NMDC Limited Presentation
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NMDC Limited Presentation February 2010 Strictly Private and Confidential Disclaimer This Presentation is for information purposes only and does not constitute an offer, solicitation or advertisement with respect to the purchase or sale of any security of NMDC Limited (the "Company") and no part of it shall form the basis of, or be relied upon in connection with, any contract or commitment whatsoever. In particular, this Presentation does not constitute an offer for securities in the United States. No public offering of securities will be made in the United States and the Company's equity shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended. The Government of India is proposing, subject to receipt of requisite approvals, market conditions and other considerations, an offer for sale of the equity shares of the Company and the Company has filed Red Herring Prospectus with the Registrar of Companies, Andhra Pradesh at Hyderabad. The Red Herring Prospectus is available on the website of the SEBI at www.sebi.gov.in and on the websites of the Book Running Lead Managers. Any person who intends to acquire the Company's equity shares in the offer for sale by the Government of India must rely solely on the Red Herring Prospectus (if resident in India) which has been filed with the Registrar of Companies. Any potential investor should note that investment in equity shares involves a high degree of risk. For details, potential investors should refer to the Red Herring Prospectus, which has been filed with the Registrar of Companies. This document contains certain forward-looking statements relating to the business, financial performance, strategy and results of the Company and/or the industry in which it operates. Forward-looking statements are statements concerning future circumstances and results, and any other statements that are not historical facts, sometimes identified by the words "believes", "expects", "predicts", "intends", "projects", "plans", "estimates", "aims", "foresees", "anticipates", "targets", and similar expressions. The forward-looking statements, including those cited from third party sources, contained in this Presentation are based on numerous assumptions and are uncertain and subject to risks. A multitude of factors including, but not limited to, changes in demand, competition and technology, can cause actual events, performance or results to differ significantly from any anticipated development. Neither the Company nor its affiliates or advisors or representatives nor any of its or their parent or subsidiary undertakings or any such person's officers or employees guarantees that the assumptions underlying such forward-looking statements are free from errors nor does either accept any responsibility for the future accuracy of the forward-looking statements contained in this Presentation or the actual occurrence of the forecasted developments. Forward-looking statements speak only as of the date of this presentation. As a result, the Company expressly disclaims any obligation or undertaking to release any update or revisions to any forward-looking statements in this presentation as a result of any change in expectations or any change in events, conditions, assumptions or circumstances on which these forward- looking statements are based. No representation or warranty (express or implied) is made as to, and no reliance should be placed on, the accuracy, completeness or correctness of any information, including any projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein and, accordingly, none of the Company or its affiliates, its advisors or representatives or any of its or their parent or subsidiary undertakings or any such person's officers or employees accepts any liability (in negligence or otherwise) whatsoever arising directly or indirectly from the use of this document. This Presentation speaks as of its date. Neither the delivery of this Presentation nor any further discussions of the Company with any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since such date. 2 Presentation Outline A. Key Themes B. Corporate Social Responsibility Appendix A1. Board and Senior Management Appendix A2: Process to Acquire & Renew Mining Leases in India 3 A. Key Themes NMDC Limited: Key Themes 1 Established 8 Sustained corporate financial and performance * operating 2 history Largest Strong in- producer of house iron ore in technical India by capabilities 7 volume 3 Access to Focused abundant expansion high quality plans iron ore reserves Strong Low-cost 6 domestic and producer of global demand iron ore potential 4 5 * All financial numbers in