Vedanta AGM 2012 - Presentation

12
VEDANTA RESOURCES PLC FY 2012 Annual General Meeting 28 AUGUST 2012

Transcript of Vedanta AGM 2012 - Presentation

Page 1: Vedanta AGM 2012 - Presentation

VEDANTA RESOURCES PLCFY 2012 Annual General Meeting

28 AUGUST 2012

Page 2: Vedanta AGM 2012 - Presentation

Cautionary Statement and Disclaimer

The views expressed here may contain information derived from publicly available sources that have not been

independently verified.

No representation or warranty is made as to the accuracy, completeness, reasonableness or reliability of this

information. Any forward looking information in this presentation including, without limitation, any tables, charts

and/or graphs, 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 Vedanta Resources plc ("Vedanta").

Past performance of Vedanta cannot be relied upon as a guide to future performance.

This presentation contains 'forward-looking statements' – that is, statements related to future, not past, events. In

this context, 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 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 that those expressed in our forward-looking statements. We do not undertake to

update our forward-looking statements.

This presentation is not intended, and does not, constitute or form part of any offer, invitation or the solicitation of

an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities in Vedanta or any

of its subsidiary undertakings or any other invitation or inducement to engage in investment activities, nor shall

this presentation (or any part of it) nor the fact of its distribution form the basis of, or be relied on in connection

with, any contract or investment decision.

FY2012 Annual General Meeting - 28 August 2012 2

Page 3: Vedanta AGM 2012 - Presentation

Wide Geographic Footprint

India

Ireland

Zinc-lead-silver• Lisheen

Namibia

Zinc-lead-silver• Skorpion

Zinc-lead-silver• Debari smelter• Chanderiya smelters• Rampura-Agucha mine• Dariba mine, smelters• Zawar mine• Sindesar Khurd mine

Oil and Gas• Rajasthan• Cambay• Ravva• East Coast• West Coast• Sri Lanka

Zinc-lead-silver• Black Mountain • Gamsberg

South Africa Oil and Gas• Block-1

Copper• CMT

Australia

Iron ore• Liberia Iron Ore Assets

Liberia

Iron ore• Goa• Karnataka

Copper• Tuticorin copper smelter

Aluminium• Lanjigarh alumina refinery

• Jharsuguda smelter • Korba smelter and power plant

• BALCO coal block

Power• Talwandi Sabo • Jharsuguda power• MALCO power plant

Sri Lanka

Copper• KCM

Zambia

FY2012 Annual General Meeting - 28 August 2012 3

Page 4: Vedanta AGM 2012 - Presentation

FY2012 Highlights

Financials

� EBITDA of $4.0bn; EBITDA margin 41%1

� Underlying EPS of $1.42

� Free Cash Flow of $2.5bn2; Cash and Liquid Investments of $6.9bn

� Total Dividend at 55 US cents per share

Corporate

� Group simplification creates Sesa Sterlite – on track for completion in CY2012

� Integrated Cairn India – Rajasthan production now at 175kbopd; basin potential of

300kbopd3

� Acquired Liberia Iron Ore assets with c.1bn tonnes R&R; first shipment in FY2014

FY2012 Annual General Meeting - 28 August 2012

Note: 1. Excludes Copper Custom Smelting operations 2. Free Cash Flow before Growth Capex 3. Subject to approvals

4

Page 5: Vedanta AGM 2012 - Presentation

FY2012 Highlights

Operations

� Growth capex largely invested – to drive production and cash flow growth

� Significant production growth in Silver, Alumina, Aluminium, Power and Oil & Gas

� Exploration success at Zinc, Iron Ore and Oil & Gas

Sustainability

� New sustainability framework rolled out

� LTIFR reduced by 10% over last year

� Doubled water recycling across the Group

FY2012 Annual General Meeting - 28 August 2012 5

Page 6: Vedanta AGM 2012 - Presentation

Delivering on Strategic Priorities

Delivered in FY2012 Focus for FY2013

� Cairn India and Zinc-Intl

integrated

� Liberia Iron Ore assets acquired

� 16moz Silver capacity at Zinc-

India

� Progressed on organic growth

projects

� Rajasthan ramp-up to significant

part of 240kbopd1 in CY2013;

progress towards basin potential of

300kbopd1

� Ramp-up at Konkola and Power

� Next leg of growth

GROWTH

Organic Growth, Value Accretive

M&A

FY2012 Annual General Meeting - 28 August 2012

Note: 1. Subject to approvals

� Simplification of the Group

structure announced

� Exploration success

� Low cost advantage maintained

� Complete the simplification of the

Group structure

� Adding R&R

� Reduce gearing through strong Free

Cash Flow post capex

UNLOCK VALUE

Optimise Returns

Long Term Value Creation with a Focus on Sustainability

6

Page 7: Vedanta AGM 2012 - Presentation

Responsible Stewardship – Health & Safety

Health

� Investing in technologically advanced

processes that reduce possible

exposure levels at work area

� Regular medical check ups - Over

87,000 medical examinations conducted

in FY2012

Safety

� Goal is to reach & sustain “Zero Harm”

