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Growth Vedanta Resources Ltd Channelling growth Vedanta Resources Ltd. opportunities O I L & G A S | Z I N C & S I L V E R | A L U M I N I U M | P O W E R | I R O N O R E | S T E E L | C O P P E R 12 March 2019 Cautionary Statement and Disclaimer The views expressed here may contain information derived from statement involves risk and uncertainties, and that, although we publicly available sources that have not been independently verified. believe that the assumption on which our forward-looking statements are based are reasonable, any of those assumptions No representation or warranty is made as to the accuracy, could prove to be inaccurate and, as a result, the forward-looking completeness, reasonableness or reliability of this information. Any statement based on those assumptions could be materially forward looking information in this presentation including, without incorrect. limitation, any tables, charts and/or graphs, has been prepared on the basis of a number of assumptions which may prove to be This presentation is not intended, and does not, constitute or form incorrect. This presentation should not be relied upon as a part of any offer, invitation or the solicitation of an offer to recommendation or forecast by Vedanta Resources Limited and purchase, otherwise acquire, subscribe for, sell or otherwise dispose Vedanta Limited and any of their subsidiaries. Past performance of of, any securities in Vedanta Resources Limited and Vedanta Limited Vedanta Resources Limited and Vedanta Limited and any of their and any of their subsidiaries or undertakings or any other invitation subsidiaries cannot be relied upon as a guide to future performance. or inducement to engage in investment activities, nor shall this presentation (or any part of it) nor the fact of its distribution form This presentation contains 'forward-looking statements' – that is, the basis of, or be relied on in connection with, any contract or statements related to future, not past, events. In this context, investment decision. forward-looking statements often address our expected future business and financial performance, and often contain words such as 'expects,' 'anticipates,' 'intends,' 'plans,' 'believes,' 'seeks,' or 'will.' Forward–looking statements by their nature address matters that are, to different degrees, uncertain. For us, uncertainties arise from the behaviour of financial and metals markets including the London Metal Exchange, fluctuations in interest and or exchange rates and metal prices; from future integration of acquired businesses; and from numerous other matters of national, regional and global scale, including those of a environmental, climatic, natural, political, economic, business, competitive or regulatory nature. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements. We caution you that reliance on any forward-looking 2 Company Overview 3 Vedanta - A World-Class Natural Resources Powerhouse Overview Group Structure • World’s 6th largest diversified resources company and the largest in India Vedanta • Portfolio of large, diversified, structurally low-cost assets geared towards base metals Resources Vedanta and oil Plc Resources Ltd Divisions of Vedanta Limited • Part of India’s premier index – the Nifty 50 and also listed in NYSE (ADR) ⚫ Sesa Iron Ore • Vedanta ranked 15th by the Dow Jones Sustainability Index globally; Hindustan Zinc ranked 3rd in the Environment category and 11th overall in the Mining and Metal ⚫ Sterlite Copper industry 50.1% 79.4% Vedanta ⚫ Power (600 MW • c. $18m invested in social initiatives benefitting c. 2.2mn people Ltd. Jharsuguda) Konkola Copper Vedanta Ltd ⚫ Aluminium • Key Financials Mines (KCM) (Odisha aluminium and – 9 months EBITDA of $2.5 bn at margin of 28%(1) power assets) – Q3 EBITDA of $ 0.8 bn at margin of 28% (1) ⚫ Cairn Oil & Gas* – Net Debt @ US $ 11.9 bn – ROCE @14% 3% Zinc -1% 2% O&G 6% 64.9% 51% 100% 100% 90% Aluminium HZL BALCO 10% 44% Power Zinc Copper Bharat International Talwandi 9 months Zinc India Electrosteels EBITDA EBITDA MIX Aluminium (Skorpion - Sabo Power Iron Ore (HZL) Steel limited (BALCO) 100% (1,980 MW) Others BMM-74%) 32% Note: Shareholding as on Jan 30, 2019 Note: (1) Excludes custom smelting at Copper and Zinc India operations *50% of the share in the RJ Block is held by a subsidiary of Listed entities Unlisted entities Vedanta Ltd 4 Vedanta growth trajectory – Focus on growth projects FY2012 FY Color Key 2013- ✓ Acq Cairn India Organic 18 Inorganic ✓ Cmd 100kt Dariba Pb smelter FY 2012 √ Cmd 1,980MW TSPL FY2010 ✓ Exp 274MW wind power √ Exp 1.2 mt zinc ✓ Acq VS Dempo FY 2011 √ Cmd 250kt Gamsberg ✓ Cmd 210kt Zn smelter ✓ 300kbpoed Oil projects ✓ Exp RA mine to 6mt ✓ Acq Zinc Intl FY ✓ Cmd 1250kt VAL smelter 2010 ✓ Cmd 1.5mt mill FY2009 at SK mine ✓ Exp Karnataka IO ✓ Exp RA mine to 5mt ✓ Cmd 2,400 MW ✓ Acq ESL ✓ Cmd 311kt Nchanga FY JHA smelter, 6mt Konkola 2009 Concentrator Pre-IPO FY2007 ✓ Cmd500kt VAL smelter FY ✓ 1997: Tuticorin ✓ Acq Sesa Goa 2008 Smelter ✓ Cmd 245kt Al smelter