Independence you can trust Mozambique A Highlighted Summary Andrew de Klerk Venmyn Deloitte Advisory & Valuation Manager Venmyn Deloitte Mozambique - A Highlighted Summary Public Clients Limited Private Clients Under Developed Various Commodities Dynamic Economy Clients Infrastructure Venmyn Deloitte Oil and Gas Deloitte Mozambique Coal Deloitte Consulting Leadership Mozambique Geology Gold Graphite Heavy Mineral Sands Iron Ore Exploration Tantalum and Niobium Capability Development Mining Technical/Scientific Services Growing Mineral Industry Reporting Growing Gas Sector Independent Mineral Asset Valuation Strategy Financial Services Funding Options Independence you can trust PAGE 2 Venmyn Deloitte Mozambique - Notes Independence you can trust PAGE 3 Venmyn Deloitte Mozambique - Country Infrastructure 28°E Lake Bangweulu32°E 36°E 40°E Tanzania Lake Niassa Lugenda Zambia Metangula Cabo Delgado 12°S Niassa DRC Pemba Malawi Mozambique Nampula Tete Lusaka Lago Chilwa Nacala Cahora Bassa Dam Kariba Dam Tete Zambezia 16°S Mozambique Manica Harare Quelimane Zimbabwe Sofala Gwai Mozambique Channel Lundi Beira 20°S Roads Transport Corridors Bazaruto Island Rivers Nacala Corridor Vilanculos Botswana Rail Sena Corridor Inhambane Gaza Towns Beira Corridor Nature Reserves Limpopo Airport Port 24°S South Africa Maputo Hydroelectric Power Plant Xai- Xai Gas Pipeline Pretoria Komati Maputo National Boundaries Provincial Boundaries Swaziland Indian Ocean 0 Scale 200km Independence you can trust PAGE 4 Venmyn Deloitte Mozambique - Notes Independence you can trust PAGE 5 Venmyn Deloitte Mozambique - Country Infrastructure Economy and Infrastructure of Mozambique The Mozambican economy is one of the fastest growing on the African continent, Key Transport Corridors resulting in electricity demand increasing by ~14% annually. 4 Sena Corridor – Mozambique’s only operational railway out of the 4 Mining and quarrying contributes ~3.6% to Mozambique's GDP Tete coalfield. It links Tete to the Port of Beira (heavily invested in by (2013) Vale). A total of 575km, with a capacity of 6mtpa of coal 4 National exports were valued at ~USD4.34 billion, with aluminum 4 Nacala Corridor – will connect the Moatize Coal Mine near Tete to accounting for 31.5%; coal, 12.5%; ilmenite, 7.3%; and natural gas, the Port of Nacala with a capacity of 18 mtpa of coal. A total of 4.9% (2012) 912km, 237km of which passes through Malawi 4 In 2012, Mozambique contributed: 4 Beira Corridor – the main tarred road and rail link between Port of 8 6% of the world's ilmenite production Beira and Harare, Zimbabwe. 8 3% of the world's zircon production 8 1% of the world aluminium production. Power Plants Include 4 Benga Power Plant (Tete Province) – 2,000MW (planning and In addition, Mozambique is a significant contributor to the world's tantalum demand construction) 4 There has been recent significant discoveries of natural gas 4 Ncondezi Power Plant (Tete Province) – 1,800MW (planning and 4 The mineral industry of Mozambique is likely to have substantial construction) growth in the near future, and this growth is expected to be broad 4 Cahora Bassa Hydroelectric Power Plant (Tete Province) – based 2,075MW (power sold to South Africa). 4 Mozambique is divided into ten provinces and has one capital city 4 Resano Garcia Gas Power Plant – 232MW 4 The north of Mozambique is the most underdeveloped and sparsely 4 Mavuzi Hydropower Plant – 52MW populated part of the country 4 Chicamba Hydropower Plant – 38.4MW 4 4,787km of railway 4 Corumana Hydropower Plant – 16.6MW 4 30,331km of roads - 6,303km paved and 24,028km unpaved 4 ACWA Moatize Power Station – 600MW (approved in February 4 98 airports - 21 paved runways and 77 unpaved. 2014 and expected to be completed in three years) 4 Lupata Hydropower Dam will produce 210MW+ and Boroma 612MW, respectively (planning and construction) Independence you can trust PAGE 6 Venmyn Deloitte Mozambique - Notes Independence you can trust PAGE 7 Venmyn Deloitte Mozambique - Geology Geology of Mozambique Tanzania § Geology of Mozambique as a whole is highly diversified and is represented by rocks of Archaean, Palaeo-, Meso- and Neoproterozoic, Karoo, Meso- and Cenozoic ages 12°S Lake Niassa Lake § Approximately two-thirds of Mozambique is covered by igneous and DRC metamorphic rocks of Archaean to Neoproterozoic age, with the Mozambique Mozambique remaining third covered by Phanerozoic terrains which are found Zambia south of the Zambezi valley and along the coastal belt in the T northeast. Archaean and Paleoproterozoic terrains represent an Cahora Bassa Dam L E extension of the Zimbabwe Craton, which also includes granitoids, Z A Malawi B M gneisses and migmatites of the Barue Complex B E 16°S Z E § Two main orogenies are recognised within Mozambique: