You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
Cautionary Statement and Disclaimer<br />
• The views expressed here may contain information derived from publicly available sources that have not been<br />
independently verified.<br />
• No representation or warranty is made as to the accuracy, completeness, reasonableness or reliability of this<br />
information. Any forward looking information in this presentation including, without limitation, any tables, charts<br />
and/or graphs, has been prepared on the basis of a number of assumptions which may prove to be incorrect. This<br />
presentation should not be relied upon as a recommendation or forecast by <strong>Vedanta</strong> <strong>Resources</strong> plc ("<strong>Vedanta</strong>") or<br />
Konkola Copper Mines Plc.(KCM). Past performance cannot be relied upon as a guide to future performance.<br />
• This presentation contains 'forward-looking statements' – that is, statements related to future, not past, events. In<br />
this context, forward-looking statements often address our expected future business and financial performance,<br />
and often contain words such as 'expects,' 'anticipates,' 'intends,' 'plans,' 'believes,' 'seeks,' or 'will.' Forward–<br />
looking statements by their nature address matters that are, to different degrees, uncertain. For us, uncertainties<br />
arise from the behaviour of financial and metals markets including the London Metal Exchange, fluctuations in<br />
interest and or exchange rates and metal prices; from future integration of acquired businesses; and from<br />
numerous other matters of national, regional and global scale, including those of a environmental, climatic,<br />
natural, political, economic, business, competitive or regulatory nature. These uncertainties may cause our actual<br />
future results to be materially different than those expressed in our forward-looking statements. We do not<br />
undertake to update our forward-looking statements.<br />
• This presentation is not intended, and does not, constitute or form part of any offer, invitation or the solicitation of<br />
an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities in <strong>Vedanta</strong> or<br />
any of its subsidiary undertakings or any other invitation or inducement to engage in investment activities, nor shall<br />
this presentation (or any part of it) nor the fact of its distribution form the basis of, or be relied on in connection<br />
with, any contract or investment decision.<br />
2
Agenda<br />
Company Overview<br />
Projects<br />
Current Performance and Projection<br />
KCM Management team<br />
Corporate Social Responsibility<br />
Conclusion<br />
3
KCM – Overview<br />
• World class resource<br />
‣ 471mt of Reserves and <strong>Resources</strong><br />
‣ 12mt of contained Cu, 25+ years average mine life<br />
‣ Konkola mine grade of 3.6%; average KCM grade of 2.5%<br />
• Well invested production facilities<br />
‣ Nchanga smelter achieves rated capability in capacity and recovery<br />
‣ KDMP mid-shaft loading – 31 st March, 2010; Project on track<br />
‣ $1.5 bn capital investment<br />
• Key deliverables<br />
‣ Growth from 133kt production in FY2009 to exit capacity of 400+ kt in FY2012<br />
‣ Further cost reduction and stabilization, targeting < $1.00 / lb in cash cost<br />
‣ Resource growth through exploration<br />
• Largest mining investment in Zambia<br />
‣ Strong working relationship with Zambian government<br />
‣ Healthy labour relations<br />
‣ Committed to training and developing Zambia’s workforce<br />
‣ Local communities: health, education and welfare programs<br />
4
KCM assets<br />
Tenke<br />
Konkola (Chililabombwe)<br />
• Deep Mine – KDMP (Underground Mine – 3 shafts)<br />
• Concentrator<br />
Kamoto JV<br />
Republic of Zambia<br />
Kansanshi<br />
Lumwana<br />
Nchanga (Chingola)<br />