this presentation are based on restated consolidated audited accounts unless indicated otherwise 5 NMDC Limited: Key Themes 1 Established 8 Sustained corporate financial and performance * operating 2 history Largest Strong in- producer of house iron ore in technical India by capabilities 7 volume 3 Access to Focused abundant expansion high quality plans iron ore reserves Strong Low-cost 6 domestic and producer of global demand iron ore potential 4 5 * All financial numbers in this presentation are based on restated consolidated audited accounts unless indicated otherwise 6 NMDC Limited: A pioneer in the Indian mining industry A pioneer in the Indian mining industry - established in 1958 and has the objective of exploring and exploiting minerals and manufacturing and selling products obtained therefrom NMDC has reserves and resources of 1,360.6* million metric tonnes of iron ore with predominantly greater than 64% Fe content and has been the largest producer by volume in India during the last three fiscal years** – the Company’s producing mines are open cast and primarily fully mechanised Strong in-house capability to undertake exploration – NMDC is actively involved in exploration and development activities so as to apply for and acquire new iron ore and other mineral leases thereby expanding its reserves and diversifying its production The research and development center, established in 1970, has competence in undertaking technology development projects in the field of ore beneficiation and mineral processing e.g. to convert waste material into products of commercial value In addition, NMDC operates one of the largest diamond mines in Asia with the authorisation to produce 100,000 carats of gem and industrial diamonds per annum Conferred the “Navratna” status in 2008, which allows among other things greater financial autonomy to the Board of Directors of the Company e.g. with regard to capital expenditure and merger and acquisition transactions Achieved first rank among the financial ranking of central public sector enterprises for the year 2007–08 on the basis of overall performance on financial and other parameters*** * As at January 1st, 2010 **Source: Federation of Indian Mineral Industries *** As per as per the survey carried out by Department of Public Enterprises, Ministry of Heavy Industries and Public Enterprises 7 NMDC Limited: Key Themes 1 Established 8 Sustained corporate financial and performance * operating 2 history Largest Strong in- producer of house iron ore in technical India by capabilities 7 volume 3 Access to Focused abundant expansion high quality plans iron ore reserves Strong Low-cost 6 domestic and producer of global demand iron ore potential 4 5 * All financial numbers in this presentation are based on restated consolidated audited accounts unless indicated otherwise 8 Largest producer of iron ore in India In FY2009, NMDC contributed to 13% of India’s total iron ore production and produced 28.5 million tonnes of iron ore Location of NMDC’s principal mining facilities Historic production at key mining locations 25.0 20.0 23.0 22.2 20.6 onnes) 15.0 17.5 15.8 6.9 10.0 5.2 5.5 5.7 6.4 5.0 (million t (million 0.0 FY2005 FY2006 FY2007 FY2008 FY2009 Chhattisgarh* Karnataka** •Includes Bacheli and Kirandul mining complexes Madhya Pradesh **Includes the Donimalai mining complex Bacheli Mining Composition of iron ore production Chhattisgarh Complex: Panna Diamond Deposit – 5, 10 35.0 30.0 Mine 28.5 and 11A 30.0 26.3 23.0 Vizag Port 25.0 21.0 18.1 17.2 Karnataka 20.0 15.0 Donimalai Iron Kirandul Mining Complex: 13.0 15.0 11.6 Ore Mine Deposit – 11C, 14 NMZ, 14 10.0 11.3 11.9 11.4 Kumaraswamy tonnes) (million 5.0 9.4 10.0 Chennai Port Iron Ore Mine 0.0 FY2005 FY2006 FY2007 FY2008 FY2009 Lumps & CLO Fines & Slimes Total Production 9 NMDC Limited: Key Themes 1 Established 8 Sustained corporate financial and performance * operating 2 history Largest Strong in- producer of house iron ore in technical India by capabilities 7 volume 3 Access to Focused abundant expansion high quality plans iron ore reserves Strong Low-cost 6 domestic and producer of global demand iron ore potential 4 5 * All financial numbers in this presentation are based on restated consolidated audited accounts unless indicated otherwise 10 Access to high quality iron ore reserves and resources NMDC has access to large reserves of high grade iron ore, predominantly greater than 64% Fe content Reserves and resources of 1,360.6* million metric tonnes (mT) as at January 1, 2010** 900 829.5 800 700 600 500 onnes) 400 (million t (million 300 201.0 182.2 200 147.9 100 0 Proved Reserves Probable Reserves Mineral Resources*** Chhattisgarh Group Karnataka Group * Includes