets (chrome, electrode paste & mineral sands)
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MOZAMBIQUE: A WORLD CLASS COKING COAL OPPORTUNITY
2.1 Billion tonne Coal Resource
A$235 M capital raising completed
TATA A$100 M S i j i
Achievements
TATA: A$100 M + Strategic joint venture partner
Acquired tenements (>53,000 ha) in August 2007
Quality: premium hard coking coal and thermal coal
20Mt/a coal Mining Study lodged with government
Rail, Port & Power MOU’s
Appointment of International Advisory Board
Huge exploration potential >250,000 ha
Prime position in the Moatize basin
Potential Major multi pit operation
Sea freight advantages into India, Brazil & Europe
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Strong financials: > AUD 340M cash available to develop share of project
TATA Steel JV to support future development & regional growth
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MOATIZE: THE NEXT MAJOR COKING COAL BASIN
The largest undeveloped coking coal region in the world?RIV: largest holding in the Moatize basinRIV: largest holding in the Moatize basin
Benga: 2.1 Billion tonne Coal Resource
1.0 Bt Measured & Indicated
1.1 Bt Inferred
Drilling on 21 additional licenses throughout 2009Drilling on 21 additional licenses throughout 2009
Premium hard coking and thermal coalsCompetitive freight rates into high growth markets in India and BrazilIndia and Brazil
Potential to access European coking coal market
The experience to maximise the opportunitySouthern African experience: ZAC mine RSASouthern African experience: ZAC mine, RSA
Tata Steel JV partner
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RIVERSDALE CAMP NEAR TETE
Riversdale Camp near Tete
Aerial view of Tete
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COAL SAMPLES IN MOZAMBIQUE
Coal Core, April 2008
Large Diameter Coal Core
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COAL OUTCROP IN MOZAMBIQUE
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BENGA EXPLORATION SITE
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THE KEY ELEMENTS FOR SUCCESS
2 1 Billi t I f d R (JORC)2.1 Billion tonne Inferred Resource (JORC)
1 Billion tonnes of Measured and Indicated Resources
Likely to be amenable to open cut mining
Quality indicative of hard coking and thermal coal products
Rail development to be completed by 2H 2009Rail MOU for 6 Mt signed
Consortium developing rail (CFM, Rites and Ircon)
Development of the Beira portPort MOU signed
Government has announced $500 M plans for development
Small existing capacity
Power station projectGovernment approval to start feasibility study
500 MW to be commissioned in 2012
Building to 2000 MW by 2015 in 500 MW units
Joint venture with TATA Steel
21
2010 hard coking coal production and export
Next target: One of the worlds major coking coal producersCoaltrans - World Coke & Anthracite Conference Krakow Poland
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BENGA COAL QUALITIES
Benga Hard Coking Coal # Benga Export Thermal #
Volatile Matter (%, ad) 21.8
Ro Max 1.4
CV GAD (kcal, kg) 6390
Ash (%, ad) * 22
CSN (swell index) 8.5
Vitrinite % 81
Moisture (%, ad) 0.8
Volatile Matter (%, ad) 20
Ash (%, ad) * 10.5
Gieseler max fluidity 2.4 (log)
HGI 80
Ash fusion (IDT, C) 1425
# Quality parameters are a weighted average of targeted seams across the Benga resource. Mine sequencing or selectivity has not been optimised
* Products based on target ash which may be subject to change based on economic/quality optimisation
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Products based on target ash which may be subject to change based on economic/quality optimisationFor
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Benga HCC – uniquely positioned qualities
Benga hard coking coals
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Schapiro & Gray ASTM Stability
prediction contours
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MOZAMBIQUE: FREIGHT A GROWING COMPETITIVE ADVANTAGE
Moatize coking coal will enjoy a competitive advantage into 46% of seaborne trade of hard coking coal
Supply of seaborne hard coking coal
(136 millions tonnes p.a.)