• Underground Mine (2 shafts)<br />
• Open Pit Mine<br />
• 2 Concentrators<br />
• Tailings Leach Plant (SXEW)<br />
• Smelter (new)<br />
Chambishi<br />
Kitwe Ndola<br />
Nkana (Kitwe)<br />
• Refinery<br />
• Decommissioned old smelter<br />
Kabwe<br />
Frontier<br />
ZAMBIA<br />
Nampundwe<br />
• Underground Pyrite Mine<br />
Lusaka<br />
KCM operations<br />
Other operators<br />
5
Mine comparison<br />
Cu grade in resources (%) for the Top 20 global<br />
copper mines (by resources)<br />
20 highest grade mines in the world (by annual Cu<br />
production (kt)<br />
Underground mine<br />
Open pit mine<br />
KOV, DRC (Katanga)<br />
Konkola, Zambia (<strong>Vedanta</strong>)<br />
Kamoto, DRC (Katanga)<br />
Tenke, DRC (Phelps, Tenke)<br />
3.60%<br />
3.40%<br />
3.10%<br />
Kananga, DRC (Katanga)<br />
2.07%<br />
Nchanga, Zambia (<strong>Vedanta</strong>)<br />
Tilw ezembe, DRC (Katanga)<br />
1.60%<br />
1.49%<br />
Olympic Dam, Australia (BHPB) 1.10%<br />
Escondida, Chile (BHPB, Rio) 1.08%<br />
Chuquic-amata,Chile(Codelco) 0.86%<br />
Collahuasi, Chile (Anglo, Falconbridge) 0.84%<br />
Grasberg, Indonesia (Freeport) 0.80%<br />
Sar-Cheshmeh, Iran (Iran) 0.70%<br />
Toquepala, Peru (SCC) 0.67%<br />
Bingham, USA (Rio) 0.65%<br />
El Teniente, Chile (Codelco) 0.63%<br />
L. Pelambres, Chile (Antofagasta) 0.62%<br />
Cananea, Mexico (Grupo Mexico) 0.61%<br />
Radomiro, Chile (Codelco) 0.59%<br />
Los Bronces, Chile (Anglo) 0.57%<br />
Andina, Chile (Codelco) 0.56%<br />
Salvador, Chile (Codelco) 0.49%<br />
Morenci, USA (Phelps) 0.26%<br />
Source: Raw Materials, CPR, company websites<br />
Contained<br />
Cu (Mt) Rudna, Poland (KGHM)<br />
300<br />
5.09% 8.8<br />
Oktyabrsky, Russia (Norilsk)<br />
280<br />
8.1<br />
Mount Isa, Australia (Xstrata)<br />
178<br />
4.6<br />
2.9<br />
Polkow ice, Poland (KGHM)<br />
160<br />
0.1<br />
Kamoto, DRC (Katanga)<br />
150<br />
4.0<br />
Konkola, Zambia (<strong>Vedanta</strong>)<br />
133<br />
0.1<br />
Taimyrsky, Russia (Norilsk)<br />
95<br />
43.7<br />
Neves Corvo, Portugal (Eurozinc)<br />
90<br />
22.3<br />
Nkana, Zambia (Glencore)<br />
80<br />
23.7<br />
Mufulira, Zambia (Glencore)<br />
70<br />
34.9<br />
42.0<br />
Tenke, DRC (Phelps, Tenke) 50<br />
8.4<br />
Lonshi, DRC (First Quantum) 49<br />
9.3<br />
Kidd Creek, Canada (Falconbridge) 43<br />
10.5<br />
Osborne, Australia (Placer Dome) 40<br />
72.1<br />
Cayeli, Turkey (Inmet) 27<br />
19.4<br />
Tritton, Australia (Straits Res) 19<br />
12.0<br />
14.8<br />
Dikulushi, DRC (Anvil) 18<br />
16.7<br />
Eloise, Australia (Barminco) 17<br />
91.3<br />
Storliden, Sw eden (Lundin) 11<br />
11.2<br />
Chibuluma South, Zambia (Metorex) 5<br />
11.3<br />
Source: Raw Materials, CPR, company websites, pre-feasibility study<br />
6
<strong>Resources</strong> and mine life<br />
• Konkola Mine – “Tier 1” resource with one of the largest open-ended high grade ore<br />
body<br />
• Nchanga mine life enhanced through Upper Ore Body (UOB) project<br />
• Large stock pile of refractory ore (CRO) – plant scale process ability established –<br />
low cost operation<br />
• Focus on exploration – 40,000m drilling per year till 2012<br />
‣ Significant additions in reserves expected over next two years<br />
Reserves &<br />
<strong>Resources</strong><br />
Average<br />
Grade<br />
Area<br />
Cont. Cu<br />
LoM<br />
(Million MT) (Million MT) % Years<br />
Konkola Underground 228 8.1 3.6% 30+<br />
Nchanga Open Pits 171 2.4 1.4% 12+<br />
Nchanga Underground 72 1.5 2.1% 22+<br />
Total 471 12.0 2.5%<br />
Tailings 80 0.6 0.7% 10+<br />
Refractory Ore (CRO) 150 1.3 0.9% 16+<br />
Note : As of 31/03/09<br />
7
KCM Milestones<br />
2004 2005 2008 2009 2010<br />
<strong>Vedanta</strong> buys<br />
majority stake in<br />
KCM (51%)<br />
Work<br />
commences on<br />
Konkola Deep<br />
Mining Project<br />
(KDMP) and<br />
Nchanga<br />
Smelter<br />
