Clean Energy Roundtable: Presentation to Minister Goyal 27 th October 2016 “Bridging the gap between today’s use of resources and tomorrow’s zero - emissions future”
Core Technology Solutions Innovative resource Unique low rank coal drying technology - Coldry upgrading and conversion H 2 O ˃ IP owned 100% by ECT and protected in all major markets technologies ˃ World’s most efficient pre -drying process for high moisture content coals Minerals processing ˃ Enables low-rank coal use in downstream conversion process for high technologies focused on value products and applications transforming low-value resource streams into higher grade, ˃ Outstanding environmental credentials including a zero net CO 2 footprint valuable products delivering from the process positive economic, energy, ˃ Construction-ready designs for first commercial scale plant ready to go resource and environmental security outcomes. Primary iron processing technology – Matmor Fe ˃ Intellectual property owned 100% by ECT ˃ Integrates with Coldry which acts as the feedstock preparation stage ˃ Reduces manufacturing costs through use of low cost, abundant [non-traditional] raw materials ˃ Reduces energy costs through innovative thermo-chemical pathway (impact embedded in manufacturing costs above) ˃ CO 2 emission reduction help deliver lower emissions intensity Confidential Information | 2
Our Partners Projects & Engineering Corporate & Business Services Technology Development Confidential Information | 3
Matmor Process vs. Blast Furnace Matmor Process Low rank coal ˃ Lower Cost ˃ Simpler Steel Refining Iron Direct Reduced ˃ More flexible Coldry Process Matmor Process Electric Arc Oxide Iron Pellet Furnace ˃ Less CO 2 Flux ˃ Lower cos ost inputs Environmenta Env tal Imp mprovement Efficient Ef Prod Pr oduct: ˃ Utilise domestic Eliminates: Lower temperature than Blast Tailored to the same specification Furnace: as traditional processes delivering raw materials ˃ Sinter plant ˃ Lower capex the desired grades of iron and ˃ Utilise waste ˃ Coke ovens grade ore ˃ Associated CO 2 emissions ˃ Lower maintenance cost steel for various applications. ˃ Economic at smaller scale Blast Furnace Coking Coke Ovens Coal Steel Refining Iron Sinter Pig Blast Furnace Basic Oxygen Oxide Plant Iron Furnace Flux Confidential Information | 4
India Project Objective: ˃ Development of an integrated Coldry demonstration + Matmor pilot facility in India ˃ Launchpad for global commercial rollout Partners: ˃ NLC India Limited is the custodian of India’s lignite resources, and project host ˃ NMDC Limited is India’s largest Iron ore miner ˃ Both companies are PSUs ˃ Combined market capitalization in excess of A$10Bn Location: ˃ Neyveli, Tamil Nadu ˃ ~2.8GW power station ˃ ~25m tpa mine output TEF Study: ˃ Completed in H1 2016 ˃ Led by MN Dastur ˃ Projected Commercial scale benefits to underpin R&D investment decisions ˃ Decision made! Move forward with the project Confidential Information | 5
TEF Study - Benefits vs Blast Furnace Critical Raw material prices have moved; mainly Coking coal. Basis of TEF study was F2015/16 average, here presented vs. Current Spot Key message – Decoupling from traditional raw materials strengthens resistance to inherent price volatility Traditional ECT Traditional ECT BF F - BOF C/M - EAF AF BF F - BOF C/M - EAF AF Blast Furnace - Basic Coldry / Matmor - EAF + Blast Furnace - Basic Coldry / Matmor - EAF + Oxygen Furnace Power Generation Oxygen Furnace Power Generation Cas ase / Sce Scenario Base Case Mid Case Base Case Mid Case Crore ₹ Crore ₹ Crore ₹ Crore ₹ CAP APEX 2,522 1,607 2,522 1,607 OPEX EX 969 1,002 1,485 1,022 SALE ALES 1,264 1,307 1,330 1,376 Gross s Profit 295 305 -155 354 IRR RR (un (ungeared) 9.1% 17.2% negative 20.0% IRR RR (gea eared 30 30%) 7.7% 18.4% negative 22.1% 2015/16 average pricing drivers: 2016 late October spot price: ˃ Coking coal - $US 85 FOB ˃ Coking coal - $US 245 FOB ˃ Other factors include Ore (Lump & Fines), plus ˃ Also, escalation of Ore & Steel (less significant) Steel market price Confidential Information | 6 Currency: Indian Rupees
India Project Pathway ˃ Demonstrate as a platform for subsequent larger scale Commissioning, operations commercial roll out and validation 2018 ˃ ‘Demonstration’ achieves: Financing, Construction ˃ Capital defined Project Agreements 2017 ˃ O&M capability displayed ˃ Product quality, value and use validated Construction Tripartite Collaboration Preparation Agreement ˃ Business model proven 2016 Matmor Pilot Plant Development Program 2015 Partnership Approvals Integrated Plant Proposal 2014 Coldry EPC Partner Coldry Feasibility Study 2013 Complete Coldry Module Design Confidential Information | 7
ECT ˃ ECT ˃ We commercialise innovative technologies to increase the economic and environmental benefits derived from low grade, low rank and waste resources ˃ India focus ˃ New technologies supporting sustainable development and self sufficiency ˃ ‘Make in India’ – Strong local engineering and project partners ˃ Commercialisation Strategy ˃ Broad global application following demonstration in India Confidential Information | 8
Thank you. Glenn Fozard Chairman glenn.fozard@ectltd.com.au +613 9939 4595 Ashley Moore Managing Director ashley.moore@ectltd.com.au +613 9939 4595
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