India - Securing Coking Coal Supply

• Further development of domestic coking coal reserves can ease the

situation somewhat

• Captive coal mining introduced in 1993

• But there are significant hurdles in domestic captive coal block

development

Time consuming processes for environmental & forest clearances

Problem of land acquisition – Resettlement and Rehabilitation

issues

Joint allocation of mines

Inadequate experience in mine development of the private players

Slow progress in domestic market mine development has compelled

steel and merchant coke producers to look overseas for coal assets

Met Coke demand is expected to rise by 150 to 200 MTPY in next 10 years going by growth projections in BRIC countries

World Met Coke Market

WORLD MET COKE EXPORTS

• Though Chinese coke

availability increased in

2010 over 2009, it is much

below the requirement

• Most of the Chinese Coke

went to Japan (approx 60%)

• Japanese export declined in

2010

• Columbia - a new entrant

exporting to Brazil & India

• India though is a major net importer, has been

exporting to Brazil, Japan and SE Asian Countries

WORLD MET COKE IMPORTS

• Imports recorded a considerable increase in 2010 over 2009

• Japan, USA, Germany and Brazil had impressive import demand –

indicating renewed buoyancy in the economy post recession

• However the import levels were much below the highs of 2008

• Indian imports remained almost stable

MET COKE PRICES ON THE HIGH –

FOLLOWING THE TREND IN COKING COAL PRICING

200

300

400

500

600

700

800Met Coke Price Movement (US$ / tonne)

Scenario Evolving – Met Coke Globally

• 40% export tax levied by China since August 2008 - production of coke for a

surplus for export is discouraged

• With Chinese Coke away from the market, a likely shortage of coke from

2011 – Difficult to meet the increasing demand supply gap

• Coke supply from other sources - e.g. Poland, Russia, Ukraine, Colombia,

Japan - has little potential for increase in future. These sources are

primarily in the western hemisphere, whereas demand is growing faster in

the eastern hemisphere.

• Once coke trade returns to levels of around 30 MTPA (say by 2012), it is

difficult to comprehend how other countries would meet the shortfall of

China’s 14 MTPA export capacity

The Indian Scenario

• India would continue to remain one of the largest markets for met coke

• Imports are primarily from Russia, Ukraine, Vietnam and recently Poland

and Columbia

• Upward pressure in the market has already built up on increase of

coking coal prices and its scarcity – Prices rising

• Large merchant coke demand from pig iron, ferro alloys and soda ash –

would remain in future

• Expected addition of another 4 MTPA coke capacity by 2013 – 14 to

cater to the :

▫ Increasing steel making capacity

▫ Export market by tapping the void created by China

INDIA AS A COKE EXPORTER

• Tapping The Huge Void - In 2007 Chinese export was 15 MT which got

reduced to 12 MT in 2008 and in 2009 it stood at just over an ½ MT,

recovering to just 3 MT in 2010

• Why India? At first glance not a natural coke exporter due to:

– Poorer quality coking coals

– Strong domestic demand growth

– Traditional significant coke importer

– Limited deep water ports

• However, some advantages

– Rapidly growing merchant coke producer

– Adoption of quick to build non recovery, heat recovery ovens

– In between Atlantic and Pacific markets

– Has already sold coke to Brazil, Japan, SE Asian and European

countries

SECTION B

GUJARAT NRE COKE LIMITED

GUJARAT NRE COKE LIMITED - A SNAPSHOT

Largest independent producer of Metallurgical Coke in India

Listed on the Bombay and National Stock Exchanges, with a market

capitalisation of around USD 0.65 billion (No. of shareholders 1,80,000)

Profit earning and dividend paying with strong financials and credit

rating of AA- for long term borrowing and PR1+ for short term

borrowing.

Met Coke capacity 1.434 million tons, being increased to 4 million tons

by 2014/15.

The only Indian Company to have exported LAMC from India (to

Argentina, Brazil, South Africa & Europe).

Strong focus on the Environment with ISO 14001:2004 & OHSAS

18001:1999 certification

Rated one of the top 10 company by 10-years profit performance in the

latest edition issued by Business Today on India’s Most Valuable

Companies

GNCL OPERATIONS…

HARD COKING COAL

(NSW, AUSTRALIA)RESERVES 125 MMT

RESOURCES 651 MMT

LOW ASH

METALLURGICAL COKE

1.434 MMTPA

Gujarat NRE Coking Coal Limited(ASX: GNM)

Reserves(Resources)

NRE NO. 1 – 92 (314) million tonnes

NRE Wongawilli – 33 (337) million tonnes

STEEL UNITTMT BARS : 0.311 MMTPA

BHACHAU UNIT0.324 MILLION MTPA

KHAMBALIA UNIT0.358 MILLION MTPA

(Leased)

