JSPL MOZAMBIQUE MINERAIS LIMITADA

CHIRODZI COAL MINE DEVELOPMENT

6TH ANNUAL MOZAMBIQUE COAL

SUMMARY

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JINDAL GROUP OVERVIEW

CHIRODZI COAL MINE PROJECT

Resources and Mine Planning

Milestones

CHALLENGES

Logistic Infrastructure

International Coal Marketing

Institutional Framework

LONG TERM PERSPECTIVES

JINDAL GROUP OVERVIEW

JSPL GROUP

4

JSPL is an industrial powerhouse with a dominant presence in steel, power, mining and infrastructure sectors, part of the US $ 18 billion OP Jindal Group.

JSPL operates the largest coal-based sponge iron plant in the world and has an installed capacity of 3 MTPA (million tonnes per annum) of steel at Raigarh in Chhattisgarh.

The company produces economical and efficient steel and power through backward and forward integration and has committed investments exceeding US $ 30 billion in the future with several business initiatives running simultaneously across continents.

OPERATIONS

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4.5 MTPA steel;

18 MTPA Iron ore and Coal Mining;

2.437 MW Power Generation;

1.5 MTPA Hot Briquetted Iron;

5.5 MTPA Pellet Plant.

NEW/EXPANSIONS

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24 MTPA steel;

5.342 MW Power Generation;

10 US$ billion Coal to Liquid Project

CHIRODZI MINES | 2014

CHIRODZI MINES | 2014

GLOBAL FOOTPRINT

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EXPLORATION/DEVELOPMENT

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–Oman (Steel) –Mauritania (Iron Ore) –Senegal (Power) –Cameroon (Iron Ore) –Namibia (Iron/Manganese –Botswana (Coal) –South Africa (Iron Ore) –Madagascar (Lime Stone) –Indonesia (Coal)

CHIRODZI COAL MINE PROJECT

Resources

Products

Milestones

PROJECT LOCATION

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PROJECT LOCATION

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PROJECT BRIEF

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– Prospecting License 1218L

– Mining License 3605C

– Concession Area 215.4 Km2

– Coal Bearing Area 44.74 Km2

GEOLOGY

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GEOLOGICAL RESOURCES – 2 BILLIONS TONS

RESOURCES

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SEAM MEASURED INDICATED INFERRED TOTAL (MT)

L - - 9.60 9.60

K 0.10 - 12.90 13.0

J 6.80 - 48.00 54.80

I 1.50 - 9.40 10.90

H 10.10 9.60 9.50 29.10

G 43.80 34.00 29.40 107.20

F 34.20 34.10 24.00 92.30

E 25.70 8.70 23.30 57.70

D 36.70 10.50 60.20 107.40

C 21.30 5.60 11.50 38.40

B 27.20 10.50 41.90 79.70

A 37.20 26.20 60.50 124.00

SUB TOTAL 245.00 139.00 340.00 724.00

METHOD OF WORKING

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–Open Cast Mining

–Height of Bench – 6.0 Mt

–Width of Bench – 20 Mt

–Angle of Slope – 80⁰

–Wall Slope - 70⁰

PROCESS AT A GLANCE

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PRODUCTS

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Overall Stripping Ratio – 2.5 OB/Coal - 1

Capacity of the Plant - 400 TPH/ 3MTPA

Product from the wash Plant are

– 16 % ash cocking coal, – High grade thermal coal and – Low grade thermal coal

MILESTONES

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Mining License Obtained February 2012

Environmental Clearance Obtained May 2012

MILESTONES

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Mining Excavation Started on July 2012

MILESTONES

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Mining License Obtained in February 2012

Environmental Clearance Obtained on May 2012

Mining Excavation Started on July 2012

Coal Production Started October 2012

MILESTONES

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3 MTPA Wash Plant Wash Plant 400 TPH Commissioned February 2013

Washed Coal Production Started February 2013

MILESTONES

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Coal Transport to Beira Started March 2013

MILESTONES Vessels

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First Shipment to India May 2013

October 2014 26

Inaugration of the Mine by Honourable President of Mozambique on 14/08/2013

MILESTONES

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Railway Infrastructure Commissioned in May 2013

MILESTONES

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Resettlement Model House Finalized March 2015

CHALLENGES

Date

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MAJOR CHALLENGES

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Logistic Infrastructure;

International Market Trends;

Institutional and Regulatory Framework

TRANSPORT ROUTES

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TRANSPORT INFRASTRUCTURE

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– No rail or other economic connectivity to the Chirodzi Coal Mine Project which is located 120 Km away to the nearest rail station (Moatize) resulting in additional costs for road transport.

– Multi coal handling operations (Mine site, Moatize and Beira).

– Inadequate and inefficient ship loading system with the use of skips at general cargo quay 9.

– Demurrage costs due to delayed access to berthing facilities.

SKIP OPERATION

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INTERNATIONAL MARKET PRICES

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The falling price of coal in the international market, compounded with the high cost of inland transportation makes the operation of the Mozambican coal mining industry economically unsustainable and the Mozambican coal uncompetitive .

This as resulted in the reduction of the volumes of production and disinvestment in the industry.

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POLICY FRAMEWORK

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The tariff charged by service providers in the ports and railways sector are quite high when compared with the benchmark.

The non existence of an economic regulatory body for the sector aggravates this situation.

There is a number of fees that are charged directly or affect the prices of major consumables of the industry contributing to higher costs .