and ✓ 1999: Acq 540 MW CPP at BALCO ✓ Cmd 170kt Zn FY Australia Cu smelter and 80MW ✓ Dbn Tuticorin smelter to 2007 mines CPP at Chanderiya 400kt ✓ 2001 – Acq FY 2006 BALCO ✓ 2002- Acq HZL FY ✓ 170kt Zn and 2005 50kt Pb smelter, Well invested and consolidated assets : driving growth FY 154MW CPP Pre- 2004 ✓ Acq KCM IPO ✓ Exp Tuticorin Vedanta IPO smelter 5 Delivering on our Strategic Priorities Optimise Capital Augment our Operational Allocation & Maintain Reserves & Excellence Strong Balance Sheet Delivering on Resources base • Volume growth and Preserve our License • Improving cash flows Growth • Well developed to Operate Opportunities asset optimisation • Strict Capital exploration programs • Optimise costs • Operate as a discipline • Develop brownfield • Zinc India R&R of • Adopt digitalisation responsible business ‒ Invest in high IRR growth opportunities 411mt with 25+ years and technology • Continue to focus on projects • Acquisition of of mine life solutions Zero Harm, Zero ‒ Deleveraging the attractive, • Karnataka iron-ore balance sheet • Improved realisations Discharge and Zero complementary R&R of 100mt with Wastage assets, but only for 20 years of mine life • Reduce working value capital • Ensure social • Focus on greenfield inclusion of the and brownfield community to exploration promote inclusive growth 6 Large & diversified asset base with an attractive commodity mix 9 months production Key Highlights Zinc Zn – 522kt ✓ Second largest integrated zinc-lead producer globally; major silver producer Pb – 145kt India Ag – 488kt ✓ Rampura Agucha – second largest zinc mine globally ✓ Gamsberg Mine opened recently with one of the largest zinc deposits in the Zinc 1 91kt world Intl. ✓ Reserve & Resources of +214mt and LOM of +30 yrs ✓ India’s largest private-sector crude oil producer with c.25% market share 2 ✓ One of the lowest cost producers in the world (cost at c.$7.5/boe) Oil & Gas 189 kboepd ✓ Investing $3.2 bn to monetize 400 mn barrels of reserves ✓ Secured 41 blocks in OALP and 2 blocks in DSF II ✓ Largest aluminum capacity in India at 2.3mtpa, with captive power and an 1.5mt Aluminium alumina refinery Copper ✓ One of the largest copper producers in India Annual Cap: 400 kt India ✓ Currently shut as per Government Order 2.4mt Iron ore & ✓ Largest Indian private-sector iron ore exporter Steel 0.8 mt ✓ Acquired ESL for an integrated iron ore and steel business ✓ One of India’s largest power generators, with 3.6 GW of commercial power Power 9,995MU generation capacity, balance for captive usage ✓ Poised to benefit from structural power shortage in India Note: (1)Refined zinc from Skorpion of 45kt and mined metal from BMM of 46kt; (2) Average Daily Gross Operated Production 7 Q3 Performance 8 Q3 FY2019: Business Highlights Zinc India Zinc International O&G Aluminium Refined Zn-Pb: 242kt BMM: 18kt Aluminium: 502 kt Production Gross average: 187 kboepd Silver: 178kt Skorpion: 20kt Alumina: 404 kt Costs CoP ex. royalty: $997/t CoP: $1,757/t RJ blended: $7.9/bbl CoP: $2,025/t EBITDA $ 395 mn $ 29 mn $ 273 mn $ 34 mn (%) 52% 34 % 59% 3% • Record silver production and MIC Skorpion: 20kt higher 36% q-o-q on • 8 development rigs at site; Well drilling • Record alumina production and production from U/G mines account of higher grades ~8.5% and and hook up being ramped up sequential reduction in Alumina cost • SK new mill 1.5 Mtpa ramp up from Pit 112. • Gas production to increase by ~ 90 • Continued bauxite delivery from OMC mmscfd (eq. 15 kboepd) in March 2019 rd commissioned and produced first BMM: 18kt higher 31% q-o-q on to meet 1/3 of the years requirement concentrate account of higher grades • Liquid handling capacity at MPT being • Structural reduction in COP with upgraded by > 30% to handle increased coal linkage and increased • CoP at $997/t lower 4% qoq Gamsberg project: Plant incremental volumes captive Alumina commissioning and ramp up underway Key developments • Vendor meet held in Houston to unlock the potential of OALP blocks 9 Q3 FY2019: Business Highlights (cont’d) Power Iron Ore and Steel Copper India Copper Zambia Iron Ore Electrosteel Power sales: 3,165 MU Integrated: 24 kt Production Karnataka: 0.7mt ESL: 325kt Cathodes: 23kt TSPL availability: 81% Custom: 26 kt Costs TSPL margin: Re1.0/unit IOK CoS: $6.0/t EBITDA/t: $120/t CoP: Not operational currently CoP (ex royalty): 256c/lb EBITDA $ 50 mn $ 14 mn $35 mn $ (11) mn $ (3) mn % 23% 15% 21% -3% -1% • TSPL delivered 81% PAF in • Karnataka sales at 0.6mt; • Production:Q3 exit monthly • Favorable order from • Advocacy through Tax H1 FY19 muted e-auction sales run rate of c.1.5mtpa NGT.“Closure of plant against representation in progress principles of natural justice” • PLFs of BALCO and • Goa continues to be impacted • Production of 325kt in Q3 against the new custom by suspension of mining in the Jharsuguda impacted by up 14% q-o-q • Supreme Court recently set duties levied state coal shortages aside the judgement passed • Production majorly Key developments • Margin: by NGT.
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