Gujarat NRE Coking Coal (ASX: GNM) - Mega growth plans of the Indian Steel Industry -The coking coal supply crunch - Gujarat NRE Story in Australia Arun Kumar Jagatramka Chairman, Gujarat NRE Coking Coal Ltd
DISCLAIMER This presentation contains only a brief overview of Gujarat NRE Coking Coal Limited and its associated entities (“Gujarat") a nd their respective activities and operations. The contents of this presentation, including matters relating to the geology of Gujarat’s projects, may rely on v arious assumptions and subjective interpretations which it is not possible to detail in this presentation and which have not been subject to any independent verification. This presentation contains a number of forward-looking statements. Known and unknown risks and uncertainties, and factors outside of Gujarat’s control, may cause the actual results, performance and achievements of Gujarat to differ mat erially from those expressed or implied in this presentation. To the maximum extent permitted by law, Gujarat does not warrant the accuracy, currency or completeness of the information in this presentation, nor the future performance of Gujarat, and will not be responsible for any loss or damage arising from the use of the information. The information contained in this presentation is not a substitute for detailed investigation or analysis of any particular issue. Current and potential investors and shareholders should seek independent advice before making any investment t decision in regard to Gujarat or its activities. COMPETENT PERSON STATEMENT The information in this report that relates to Mineral Resources and Reserves is based on information compiled by Mr. Kris Markowski who is a member of the Australian Institute of Mining and Metallurgy. Mr. Markowski is employed by Gujarat NRE Coking Coal Limited. Mr. Markowski has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Explorat ion Results, Mineral Resources and ore Resources’. Mr. Markowski consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.” 2
Take a hard look At good old coal
Had Coal Not been there …
Forests would have been denuded years ago, as energy hunger would have forced man to burn trees ….
The industrial revolution that transformed the planet would not have taken place
Civilisation as we know it today, would not have marched on in the pace that we have seen…
The power to transform societies, the power to transform economies, the power to control destinies, the power to hold progress by its horns would not have been witnessed
The United States, the United Kingdom, Germany, Japan and Australia would not have marched on the path of prosperity..
China and India would have remained sleeping dragons and crouching tigers
Mankind would have remained in the quagmire of lost opportunities
."with coal, we have light , strength, power, wealth and civilisation, without coal we have darkness, weakness, poverty and barbarism."
Global Climate Change is a truth that we all must face but we need to ensure that facts and figures are not used to forcefully slaughter the human civilization in a fashion similar to the Y2K scare at the beginning of this millenium which turned out to be one of the biggest hoax calls in the modern era.
What Mankind must do : Cut CO2 emissions by 50 % by the year 2050. Share Clean technologies with the 3 rd world freely
No Greenmail. No Eco Pornography. No sham. A global initiative by the brotherhood of man.
At Gujarat NRE We are already doing our bit as a socially conscious corporate citizen. Not because we were compelled but from an inner urge to be the most energy efficient, nature friendly entity.
Our Windmills Generate clean, green energy 87.5 MWs (we even earn carbon credits while doing this)
Our Coke Ovens are emission free Our Coke Oven batteries Use the waste heat to generate more power thus, earning Carbon Credits using Coking Coal
Our Establishments Have green belts around them so that the fragile eco systems we operate in are well maintained
We practice rain water harvesting so that water levels are maintained and refurbished
The threat to the environment Is from thermal coal and petroleum derivatives Burning of which causes carbon emissions As in Thermal power plants Transportation
We do neither On the contrary, we deal in the greenest variety of coal – COKING COAL It is the diet version and earns carbon credit by generating power while being converted to COKE
What is the India Story?