INSTITUTIONAL FRAMEWORK

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The communication between the industry and

relevant Government Ministries is weak, therefore, there is no dialogue on problems affecting the industry and the development of the country in general;

The decision process by different Government is

too slow. There is a lack of coordination among the

industry.

LONG TERM PERSPECTIVES

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49 56

63 65

84 80

28 36

42 43

63 58

0

20

40

60

80

100

2011 2013 2014 2015 2021 2021

Coking CoalDemand (MT)

Coking CoalImport (MT)

55 25 30

Total Domestic Imports

Coking Coal Market (MT),2012

45%

55%

Domestic Imports

India does not have coking coal resources to bolster its supplies and will continue to rely on imports Coking coal imports are as indispensible as petroleum imports for India

MT Nat. Steel Policy SAIL Est.

Coking Coal Scenario - India

Source: Vision 2020 document

3.2

4.8 5.1 5.1

9

12.5 12.5 12.5

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

0

2

4

6

8

10

12

14

2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20

Iron and Steel Capacity Percentage BF route (%)

51.56% 48.44%

76.00%

24.00%

Percentage BF route (%) Non BF

Sudden spike in volume requirements in the period 2015-18 as new Blast furnace based capacity progressively gets commissioned

Blast furnaces to be added in Angul and Patratu and ongoing capacity augmentation plan in Raigarh

BF route based capacity increases from ~ 52% now to ~ 76% by 2020

2013

2020

Jindal Steel & Power – Captive Requirement

39 October 2014

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In MMT FY 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20

Iron Ore 8 9 12 13 20 29 32 32

Washed Coal 2 4 5 5 5 6 6 6

Coking Coal 1.2 1.2 1.5 1.5 3.5 5.5 6.5 6.5

Limestone 0.6 0.8 0.9 0.9 1.6 2.2 2.2 2.2

In MMT FY 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20

Coking Coal 1.2 1.2 1.5 1.5 3.5 5.5 6.5 6.5

Prime Hard Coking Coal 0.6 0.6 0.75 0.75 1.75 2.75 3.25 3.25

Semi Hard Coking Coal (50:50 Blend)

0.6 0.6 0.75 0.75 1.75 2.75 3.25 3.25

Mozambique Production Phase 1 (35% Yield of 3MTPA)

0.4 1.0 1.0 1.0 1.0 1.0 1.0

Mozambique Phase 1 will be able to fulfil current JSPL Raigarh Semi Hard Coal Requirements from FY 14-15

Internal Requirements after Angul Phase 2 can be met by an additional Washery of 3-4 MTPA at Chirodzi Mine Site

JSPL – Raw Material Requirement Projections

October 2014 41

Complete Phase I and make it sustainable by bringing in operational efficiencies

Develop market for Semi Hard Coal outside of JSPL

Identify areas of low stripping ratio and better yields

Revisit the Mining Contracts where feasible

Negotiate with the Government for possible reduction in Logistic Charges

Jindal Mozambique-Way Forward

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Phase-II:

• Complete the Resource validation from Competent Persons, and an exhaustive Mine Plan

• Wait for infrastructure to be developed by the Govt. of Mozambique (Port + Railways)

• Go ahead with the setup of the Power Plant at the Mine Head depending on the PPA with the Government

• Complete Feasibility Studies for Slurry Pipeline, to ensure that JSPL is ready to start the project in case there is a delay in logistic expansion from Government

• Based on the logistic solution coming up, Jindal will decide on the expansion of the Mine and the configuration

Jindal Mozambique-Way Forward

• First Slurry Pipeline started with Coal in 1957

• Close to 8000 Kilometers of Slurry Pipeline transporting about 600 Million tons per annum of different slurries in operation around the world

• More than 60% of Iron ore transportation through Pipelines

• The Black Mesa Coal Pipeline, running over a distance of 440 Kilometers, was in operation for 37 years

• World’s largest pipeline, a 38 inch pipeline of 187 Km carrying Phosphate of 38 Million Ton per annum being constructed in Morocco

October 2014 43

Facts about Coal Slurry Pipeline

• Capacity Planned for the Pipeline: 10 Million Ton per Annum

• Both Coking Coal and Thermal Coal to be transported

• Pipeline to traverse a distance of about 490 Kilometers through the provinces of Tete, Manica and Sofala upto Port of Beira

• 3 Pump Stations are required for Transport of Coal through this pipeline; 1 at the Mine, 2 others at different locations of the route. Each Pump station will have 7 High Pressure Pumps

October 2014 44

JSPL Coal Slurry Pipeline

October 2014 45

Process Flow (Contd..)

Slurry Pipeline

•Slurry retrieved from the tanks with the Slurry Charge Pump

•The slurry is then fed into the pipeline through the Mainline pump station

Intermediate Pump Stations (2)

•One Pump station near Nhamassonge and another at Corrupita

•Each Pump Station to have 7 Pump Stations with Power Requirement of 12 MW

Discharge at Beira

•Slurry from the Pipeline to be discharged into the Slurry Storage tanks

•Moisture content of the slurry here is over 55%

October 2014 46

Process Flow (Contd..)

Dewatering and Drying Circuit

•Slurry treated through Centrifuges and Filters

•Moisture Content brought down to 16%-18%

•Coal then passed through drying kilns to reduce the moisture to 12%

Briquetting and Water Treatment Plant

•Coal is then briquetted to increase the size to +25 mm and stockpiled

•Water is then treated to make it fit for industrial use and circulate it in the city of Beira/depending on usability discharge the water into Pungue River

21.01.2011

THANK YOU

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