2nd international coal conference securing future needs 1
TRANSCRIPT
2ND INTERNATIONAL COAL CONFERENCE
SECURING FUTURE NEEDS
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SECURING FUTURE NEEDS
FOR
METALLURGICAL COAL
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HOW HAVE INTERNATIONAL MET COAL PRICES BEHAVED?
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Mine owners were frustrated
They started selling off
Some companies bought them
No prizes for guessing these
companies!
THUS OLIGOPOLY GOT CREATED
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FORTUNE FAVOURS THE BRAVE
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1. Bellambi2. Blackwater3. Broadmeadow4. Burton5. Collinsville6. Crinum7. Curragh8. German Creek9. Goonyella10.Gregory11.Hail creek
12. Metropolitan13. Kestrel14. Metropolitan15. Moorabah North16. Moura17. North Goonyella18. Norwick Park19. Oaky Creek20. Peak Downs21. Saraji22. 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
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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
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NOW 60 MT2012 120 MT2020 220 MT
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STEEL PLANT COAL MINE
Industry Type Continuous Discontinuous
Capex US $ 1 Billion per Million Tonne
Hardly 15 to 20% of Steel Industry
Value Addition 10-30% 100-300%
Higher Capital Intensity Industry having lower Value Addition - Lopsided Situation
DICE LOADED AGAINST STEEL COMPANIES
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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
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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
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There is enough for everybody’s 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
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Thank you