<strong>Vedanta</strong><br />
increases stake<br />
(79.4%)<br />
Commissioning<br />
of a new smelter<br />
(Nchanga) &<br />
Concentrator<br />
(Konkola)<br />
KDMP Mid-shaft<br />
Loading to<br />
commence<br />
8
Agenda<br />
Company Overview<br />
Projects<br />
Current Performance and Projection<br />
KCM Management team<br />
Corporate Social Responsibility<br />
Conclusion<br />
9
Investment Cornerstones<br />
Project Description Capacity Status<br />
1<br />
New smelter at<br />
Nchanga<br />
• State-of-the-art technology<br />
• Benchmark Sulfur Capture 311 ktpa Commissioned<br />
2<br />
KDMP<br />
• Enhanced mining up to 1,500 M depth<br />
• Mine life extension to 30 years 7.5 mtpa at<br />
3%+ Cu<br />
100% sinking for<br />
MSL (95% of<br />
total) completed<br />
3<br />
New concentrator<br />
at Konkola<br />
• Caters to enhanced mining out put<br />
• Improved recovery<br />
• Improved Concentrate grade<br />
6 mtpa processing<br />
capacity<br />
Commissioned<br />
4<br />
TLP 4 Expansion<br />
• Increase capacity at current facility<br />
75 Ktpa<br />
Under<br />
Development<br />
5<br />
CRO project at<br />
Nchanga<br />
• Harnesses 150mt Refractory ore stock<br />
pile<br />
• Uses entire acid from Nchanga Smelter<br />
50 Ktpa<br />
Under<br />
Development<br />
6<br />
New<br />
concentrator at<br />
Nchanga<br />
• Caters to enhanced mining out put<br />
• Improved recovery<br />
• Improved Concentrate grade<br />
7.5 mtpa<br />
processing<br />
capacity<br />
Under<br />
Development<br />
10
The New Nchanga Smelter<br />
• Already achieved rated capacity<br />
• Project ramp-up in record time<br />
• Direct Blister Flash Smelting Technology from Outokompu (Finland)<br />
• Process best-suited to treat Nchanga & Konkola low-iron and sulphur content concentrates<br />
• 311 ktpa Copper at benchmark recoveries<br />
• Expected recoveries of 98%+<br />
• Benchmark Sulphur fixation – >97% of all sulphur emissions is eliminated<br />
• Capability to recover ~3 ktpa of cobalt in the form of cobalt alloy<br />
11
The New Nchanga Smelter<br />
12
KDMP<br />
13
Agenda<br />
Company Overview<br />
Projects<br />
Current Performance and Projection<br />
KCM Management team<br />
Corporate Social Responsibility<br />
Conclusion<br />
14
Projected Ramp-Up and Key milestones<br />
Production<br />
Exit capacity<br />
350+ kt<br />
400+ kt<br />
275 kt<br />
133 kt<br />
FY 2009 FY 2010 FY 2011<br />
FY 2012<br />
Key Milestones<br />
• TLP 4 Project<br />
• Opening of open pit mine 66<br />
(COP-A)<br />
79<br />
• Nchanga Smelter achieves full<br />
ramp-up<br />
• KDMP Mid-shaft loading<br />
• CRO Project (50Ktpa)<br />
• Nchanga underground<br />
UOB project<br />
• KDMP development<br />
ramp-up<br />
• 2nd Cobalt recovery<br />
furnace project<br />
• KDMP Bottom shaft<br />
loading<br />
• New expanded Nchanga •<br />
Concentrator<br />
TLP 5 Project<br />
• Opening of open pit mine<br />
(Mimbula and Kakosa)<br />
15
Safety And Quality Performance<br />
• OHSAS 18001 Certification – since 2005<br />
• International Golden Peacock Award – 2008<br />
• British Safety Council International Safety Award – 2009<br />
• First mining company in Africa to attempt a Combined Five star and OHSAS 18001 Certification<br />
and obtained 3 Stars in International 5 Star Best Practice – August 2009<br />
• 1st Prize – Zambia Federation of Employers – Best Safety and Occupational Health policy<br />
• 2nd Prize – Zambia federation of Employers – Best HIV/Aids Policy – October 2009<br />
300<br />
LTI Events LTIFR 200Khrs LTISR 2Khrs<br />
1.6<br />
LTI Events<br />
250<br />
200<br />
150<br />
100<br />
50<br />
1.4<br />
1.2<br />
1<br />
0.8<br />
0.6<br />
0.4<br />
0.2<br />
LTIFR 200 Khrs LTISR 2 Khrs<br />
0<br />
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009<br />
LTI Events 241 189 128 106 113 51 72 98 112 54<br />