AT DHARWAD0. 324 MILLION MTPA

AT BHACHAU0. 180 MILLION MTPA

Waste Heat Recovery

Power Plants

Khambhalia* 15 MW

Bhachau* 15 MW

Dharwad* 30 MW

Total 60 MW

Wind Power 87.5 MW

In Australia In India

Coal Washeries

(MTPA)Khambhalia 0.75

Bhachau 0.75

Dharwad 0.90

* Under implementation

DHARWAD UNIT0.248 MILLION MTPA

BOARD OF DIRECTORS

Mr. Girdharilal Jagatramka

Chairman Emeritus

•The main promoter of GNCL. Has more than five decades of businessexperience

Arun Kumar Jagatramka

Chairman & Managing Director

•25 years of professional and management experience

•All India 1st rank gold medalist Chartered Accountant

•Director of Pike River, Port Kembla Coal Terminal, NSW MineralCouncil and Australian Coal Research Association

•Appointed as an honorary NSW Sydney Ambassador to India

Mrs. Mona Jagatramka

Non-Executive Director

• 10 years of experience in management and administration

• Active in the management & human resources for Gujarat NREGroup

• Also on the board of Gujarat NRE Coking Coal Limited

Dr. Mahendra Kumar Loyalka

Non-Executive Director

• Leading medical practioner

• Past District Governor of Lions Club International

BOARD OF DIRECTORS (contd..)

Mr. Chinubhai R Shah

Non-Executive Director

• Former President of ICSI

• At present on the Board of Nirma Ltd., Adani Power Ltd., CadilaPharmaceuticals Ltd., Apollo Hospitals International Ltd., GujaratState Electricity Corpn. Ltd., etc.

• Also the Chairman of India Renal Foundation.

Dr. Basudeb Sen

Non-Executive Director

• Former CMD of IIBI

• Former Executive Director of UTI Mutual Fund.

• Holds directorship of various reputed Listed Companies viz. ITC Ltd.,South Asian Petrochem Ltd., etc.

Mr. Murari Sananguly

Non-Executive Director

• Former CMD of Kudermukh Iron Ore Company Ltd.

• Presently on the Board of Coal India Ltd.

Mr. Subodh Kumar Agrawal

Non-Executive Director

• Eminent Chartered Accountant

• Presently Member of Central Council of ICAI.

• Chairman, Committee for members in Industry (ICAI)

Sl. No.

Particulars % of Holding

1 Promoter Group 45.93

2 Banks, Mutual Funds & FIIs 31.61

3 Indian Public and others 22.46

Total 100.00

Listed on BSE & NSE

Script Code:

• For Ordinary Equity Shares: BSE – 512579 ; NSE - GUJNRECOKE ISIN no. - INE110D01013

• For B Equity Shares (DVR Shares) : BSE – 570003; NSE - GUJNREDVR ISIN no. - IN9110D01011

Face Value : Rs. 10 per share

Market Capitalization: Approx USD 0.65 Billion

SHAREHOLDING PATTERN

45.93%

22.46%

31.61%

Promoter Group

Banks, Mutual Funds & FIIs

Indian Public & Others

India’s largest independent producer of Metallurgical Coke

Total Capacity of1.434 million tonnes per annum

GUJARAT NRE COKE LTD

Unparallel Creator of Wealth

Generator of Employment

Over 100% compounded annual return

delivered to an investor

0

200

400

600

800

1000

1200

1400

1600

1800

Year Ended

31.03.2007

Year Ended

31.03.2008

Year Ended

31.03.2009

Year Ended

31.03.2010

Year Ended

31.03.2011

(Unaudited)

Rs

. In

Cro

res

Turnover EBITA

PERFORMANCE OF LAST 5 FINANCIAL YEARS

-120

-100

-80

-60

-40

-20

0

20

40

60

Dec

08

Mar

09

Jun

09

Sept

09

Dec

09

Mar

10

Jun

10

Sept

10

Dec

10

Mar

11

PAT (in Rs Cr)

GNCL PAT over last 10 Qtrs

Dec 08 to Mar 11

Cumulative 4 Years PAT

255.81

384.77 387.97 385.39 430.47

0

50

100

150

200

250

300

350

400

450

500

31st March 2007

31st March 2008

31st March 2009

31st March 2010

31st March 2011

PAT (in Rs Crores)

42

SECTION C

GUJARAT NRE COKING COAL LIMITED

GUJARAT NRE COKING COAL LTD OVERVIEW

ASX listed hard coking coal producer

» Market capitalization of ~A$0.66 billion

100% owner of two underground mines

in NSW, Australia

» NRE No. 1 & NRE Wongawilli

JORC reserves of 125 Mt and

resources of 651Mt

Majority of ROM coal sold under

contract to major shareholder (Gujarat

NRE Coke)

» Commercial terms based on market

formula

Targeting to increase ROM production

to 6.0Mtpa over the next 4 years

Wollongong

Kiama

Port Kembla

Port Kembla coal

loader 18 MtpaSutton

Forest

proposal

Berrima

Dendrobium

W. TahmoorAppin

Westcliff Northcliff

Southern

Coalfield

NRE No. 1

NRE WONGAWILLI

BHP Illawarra

Coal

Peabody

Metropolitan

Xstrata

Tahmoor

Capital structureKey shareholders

As at 18th May 2011

OWNERSHIP & CAPITAL STRUCTURE

Source: Yahoo Finance

LTM share price performance