the I L M I Irumide Orogeny(1,800-1,350Ma), represented today by the O B B Irumide Belt in the northwest (forming an extension of the I O L Mozambique Channel greenstone belts and granite-gneisses of the Zimbabwe Craton), E E M B B and the Mozambican Orogeny(1,100-850Ma), represented by the E Zimbabwe E L L Mozambique Belt. These geological terrains constitute 90% of the E T T Fault Precambrian rocks of Mozambique U § Mozambique's geology is completed by the three main Phanerozoic 20°S Q City/Town Karoo Supergroup (Permo-Carboniferous to Lower Jurassic) I Post Karoo sedimentary basins – the intracratonic Alto Zambezi, Rio Lunho and B Karoo Supergroup Rio Lugenda Basins. M Upr. Proterozoic A A Undifferentiated Mid to Z Z Upr. Proterozoic O O 24°S M M Middle Proterozoic South Africa Lower Proterozoic Maputo 0 200km Archaean Scale Indian Ocean Independence you can trust PAGE 8 Venmyn Deloitte Mozambique - Notes Independence you can trust PAGE 9 Venmyn Deloitte Mozambique - Oil and Gas Tanzania Rovuma Basin Anadarko 12°S Statoil Petronas Malawi Mozambique ENI Zambia Mamba Complex Coral Discoveries 12°S Prosperidade Complex Tubarão Discoveries Golfinho/Atum Complex 16°S Mozambique Future Natural Gas Pipeline Mozambique Channel Zimbabwe Mozambique Basin (Pande and Temane Gasfields) 20°S Area A - Sasol Sasol Mozambique Channel Buzi-Divinhe Block - Energi Mega Persada (EMP) Botswana Pande/Temane - Sasol 20°S Sasol Gas Pipeline 24°S South Africa Indian Ocean 0 200km 0 100km Scale Scale Independence you can trust PAGE 10 Venmyn Deloitte Mozambique - Notes Independence you can trust PAGE 11 Venmyn Deloitte Mozambique - Oil and Gas Geology of Mozambique - Oil and Gas § East Africa has emerged as a new energy hub, following large § The Central Processing Facility (CPF) of Sasol Petroleum International discoveries of oil and gas in the sub-region creating a growing industry (SPI) in Temane, Mozambique, cleans and dries gas from the nearby which has the potential to greatly impact and transform the economy of Pande and Temane gasfields before it is transported via an 865km Mozambique pipeline to Sasol's facilities in Secunda, South Africa § Mozambique's potential lies primarily in natural gas rather than oil and reportedly, has the potential to host the 4th largest gas reserves of the Deepwater Rovuma Gas Field – Rovuma Basin world after Russia, Iran and Qatar § Oil and gas exploration in the Rovuma River Basin began 50 years ago § Mozambique hosts two important continental-margin basins, namely the but early wells were either dry or gas prone which resulted in the region Rovuma Basin and the Mozambique Basin (Pande, Temane, Buzi- being largely ignored for several decades Divinhe onshore gasfields) § Recently Anadarko and ENI have drilled numerous deep-water wells and have together discovered an estimated 150+ Tcf of natural gas Pande and Temane Gas Fields – Mozambique Basin § Anadarko drilled >25 successful wells, discovering the Prosperidade § Natural gas was first discovered in Mozambique's Pande and Temane complex with an estimated 17-30+ Tcf fields in the mid-1960s, but remained undeveloped for nearly 40 years § This was followed by the discovery of the Golfino and Atum Complexes – due to the socio-political turmoil and lack of a developed gas market at with a combined holding of 15-35 Tcf of recoverable natural gas the time resources § In 1998 Sasol's surveys confirmed potentially significant natural gas § Based on this discovery, Anadarko and its partners are advancing a reserves, with a combined 156 Bcm (5.5 Tcf) field volume, making full- large-scale commercial Liquified Natural Gas development onshore scale production investment economic § In addition, Ani S.p.A (Italy) discovered the Mamba Complex with an § Mozambique launched its first offshore licensing round on 31 March estimated 1.76Tcf of gas. 2000, offering 14 blocks § Sasol Petroleum Temane Limitadah intends boosting electricity capacity at a planned gas processing plant in Mozambique by building an Electrical Expansion and Fuel Gas Superheater at the Temane gas processing facility in the Inhambane Province § The Temane gas processing facility mainly supplies gas to the Central Térmica de Ressano Garcia (CTRG) which generates 175MW of electricity for more than two million Mozambicans – this equates to 23% of Mozambique's current demand Independence you can trust PAGE 12 Venmyn Deloitte Mozambique - Notes Independence you can trust PAGE 13 Venmyn Deloitte Mozambique - Coal Deposits Tanzania Ncondezi Coal Mine (Ncondezi Energy) Chirodzi Coal Mine § Feasibility completed in 2013 (Jindall Africa) § Measured resources of 120mt § First export of coal in Z A M § Planned to produce 1.3mtpa over 25 years LoM May 2013 of 36,000 B 12°S E § Affiliated Ncondezi Power Plant to produce