Vedanta - Zinc Day Hindustan Zinc Limited 30 August, 2017 V E D A N T A | Z I N C – L E A D – S I L V E R | O I L & G A S | A L U M I N I U M | C O P P E R | I R O N O R E | P O W E R
Cautionary Statement and Disclaimer The views expressed here may contain information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness, reasonableness or reliability of this information. Any forward looking information in this presentation including, without limitation, any tables, charts and/or graphs, has been prepared on the basis of a number of assumptions which may prove to be incorrect. This presentation should not be relied upon as a recommendation or forecast by Vedanta Resources plc and Vedanta Limited and any of their subsidiaries. Past performance of Vedanta Resources plc and Vedanta Limited and any of their subsidiaries cannot be relied upon as a guide to future performance. This presentation contains 'forward-looking statements' – that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as 'expects,' 'anticipates,' 'intends,' 'plans,' 'believes,' 'seeks,' or 'will.' Forward – looking statements by their nature address matters that are, to different degrees, uncertain. For us, uncertainties arise from the behaviour of financial and metals markets including the London Metal Exchange, fluctuations in interest and or exchange rates and metal prices; from future integration of acquired businesses; and from numerous other matters of national, regional and global scale, including those of a environmental, climatic, natural, political, economic, business, competitive or regulatory nature. These uncertainties may cause our actual future results to be materially different than those expressed in our forward- looking statements. We do not undertake to update our forward-looking statements. We caution you that reliance on any forward-looking statement involves risk and uncertainties, and that, although we believe that the assumption on which our forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate and, as a result, the forward-looking statement based on those assumptions could be materially incorrect. This presentation is not intended, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities in Vedanta Resources plc and Vedanta Limited and any of their subsidiaries or undertakings or any other invitation or inducement to engage in investment activities, nor shall this presentation (or any part of it) nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision. 2
Agenda 04 01 Corporate Overview Resource- Amitabh Gupta, CFO Driven Growth Scott Caithness, Head Exploration 02 05 Social Responsibility – Silver – Giving Back Fastest Growing Portfolio Neelima Khetan, Head CSR Sunil Duggal, CEO 06 03 Way Forward Delivering 1.2 mtpa Sunil Duggal, CEO Naveen Singhal, Director Projects Q&A 3
01 Corporate Overview Amitabh Gupta, CFO
Corporate Overview 2 nd largest zinc-lead miner globally with 12 million+ MT of ore production capacity Rampura Agucha: 2 nd largest zinc mine globally 4 th largest zinc-lead smelter globally: 1 million+ MT of production capacity 18 th largest silver producer of the world* One of the lowest cost zinc producers in the world 3 mines with five-star ratings by Indian Bureau of Mines Vision: To be the world’s largest and most admired zinc -lead & silver company Rankings source: (1) Wood Mackenzie, Long-Term Outlook Q2 2017 (2) For HZL related data, actuals for FY 16-17 * Source : Thomson Reuters 5
What Differentiates Us? Core Strengths Among the Lowest Cost Producers of Zinc Zinc Mine Composite Costs Curve Captive mines with R&R base of 2500 1 404.4 million MT ensuring mine life of 25+ years 2250 Peer 5 2000 C1 Cash Cost ($/t Zn) Peer 4 Peer 3 1750 Peer 2 Integrated metal production Hindustan Zinc 1500 supported by captive power 2 plants 1250 Peer 1 1000 750 Low cost of operations driven 3 by quality assets and recovery 500 from waste 250 0 0 10 20 30 40 50 60 70 80 90 100 Market leadership in India with Cumulative Production (Percentile) strong presence in emerging 4 economies of Asia Note: C1 cash cost includes by-product credits Source: Wood Mackenzie Research (Q2 2017) Leading the Way with Fully Integrated Operations 6
