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Worsley Alumina Pty Ltd1
INVESTORS AND ANALYSTS VISIT – SEPTEMBER 2003
Worsley Alumina Pty Ltd2
PERTH
BUNBURY
BODDINGTONBAUXITE MINE
KWINANA
PINJARRA
WAGERUP
INDIANOCEAN
COLLIE
WORSLEY
Worsley Alumina Pty Ltd3
Worsley Joint Venture Ownership Structure
N.I.A.4%
BHP Billiton 86%
KAA10%
Worsley Alumina Joint Venture
Worsley Alumina Pty Ltd4
Bauxite Mine Data
• 332 Mt remaining Ore Reserves (at 1 January 2003)• Additional indicated resources of 144 Mt (at 1 January 2003)
121 Mt mined to date (from 1984)
1987 hectares cleared
1230 hectares rehabilitated
• Key mining equipment11m3 excavator (backhoe config.) x 2
12m3 front end loader x 2105t rear dump trucks x 11Bulldozer (575) x 1
• Approx 30 year mine life at 3.2 Mtpy refinery capacity• Plan FY2004 Bauxite Production is 10.5 Mt• Employ approx. 160 employees (FTE) & 40 contractors (FTE)
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Forest Management
• Lease situated within State Jarrah Forest
• 784 plant species, 130 species of vertebrates and 150 bird species
• Forest Management - Dieback hygiene
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Forest Rehabilitation
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Conveyor
• Cable Belt design
• 51 Kilometers in 2 flights
• Travels at 26 kilometers per hour
• 2,750 tonnes per hour delivery
• 68,000 pulley wheels
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Refinery
• 2,500 hectare lease
• 100 hectares refinery site• Headwaters of Augustus River• 905 employees• 289 Contractors• Continuous operation• Bayer process• FY 2004 3.25mtpa 8900 tonnes per day• Equidistant from bauxite, coal & port • Established infrastructure
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Worsley Production
1984 Worsley Commenced
1995 Production 1.7 Million Tonnes
2001/2 Production 3.1 Million Tonnes (Expansion Design)
2003/4 Production 3.25 Million Tonnes
2006/7 Production 3.5 Million Tonnes – subject to approval of feasibility study and successful project completion
00.5
11.5
22.5
33.5
4
1985 1988 1990 1995 2001/2 2003/4 2006/7
Worsley Alumina Pty Ltd10
Other W.A. Refinery Production
KWINANA
PINJARRA
WAGERUP
4
12
10
8
6
2
063 70 72 76 79 84 88 90 95 2001 2003
1963 KWINANA COMMENCED PRODUCTION
1972 PINJARRA COMMENCED PRODUCTION
1984 WAGERUP & WORSLEY COMMENCED
1995 COMBINED PRODUCTION APPROX. 6.5 MILLION TONNES
2003 COMBINED PRODUCTION ESTIMATED 7.8 MILLION TONNES
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Total W.A. Refinery Production
KWINANA
PINJARRA
WAGERUP
2003 COMBINED PRODUCTION ESTIMATED 11.0 MILLION TONNES
WORSLEY
0
2
4
6
8
10
12
63 70 72 76 79 84 88 90 95 2001 2003
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Rankings by full operating costs year 2003(refineries estimated at less than us$120 per tonne)
Refinery Capacity US$Damanjodi 1575.0 73.5Worsley 3200.0 82.6Pinjarra 3500.0 86.6Wagerup 2300.0 87.3Pavlodar 1350.0 100.5Pingguo 650.0 106.3Paranam 1925.0 109.5Gladstone (QAL) 3650.0 110.6Belem 2300.0 112.1Guizhou 700.0 114.3Alcan Gove 1850.0 116.7Kwinana 2150.0 119.8
Source: BH-alumina cash costs-2003 Brook Hunt
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70.0
80.0
90.0
100.0
110.0
120.0
130.0
4 7 14 19 21
Tonnes (Millions)
US$/t
Wor
sley
Pinj
arra
Wag
erup
Pavl
oda
Dam
anjo
di
Ping
huo
Para
na
Gla
dsto
ne (Q
AL)
Bele
m
Gui
zhou
Gove Kw
inan
a
Rankings by full operating costs year 2003(refineries estimated at less than US$120 per tonne)
Source: BH-alumina cash costs-2003 Brook Hunt
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Alumina Refining costs year 2003
US$/t
8940 11925 29505 55970
60.0
80.0
100.0
120.0
140.0
160.0
180.0
200.0
220.0
240.0
DamanjodiWorsleyPinjarraWgerup
Sao LuisGuizhouShanxiPuerton OrdazKimboPocos De Mairinique
ZhengzhouNainClarendonStadeZhongzhouJajarmUralskRenukootSan CiprianKorbaAchinsk
PavlodarBelemParanamShandongCaldas
Tonnes (Millions)Source: BH-alumina cash costs-2003 Brook Hunt
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Powerhouse
• Provides steam, power and air to the Refinery• Coal fired boiler/turbine cogeneration plant• Gas turbine/waste heat boiler cogeneration plant• Produces
– 850 tonne per hour of steam– 105 MW of power– 120 MW of power to the grid
Worsley owns and operates coal plant and turbinesSWCJV owns gas turbine and waste heat boilerCogeneration plant is 75% efficient (35% conventional )
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Unit Labour Usage(tonnes per employee hour)
Tonnes Calcined per Employee Hour
0.6
1.0
1.4
1.8
1985 1987 1989 1991 1993 1995 1997 1999 2001 2003
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Labour Turnover
0%
5%
10%
15%
20%
25%
19821984
19861988
19901992
19941996
19982000
2002
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0
2
4
6
8
10
12
14
16
18
20A
pr '0
2
May
'02
Jun
'02
July
'02
Aug
'02
Sep
t '02
Oct
'02
Nov
'02
Dec
'02
Jan
'03
Feb
'03
Mar
'03
Apr
'03
May
'03
Jun
'03
Jul '
03
Injury Frequency Trends(Injuries per million hours worked)
TRIFR
LTI
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SHE Performance Indicators
Actual Actual Plan
Description 2002 2003 2004
TRIFR 15.3 7.6 5.5 CIFR 10.6 3.5 2.5
Reportable Environmental Incidents 1 1 <4Achieved ISO 14001 Mine-site Rehabilitation 100 hectares per annum
Worsley Alumina Pty Ltd20
Employee Relations History
1984 - 1994closed shopfederal award & agreementstraditional industrial relationship
Continuous ImprovementProgram
1994 - 2004staff contractsSingle class employee relationship
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Plan Costs (FY 2004)
Caustic16%Energy
16%
Mine10%
Conveyor4%
Maintenance (ex labour)14%
Labour Mtce6%
8%
Ops Labour11%
Prod'n Cons Contract Services3%
Royalty3%
Shipping & RailOther 3%15% Devel & Activity
2%Other4%
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Worsley alumina customers in 2003
Middle East8%
Indonesia1%
Russia1%
China36%
Canada17%
Mozambique18%
South Africa19%
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Contribution to the Community (AUD $m Per Year)
• $100 - direct payroll costs
• $83 - to local contractors & services
• $119 - raw materials, coal, lime etc.