� 48% reduction in LTIFR in last five

years

� Focused programme on elimination of

unsafe conditions across units

� Exco sub-committee on sustainability

formed - current focus is on safety

� Monitoring and review of industrial

hygiene parameters such as noise

exposure, illumination levels and

manual handling

FY2012 Annual General Meeting - 28 August 2012 7

Vedanta is committed to providing a safe, injury-free and healthy place to work

formed - current focus is on safety

performance

� 134,000 man hours of safety training

imparted last year

� Targeting LTIFR less than 0.80 in

FY2013 and less than 0.50 by FY2016

Page 8: Vedanta AGM 2012 - Presentation

Responsible Stewardship – Environment

Water

� Doubled water recycling to 55.7MCM in FY2012

� 14.5MCM of rainwater harvested in FY2012

Energy

� Energy saving target for FY2013 is 3.9mn GJ,

equivalent to 120MW power station

Climate Change

� 273MW wind power capacity

61MW generated from waste heat� 61MW generated from waste heat

� 16.2% decrease in GHG emissions (scope 1 & 2)

per total revenue

Solid Waste

� More than 70% of non-hazardous waste

generated is constructively utilised

� Extensive research with best institutes in India

to constructively utilize Jarofix and Red mud

FY2012 Annual General Meeting - 28 August 2012 8

Vedanta is committed to mitigating the environmental impact of our activities

Page 9: Vedanta AGM 2012 - Presentation

Adding and Sharing Value – Our Communities

� Community programmes reaching 3.1 million

people

� Community spend of US$38 million in FY 2012

� Working in partnership with 149 NGO’s and

academic institutions

� Focus areas– Child Care, Education, Women

Empowerment, Sustainable Livelihood , Health Empowerment, Sustainable Livelihood , Health

Water & Sanitation and Bio-Investment

� US$4.4 billion total contribution to government

exchequers

FY2012 Annual General Meeting - 28 August 2012 9

Working in partnership with our communities is an integral part of our strategy

350 bed Cancer Research Hospital at Raipur - US$61mn investment

Page 10: Vedanta AGM 2012 - Presentation

Assurance – Scott Wilson

� Vedanta sustainability framework of policies and technical standards completed

� The framework has been reviewed independently for compliance with the IFC performance

standards, the ICMM guidelines and the UN Global Compact

� Scott Wilson – 17 points closed, 6 points awaiting review for closure, 4 to be closed by the end

of year

− Final sign off by June 2013

FY2012 Annual General Meeting - 28 August 2012 10

Formalizing our approach to international standards and best practices

Page 11: Vedanta AGM 2012 - Presentation

Sustainability: Our approach

� Embed sustainable development into every aspect of what we do

� To improve our health and safety performance for a safer, more secure and

healthier environment

� To contribute further and in a more targeted way to local communities� To contribute further and in a more targeted way to local communities

� To continue to manage and minimize our impact on air, water and land

� To maintain a dialogue with stakeholders to help us further understand what is

needed to help support a sustainable society and planet

FY2012 Annual General Meeting - 28 August 2012 11

Page 12: Vedanta AGM 2012 - Presentation

2,500

3,000

3,500

4,000

Zinc-Lead Silver Iron Ore Copper

Aluminium Power Oil&Gas

Summary

� Business model based on growth, value creation and continuous improvement

� Strong focus on sustainability

� World-class diversified portfolio of large, structurally low-cost assets with long mine-life

− Recent acquisitions provide additional growth options

Year End Capacity

(in copper equivalent kt)

0

500

1,000

1,500

2,000

2,500

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

� Strong cash flow growth driven by substantially invested projects

� Group simplification on track for completion in CY2012

FY2012 Annual General Meeting - 28 August 2012

Note: 1. All metal and power capacities rebased using average Copper LME and Commodity prices for FY2012

2. Copper custom smelting capacities rebased at TC/RC for FY2012

12