LTISR 2Khrs 0.82 0.4 0.6 0.71 0.68 0.35 0.29 0.23 0.25 0.15<br />
LTIFR 200Khrs 1.47 0.74 0.51 0.44 0.51 0.24 0.31 0.35 0.34 0.19<br />
0<br />
16
KCM Performance<br />
Production (kt)<br />
Cash Costs ($/lb)<br />
2.88<br />
• Production stabilized and ramp-up with new<br />
smelter<br />
‣ Production impacted by KDMP shaft<br />
development<br />
1.90 1.92<br />
79<br />
71<br />
73<br />
2.22<br />
1.69<br />
78<br />
• Costs peaked in mid-2008 in part due to<br />
commodity inflation and FX fluctuations<br />
H1 08 H2 08 H1 09 H2 09 H1 10<br />
60<br />
• Costs have been contained through:<br />
‣ Lower cost smelter operations<br />
‣ Labor reduction<br />
‣ Improved sourcing<br />
‣ Elimination of sulphur purchases<br />
‣ Stabilization of tailings dam (low-cost<br />
mining)<br />
‣ Replacement of high cost equipment<br />
17
Cost Performance<br />
1.92<br />
2.88<br />
Target exit cost<br />
Administration<br />
Repairs & maintenance, others<br />
Raw materials & consumables<br />
Power & fuel<br />
Manpower<br />
2.22<br />
1.69<br />
1.25 to<br />
1.35<br />
Cost Reduction Drivers<br />
• Volume effect with increased production<br />
• Cost mix change with lower-cost CRO /<br />
TLP production<br />
• Restructuring with associated manpower<br />
reduction<br />
• Improved sourcing<br />
‣ Leveraging <strong>Vedanta</strong> Group buying<br />
power<br />
‣ Greater discipline in service contracts<br />
• Bringing in world class contractors<br />
• Higher recoveries from new concentrators<br />
• Higher by-product credits from cobalt<br />
• Reduction in non-production cost through<br />
greater cost discipline<br />
FY08 H1 09 H2 09 H1 10 FY10<br />
Note : cash cost in $ / lb<br />
18
Actions underpinning KCM’s Vision<br />
1<br />
Labor<br />
Productivity /<br />
Optimisation<br />
• 2,000 staff reduced<br />
• Operating teams restructured into smaller accountable units<br />
• New performance management system introduced<br />
• Specialized staff being inducted<br />
2<br />
3<br />
Outsourcing<br />
IT & Technology<br />
• ~88% of Open pit production outsourced to two leading contractors<br />
• Tailings dam reclamation outsourced<br />
• In progress to outsource key areas of maintenance<br />
• Introduction of SAP for better control and visibility of operations<br />
• State-of-the-art technology platform being introduced for plant automation<br />
4<br />
5<br />
The <strong>Vedanta</strong><br />
Advantage<br />
Projects<br />
• Leadership and human resource synergy with Hindustan Zinc through the Copper-Zinc<br />
sector<br />
• Leveraging the buying power with the Group’s other mining assets<br />
• High speed development with reputed contractors<br />
• CRO project technology from Outotec<br />
6<br />
Konkola<br />
de-watering /<br />
Power stability<br />
• Electrical stability project including emergency power supply<br />
• Enhanced number of pumps and improved pumping efficiency with de-sludging project<br />
19
Agenda<br />
Company Overview<br />
Projects<br />
Current Performance and Projection<br />
KCM Management team<br />
Corporate Social Responsibility<br />
Conclusion<br />
20
KCM Management Team<br />
Chief Executive Officer<br />
General Manager –<br />
Business Development<br />
Director –<br />
Operations<br />
Chief Financial<br />
Officer<br />
Vice President –<br />
Human <strong>Resources</strong><br />
Chief Marketing<br />
Officer<br />
GM – Konkola Ops.<br />
GM – Nchanga Ops.<br />
Head – CSR<br />
GM – KDMP<br />
GM – Smelter, Refinery<br />
& Projects<br />
Head – Corporate<br />
Affairs<br />
GM – Tech. Services &<br />
Special Projects<br />
VP - Engineering<br />
Head – Medical<br />
Chief Commercial<br />
Officer<br />
Head - HSE<br />
Head – Security<br />
21
Agenda<br />
Company Overview<br />
Projects<br />
Current Performance and Projection<br />
KCM Management team<br />