• $16 - rail freight contract
• $15 - State royalties
• $ 8 - State taxes and charges
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Indexed Cash Operating Cost per tonne (AUD)Constant Dollars (2003) (Base 1990)
70
80
90
100
110
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04
Index - Normalised 2003 Prices Trend
Note: 2004 indexed cost is Plan, using corporate macro assumptions.
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US GULF CAUSTIC SODA PRICING1974 - 2003
US GULF CAUSTIC SODA PRICING1974 - 2003
0
100
200
300
400
500
600
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
Data Source: Harriman Chemsult
USD
/DM
T
CONTRACT
SPOT
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$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
2002
Equ
ival
ent A
lum
ina
Pric
e ($
US)
1955 - 2002 Trend
(No Continuous Improvement)
Variation of Alumina Indicator Price in 2002 Equivalent Dollars
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Key Idea of the Business
Key objective for Worsley is to engage in continuous improvement to offset annual pre-tax cash loss of AUD 16 Million by:-
•More Tonnes•Less Cost •Improve HSE
Continuous Improvement Program
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CIP Project List - Summary (AUD 000’s)
• F.Y. 2002 (ref. 2001) One-off costs BenefitsIncreased production 24,425 11,720Reduced costs (sustainable) 2,550 12,455Reduced costs (one-off) _________ 11,720
26,975 35,895• F.Y. 2003 (ref. 2002)
Increased production 9,680Reduced costs (sustainable) 1,260 12,130
1,260 21,810• F.Y. 2004 (Plan ref. 2003)
Increased production 11,780Reduced costs 3,300 9,390
3,300 21,170• F.Y. 2004 (Plan ref. 2001)
Cumulative benefitsIncreased production 24,425 33,180Reduced costs (sustainable) 7,110 33,975Reduced costs (one-off) _________11,720
31,535 78,875
FY 02 FY 03 FY 04 (f’cast)Alumina production 3.137 3.189 3.250(Million Tonnes)
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Average Quarterly Alumina Prices (USD/t)
100
150
200
250
300
350
400
450Q
1 19
95Q
2 19
95Q
3 19
95Q
4 19
95Q
1 19
96Q
2 19
96Q
3 19
96Q
4 19
96Q
1 19
97Q
2 19
97Q
3 19
97Q
4 19
97Q
1 19
98Q
2 19
98Q
3 19
98Q
4 19
98Q
1 19
99Q
2 19
99Q
3 19
99Q
4 19
99Q
1 20
00Q
2 20
00Q
3 20
00Q
4 20
00Q
1 20
01Q
2 20
01Q
3 20
01Q
4 20
01Q
1 20
02Q
2 20
02Q
3 20
02Q
4 20
02Q
1 20
03
Metal Bulletin Spot Australian Export
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BHP Billiton Aluminium positioning in alumina
• The spot price increase is recent, with the Metal Bulletin price still at $140/t at start January; $200/t in February and $275/t in April
• BHP Billiton Aluminium’s FY2003 alumina results did not fully reflect this price improvement due to:• Only relatively recent spot price strength (some recent
high prices offset by earlier weak prices)• Modest available FY 2003 spot tonnages (legacy
contracts pre Worsley and post Worsley acquisition obligations)
• Stronger USD/AUD, lower FY 2003 MRN dividend and lower prices
• Alumina market fundamentals look set to remain firm• BHP Billiton Aluminium aims to participate fully in any
alumina price improvement, allowing for pre-existing contracts
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Refinery expansion options
• Committed Paranam expansion – BHPB share 112ktpa for $29m
• Worsley feasibility study – BHPB share 215ktpa for $103m
• Stage 2 Worsley expansion to beyond 4mtpa
• Alumar optimisation & brownfield potential – BHPB share 600ktpa
• Suriname greenfield refinery potential using Bakhuisbauxite
• M&A & greenfield options, which are kept under active review
Worsley Alumina Pty Ltd32