Competitive advantage into 46% of seaborne trade of hard coking coal
Elk ValleyMet. Coal - Yearly Demand Growth
40
Mt
India & Brazil to account for 49% of demand growth*
46%Japan
EUBHPB /
Mitsubishi
Elk Valley
USA
Other Canada
33%16%
14%25
30
35
40
Brazil
India
India
Taiwan
South Korea
Other
Brazil
Anglo / MitsuiPoland, China,
Russia, NZ
USA
8%7%6%7%
14%
7%5
10
15
20 China
Rest of World
TaiwanChinaOther
Europe
Australia
Canada
USA
XstrataRio Tinto
Other Aus0
2008-2011
* Demand growth of seaborne hard coking coal
24
Source: Barlow Jonker, McCloskey and AME
USAOther
coking coal
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MOZAMBIQUE: A TRACK RECORD OF SUCCESSFUL RESOURCE DEVELOPMENT
Mozal – Aluminium Smelter
506 kt pa aluminium smelter
Established in 1998 by BHP Billiton, Mitsubishi & IDCEstablished in 1998 by BHP Billiton, Mitsubishi & IDC
US$ 2 B investment
Completed 13 months early and US$ 295 M under budget
Sasol – Gas Pipeline & Exploration
120 million GJ pa pipeline
865 km pipeline completed in 2004
US$ 1.2 B investment
Two producing gas fields and active exploration
Moma – Titanium sands mine (Kenmare)
700 kt pa ilmenite project, developed by Kenmare
US$ 500 M investment
25
Entered production in 2007
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MOZAMBIQUE: A COUNTRY EXPERIENCING STRONG GROWTH
Over 8% real GDP average growth over the last decade1
Consistently higher than Africa & equivalent to emerging economies
Real GDP Growth
6
7
8
9%
y g q g g
Mega project sectors of Aluminium, Gas, Electricity and Mining
driving growth
Industry and manufacturing make up 45% of GDP (Agriculture 22%)1
2
3
4
5
MozambiqueEmerging economiesAfricaWorld
Tight monetary policies have helped to ease inflation
Mozambique’s growth fuelled by strong investment
02002 2003 2004 2005 2006 2007
US$ 7.5 Bn in projects approved in 2007
Consortium investment in Sena rail line (US$370 M) and Beira port
US$ 1.8 bn p.a. in development assistance invested in Mozambique in
05 & 06 and projected to remain at this level until 2010 at least05 & 06 and projected to remain at this level until 2010 at least
26
1 IMF World Economic Outlook, 2006
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Benga Coal Resources
COMPETENT PERSON REPORTS
Benga Coal Resources
The Benga Coal Resources quoted in this announcement are based on Report No 269/01/02, Coal Resources, Benga Project as at 15thAugust 2008, compiled under the supervision of Mr. Kerry Whitby, who is a Fellow of the Australasian Institute of Mining andMetallurgy and Managing Director of McElroy Bryan Geological Services Pty Ltd (MBGS). Kerry Whitby has more than 30 yearsexperience as a geologist in the resources industry and more than 20 years experience in the estimation of coal resources for coalprojects and coal mines both in Australia and overseas. This expertise has been acquired principally through exploration andprojects and coal mines both in Australia and overseas. This expertise has been acquired principally through exploration andevaluation assignments at operating coal mines and coal exploration areas in Australia’s major coal basins and in other coal basinsthroughout the world. With this level of experience, he is adequately qualified as a Competent Person as defined in the 2004 editionof the JORC Code. The Coal Resource estimate for the Benga Licence, (881L) Mozambique presented in this report has been carriedout in accordance with the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (September2004) prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute ofGeoscientists and Minerals Council of AustraliaGeoscientists and Minerals Council of Australia.
ZAC Coal Resources & Reserves
Information that relates to geology, drilling, mineralisation and Mineral Resources and Ore Reserves estimates for Zululand AnthraciteColliery (ZAC) is based on information compiled by J Liebenberg who is a member of South African Council for Natural ScientificColliery (ZAC) is based on information compiled by J Liebenberg, who is a member of South African Council for Natural ScientificProfessions. Mr Liebenberg has sufficient experience which is relevant to the style of mineralisation and type of deposit underconsideration and to the activity which he is undertaking to qualify as a Competent Person under the meaning of the JORC Code. MrLiebenberg, an employee of Zululand Anthracite Colliery (Pty) Limited has given his consent to the Public Reporting of thesestatements concerning geology, drilling and mineralisation in this format.
Benga Coal Quality
The coal quality information in this announcement has been compiled under the supervision and reviewed by Mr. Andrew Meyers,who is a Member of the Australasian Institute of Mining and Metallurgy and Director of A&B Mylec Metallurgical Consultants Pty Ltd.
Andrew Meyers has more than 19 years experience in coal processing and coal quality for coal projects and coal mines both iny y p p g q y p jAustralia and overseas. With this level of experience, he is adequately qualified as a Competent Person as defined in the 2004 editionof the JORC Code. Andrew Meyers consents to the inclusion in this announcement of the matters based on his information in theform and context in which it appears.
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Thank you
Any Questions?y Q
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