2ND INTERNATIONAL COAL CONFERENCE SECURING FUTURE NEEDS 1

SECURING FUTURE NEEDS FOR METALLURGICAL COAL 2ND INTERNATIONAL COAL CONFERENCE 2

HOW HAVE INTERNATIONAL MET COAL PRICES BEHAVED? 2ND INTERNATIONAL COAL CONFERENCE 3

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5 2ND INTERNATIONAL COAL CONFERENCE

6 Mine owners were frustrated They started selling off Some companies bought them No prizes for guessing these companies!

THUS OLIGOPOLY GOT CREATED 2ND INTERNATIONAL COAL CONFERENCE 7

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FORTUNE FAVOURS THE BRAVE 2ND INTERNATIONAL COAL CONFERENCE 10

1.Bellambi 2.Blackwater 3.Broadmeadow 4.Burton 5.Collinsville 6.Crinum 7.Curragh 8.German Creek 9.Goonyella 10.Gregory 11.Hail creek 12. Metropolitan 13. Kestrel 14. Metropolitan 15. Moorabah North 16. Moura 17. North Goonyella 18. Norwick Park 19. Oaky Creek 20. Peak Downs 21. Saraji 22. Tahmoor Leases of these coal blocks are distributed among large mining companies like BHP Billiton, Xstrata, Peabody, Anglo American, Rio Tinto, Wesfarmers etc. Japanese Companies like Mitsubishi, Mitsui, Nippon Steel, Sumitomo, Itochu etc. have significant stakes in these assets. Queensland New South Wales Victoria Major Mining Blocks in Australia ND INTERNATIONAL COAL CONFERENCE

12 Opportunity lost by India. An Union Coal Secretary (in the 1990s) told a coking coal mine producing 5 mtpa was available for US $25 Million We did not decide & lost it The same mine now would be earning upwards of US $500 Million dollar in PBT

INDIAN STEEL SECTOR 2ND INTERNATIONAL COAL CONFERENCE 13 NOW60 MT MT MT

2ND INTERNATIONAL COAL CONFERENCE STEEL PLANTCOAL MINE Industry TypeContinuousDiscontinuous CapexUS $ 1 Billion per Million Tonne Hardly 15 to 20% of Steel Industry Value Addition10-30% % Higher Capital Intensity Industry having lower Value Addition - Lopsided Situation DICE LOADED AGAINST STEEL COMPANIES

15 Enter into long term supply contract for coal (15 year plus) Acquire insurance equity in Coal Mines a la Japanese Companies Step up on R & D to use non-coking coal and other fuels Iron Ore Suppliers to reduce Alumina content More and more PCI PRESCRIPTION FOR STEEL PLANTS

16 More efficient use of Met Coal & other fuels Explore non-traditional Regions – Mozambique, Magnolia, South Africa, Indonesia etc. Govt. of India to consider sovereign fund for such mineral acquisition Consolidation/M&A amongst Steel & Mineral Companies likely PRESCRIPTION FOR STEEL PLANTS

17 There is enough for everybodys need but not for their Greed Availability is there – at what prices is the issue Mineral companies to invest in more efficient mining, better quality minerals at lower cost is the need Not to be Complacent, when there is plenty! SECURING FUTURE NEEDS

18 Thank you