Corporate Social Responsibility<br />
Conclusion<br />
22
Corporate Social Responsibility<br />
• Health<br />
‣ Clinical health through 2 hospitals and 7 clinics<br />
‣ HIV/AIDS and rollback Malaria programmes<br />
‣ Free eye glasses program for Zambia involving distribution of 23,000 eyeglasses<br />
• Education<br />
‣ 2 Trust Schools in Chililabombwe and Chingola with over 1,600 students<br />
‣ Computer project for 19 schools involving donation of 300 computers, training of teachers<br />
and rehabilitation of computer laboratories<br />
‣ To spend $17.5M to upgrade Mulungushi University<br />
• Sports and recreation<br />
‣ Children’s recreation park constructed in Chingola<br />
‣ Rehabilitation of sports facilities such as gymnasium, swimming pool, basketball courts<br />
‣ Sponsorship of KCM-FAZ league, support for foreign coach for national football team<br />
• Local Economic Development & Community Support<br />
‣ Widows Income Generating Project focussed on tailoring<br />
‣ Income generation Support to 3 Orphanages<br />
‣ Early Childhood Care Centre to educate and feed marketeers children<br />
23
Agenda<br />
Company Overview<br />
Projects<br />
Current Performance and Projection<br />
KCM Management team<br />
Corporate Social Responsibility<br />
Conclusion<br />
24
Conclusion<br />
• World class resource base<br />
• Expansion program progressing well<br />
• Resource growth through exploration<br />
• Largest mining investment in Zambia<br />
• Significant health, education and welfare programs benefiting local communities<br />
• Supported by the resources of a leading metals and mining company - <strong>Vedanta</strong><br />
25
APPENDIX<br />
26
Corporate Social Responsibility<br />
• Local Economic Development<br />
‣ Widows Income Generating Project<br />
‣ Goat rearing for small-scale farmers<br />
‣ DAPP partnership for livelihoods support to<br />
10,000 households in Chingola and Nampundwe<br />
• Education<br />
‣ 2 Trust Schools in Chililabombwe and Chingola with over 1,600 students<br />
‣ Early Childhood Care Education and Development Centre for marketeers children<br />
‣ Have partnered with Government to develop infrastructure at the new Mulungushi<br />
University, near Kabwe. KCM to spend US$17.5 million<br />
‣ School Computer Literacy, KCM donated 300 computers and 19 printers to 19 government<br />
schools; sponsored IT training for 38 teachers and provided computer lab furniture. KCM to<br />
provide five year maintenance support<br />
27
Corporate Social Responsibility<br />
• Infrastructure Support<br />
‣ Spent over US$1.3 million on road and street lighting repairs<br />
‣ Sunk 2 boreholes to provide potable water to peri-urban<br />
communities<br />
‣ Construction of a children’s recreational park<br />
‣ Donation of borehole with a hand pump and 10 Ventilated<br />
Improved Pit Laterines<br />
• Community engagement through cultural dances, film shows and<br />
radio show<br />
• Sports Development<br />
‣ Sponsorship of the national football league<br />
‣ Sponsorship of 3 football clubs<br />
‣ Sponsorship of Nchanga Open Squash competition<br />
‣ Sports infrastructure support<br />
• Cricket, Rugby, Tennis, Netball, Swimming etc.<br />
• District school football tournaments<br />
28
Community Health Programmes<br />
• Malaria control Activities carried out yearly since 2000, >27,000 houses targeted. Reduction of<br />
>90% incidence of malaria in KCM’s areas of operation.<br />
• Jaipur foot camps held in 2006 to provide artificial limbs to people across the country.<br />
• Cataract eye camp held in June 2008. 3,000 people from six districts screened. 171 persons<br />
benefited from surgery and restoration of sight.<br />
• KCM Free eyeglasses programme began in November 2009. Aim to provide over 23,000 glasses<br />
to school going children and adults over the age of 45 years.<br />
29
Change language