1) Rising GDP growth % Growth in GDP % average annual GDP growth 10 1900 – 1950 1.0 8 1950 – 1980 3.5 % growth 6 1980 – 2002 6.0 4 2002 – 2006 8.0 2 0 1900 - 1950 1950 - 1980 1980 - 2002 2002 - 2006 Sources: 1900-1990: Angus Maddison (1995), Monitoring the World Economy, 1990-2000:Census of India (2001), 2000-2005 Finance Ministry Year 2) Population growth is slowing % average annual % Gowth in Population growth 2.5 1901 – 1950 1.0 2 % growth 1951 – 1980 2.2 1.5 1981 – 1990 2.1 1 1991 – 2000 1.8 0.5 2001 – 2010 1.5 0 1901 - 1950 1951 - 1980 1981 - 1990 1991 - 2000 2001 - 2010 Year Sources: 1900-1990: Angus Maddison (1995), Monitoring the World Economy, 1990-2000:Census of India (2001)
3. Literacy is rising % Rise in Literacy % 100 1950 17 80 1990 52 % Rise 60 2000 65 40 2010 (proj) 80 20 0 1950 1990 2000 2010 Year Source: Census of India (2001) 4. Middle class is exploding % Million % Growth in Middle Class People 35 30 25 1980 8 65 %Growth 20 15 2000 22 220 10 5 0 1980 2000 2010 (proj) 2010 (proj) 32 368 Year Source: The Consuming Class , National Council of Applied Economic Research, 2002
5. Poverty is declining % Growth in poverty 1980 46% 50 2000 26% 40 2010 (proj) 16% % growth 30 20 1% of the people have been crossing poverty line each year for 20 years. Equals ~ 200 10 million. 0 1980 2000 2010 (proj) Year 6. Productivity is rising 30% to 40% of GDP growth is due to rising productivity
7. Per capita income gains (US$ ppp) % Growth in US$ PPP 3500 3000 1980 1178 2500 US$ PPP 2000 2000 3051 1500 1000 500 0 Year 1980 2000 8. India is now a global economy And it will cross Japan between 2012 and 2014 to become the 3 rd largest
Economic Indicators Economic Slowdown much flatter compared to other countries. Expectation of 7% growth in current year GDP growth rate comparison 14 12 10 8 GDP Growth in % 6 India China 4 USA 2 0 -2 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 (proj) -4 -6
The Biggest strength of Indian Model is…… Domestic led • Low Impact of global downturns • Less volatility
Drivers of the India Model Consumption led • People friendly: Consumption as % of GDP India 64 Europe 58 China 42 % Growth in Middle Class • Middle Class is Exploding 35 % Million 30 People 25 %Growth 20 1980 8 65 15 10 2000 22 220 5 0 2010 (proj) 32 368 1980 2000 2010 (proj) Year Source: The Consuming Class , National Council of Applied Economic Research, 2002 India’s success is market led. The entrepreneur is at centre of the Indian model
And a Vibrant Private Space Over 125 Indian Companies have market cap of US$ 1 billion Over 1000 Indian Companies have received FII Over 125 Fortune 500 companies have R&D bases in India Over 300 Fortune 500 companies have outsourced software development to India 4.4% bad loans in Indian banks (vs ~ over 15% in China)
What adds up to this confidence… • Even slow reforms add up - state getting out of the way • A Population Young at Age • Liberated Young Minds • Competitive advantage in the knowledge economy
The next few decades would be the India story We are the protagonists - unfolding this play
Over the next 11 years • India will continue to add to her steel making capacities • Japan will be overtaken within 2015-16 • Even the most conservative estimates aim at a whooping 3 fold increase from current levels • India’s growth is demand led as opposed to export fed • The growth will be much stable and less susceptible to external conditions…
Per capita consumption of steel • India 2001 – 26.8 kg • India 2008 – 50.4 kg • Germany – 464.4 kg • USA – 353.9 kg • China – 307.3 kg • Brazil – 114.6 kg • World average – 194.2 kg India drags the current World average down from 230 to 194 kg
The New Era of steel making dawned in 1947 India had three units Two of them in the Private Sector (TISCO & IISCO) Total Capacity 1 million tons
China too had almost similar capacities … (one million ton in 1949)
Recommend
More recommend