Safety & Environment – Vision Zero Harm LTIFR Trend Water Conservation Specific Water Consumption (M 3 / MT of MIC) Zero discharge • 14.56 13.78 13.70 33% total water • requirement met from recycling/ reuse water (2017) Water CDP • 15-16 16-17 17-18 (Target) disclosure 2017 Climate Change & Energy 127% increase in lead indicators reporting last 2 years Specific Energy Consumption (GJ / MT of MIC) • 10 UNFCCC projects • 23.49 21.33 21.30 Zero occupational illness cases • 325 MW green power • Safety perception score improvement from 62% to 88% • 9% specific energy • reduction (2017) LTIFR Benchmarking CDP disclosure 2017 • (One million man-hours) & Scope 3 GHG 1.85 15-16 16-17 17-18 (Target) emission 1.40 1.30 Waste Management 1.20 Fumer project for Total Waste Generation (Million MT) • 75 waste minimisation 0.49 Paste fill plant at 0.39 • 49 0.30 44 SKM and RAM UG Focus on value • HZL Vedanta Glencore Rio Tinto Vale Anglo Antofagasta Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 from waste Xstrata American Paver block from • Source: SD report 2016 of all companies 15-16 16-17 17-18 (Target) waste *Waste includes mining waste 7
Portfolio of Tier - 1 Assets Rampura Agucha Mine Reserves : 49.7 mn MT Resources : 50.3 mn MT Chanderiya Smelting Complex Reserve Grade : Zn 13.9%, Pb 1.9% Current Ore Capacity : 6.15 mtpa Pyrometallurgical Lead Zinc Smelter : 1,05,000 MTpa zinc and 35,000 MTpa lead Kayad Mine Hydrometallurgical Zinc Smelter : 4,20,000 MTpa zinc Reserves : 5.4 mn MT Resources : 1.7 mn MT AusmeltTM Lead Smelter : 50,000 MTpa lead Reserve Grade : Zn 7.8%, Pb 1.1% Captive Power Plant : 234 MW Current Ore Capacity : 1.00 mtpa Dariba Smelting Complex Sindesar Khurd Mine Hydrometallurgical Zinc Smelter : Reserves : 35.6 mn MT 2,10,000 MTpa zinc Resources : 87.2 mn MT Reserve Grade : Zn 4.2%, Pb 2.9% Lead Smelter : 1,00,000 MTpa lead Current Ore Capacity : 4.50 mtpa Captive Power Plant : 160 MW Rajpura Dariba Mine Zinc Smelter Debari Reserves : 9.0 mn MT Hydrometallurgical Zinc Smelter : Resources : 50.3 mn MT 88,000 MTpa zinc Reserve Grade : Zn 6.3%, Pb 1.5% Current Ore Capacity : 0.90 mtpa Pantnagar & Haridwar Zawar Mining Complex Processing and refining of zinc, lead and silver Reserves : 9.5 mn MT Resources : 85.7 mn MT Reserve Grade : Zn 3.3%, Pb 1.8% Renewable Power Current Ore Capacity : 4.00 mtpa Wind: 274 MW CPP : 80 MW Solar: 16 MW Waste heat recovery: 35 MW 8
Strong Track Record of Growth Reserves & Resources (mn MT) – 2.5X Growth Mined Metal (kt) – 3X Growth 404 907 390 887 889 880 870 375 840 365 830 348 769 332 735 113 151 110 106 145 313 88 92 299 629 86 272 84 572 532 232 78 295 210 283 267 67 261 239 409 178 223 60 165 216 364 197 146 183 298 54 765 770 774 752 756 739 744 152 47 683 651 133 36 109 551 98 505 472 92 355 317 262 109 110 104 108 107 109 102 97 89 77 80 69 67 54 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 MIC - Zinc MIC - Lead Total Mined Metal Reserve Resource Net R&R Ore Production (mn MT) – 3.5X Growth Silver Metal – Integrated Saleable (MT) – 9X Growth 453 422 301 288 266 202 148 139 105 80 51 47 35 24 11 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 Multi-fold growth since disinvestment 9
Robust Financial Performance EBITDA PAT Cash & Cash Equivalents* Rs. bn Rs. bn Rs. bn 400.00 90.00 Special 80.00 350.00 Dividend payout 70.00 300.00 60.00 250.00 50.00 200.00 40.00 150.00 30.00 100.00 20.00 50.00 10.00 - - FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 *net off dividend accounts & temporary borrowings; includes investments at fair value & interest accrued thereon EPS Market Cap LME Price Rs. Rs. bn $/MT 25.00 1,400.00 4,000 Zinc LME 1,200.00 3,500 Lead LME 20.00 3,000 1,000.00 2,500 15.00 800.00 2,000 600.00 10.00 1,500 400.00 1,000 5.00 200.00 500 - - - FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 EBITDA CAGR 28% despite Zinc LME growth of only 7% 10
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