Tavan tolgoi

Report
ERDENES
TAVAN
TOLGOI
Tavan
Tolgoi
Project
POWER PLANT PROJECT
Company snapshot
Overview
Location
- Erdenes Tavan Tolgoi JSC (“ETT”) is a Mongolian coal
producer and developer
- ETT holds mining licenses covering 94% land area of
Tavan Tolgoi coalfield
- The deposit has 7.4Bt of Measured, Indicated and Inferred
coal resources (inclusive of reserves) and 1.8Bt of Proven
and Probable coal reserves in accordance with JORC
- ETT commenced commercial production in July 2011
- Has ambitious plan to become a large scale regional
producer and exporter of high quality washed coking and
thermal coal products to Chinese and North Asian markets
- 200km north of the Mongolian-Chinese border
Corporate structure
Government of Mongolia
100%
Erdenes MGL LLC
100%
Erdenes Tavan Tolgoi JSC
Erdenes Oyu Tolgoi LLC
2
Tavan Tolgoi coking coal deposit
Tavan Tolgoi is one of the largest developing
coking coal deposits in the world
3
Deposit reserves
West Tsankhi Block
1204 M tons*
65 % coking coal
Resource estimated by JORC code
East Tsankhi block
1078 M tons*
78 % coking coal
South-western
Coalfield
Bor tolgoi
287А
11977А
11945А
Borteeg
Coalfield
Tavan Tolgoi JSC
Eastern Coalfield
Measured
Indicated
Inferred
Daitsuki LLC
Coking coal accounts for 73% (5,407 Mt) of total resources,
and thermal coal for 27% (1,975 Mt).
4
Mine planning - East Tsankhi
•
•
•
Full capacity of the mine – to mine 20 million tons per year
To mine it for no less than 50 years
The project will reach full capacity in 2016-2017
Mine production plan
Ukhaa Khudag
2011:
1 Mtpy
2012:
3-4 Mtpy
Eastern Tsankhi
2013:
Western Tsankhi
7 Mtpy
2014:
10 Mtpy
2015:
Mine of Tavan Tolgoi JSC
Bor Teeg coalfield
Eastern coalfield
15 Mtpy
2016/2017:
20 Mtpy
5
Erdenes TT operation highlights
 The mining operation and box-cut has commenced in August 27,
2010
 Coal export began in August 4, 2011
Coal production and operation
 1 million tonnes ROM mined in 2011
 About 4.1 million BCM overburden stripping
Off-take agreement
 Erdenes TT has signed on July 26, 2011 Coal supply and purchase
agreement with Aluminum Corporation of China
 Companion MoUs with Jinan Iron and Steel, Itochu, Mitsui and
KORES to take washed coking coal from Chalco
Contract Mining
 Macmahon Holding (Australia) and BBM Operta (German) JV
engaged
6
IPO on International Stock Exchange
Consultants on IPO of part of Erdenes Tavan Tolgoi JSC shares
• International investment banks:
Goldman Sachs (USA)
Deutsche Bank (Germany)
Global coordinators
BNP Paribas (France)
Macquarie (Australia)
• International audit firm, tax advisor and reporting accountant
•
PriceWaterhouseCoopers (PWC)
• Technical and resource consultant
•
Norwest Corporation (Canada and USA)
• Legal Consultant
•
Norton Rose and Hogan Lowells
• Industry consultant
• Wood Mackenzie
7
COMPANY HIGHLIGHTS
1
World class coking coal deposits capable of supporting large scale, long life mining operations
2
Favourable geological conditions and open-cut mining result in competitive cash cost position
3
Capacity to produce premium quality hard coking coal products
4
Secured coal off-take agreement with major international company
5
Strong growth profile, targeting 20Mtpa ROM production from East Tsankhi by 2017
6
Located in proximity to key target markets in China and potential markets in North Asia
7
Experienced management team
8
Development of Tavan Tolgoi is a strategic national priority of the Mongolian Government
8
2012 Development Projects
Initial
Public
Offering
Power
Plant
Water
supply
70 km
pipeline
300 MW
Railway
Coal
Handling &
Preparation
Plant
Northeast &
South
Road
TT-Gashuun
sukhait
9
In year 2012
Key development - Infrastructure
Road from East Tsankhi to Gashuun Sukhait
•
•
Cabinet has approved construction of a paved road, parallel
to the MMC road.
Commencement of construction in May 2012, and
commissioning 2014.
Sainshand
Water Supply
•
•
•
•
Cabinet approved water use permit for Balgasyn Ulaan Nuur
(BUN) ground water resource (~70km from the mine site).
Commencement of the water supply project construction in
April 2012.
Plan completion of bore field and water supply pipeline by 2Q
of 2014.
A major water exploration program is planned to verify BUN
capacity and productivity and to identify additional resources
for possible long term requirements
Zuunbayan
Dalanzadg
ad
Tavan Tolgoi
Oyu
tolgoi
Balgasiin
Ulaan Nuur
Zamiin-Uud
Khangi
Gashuun
sukhait
Railway
• Rail development issues remain with Government/MTZ
• Proposals to link Tavan Tolgoi to both the Northeast and
South
• Company position is to support both options, increasing
flexibility
10
Key developments - Plants
In year 2012
Coal Handling and Process Plant (CHPP)
•
•
•
CHPP complex to be constructed as 2 x 10Mtpa modules, and
commencement of construction in July 2012.
Commissioning of first 5 mtpa module in June 2014, and second 5
mtpa in November 2014.
CHPP ramping up to processing 20Mt of ROM coal per year in 2017
Power Supply
•
ETT has received Government’s approval to build and operate the
300MW coal fired power plant at Tavan Tolgoi.
•
Currently using diesel generator at mine site with plan to connect to
the MMC’s 18MW power plant that provides sufficient supply for the
ETT’s operations until late 2013.
•
The power plant will be sufficient to supply all of East and West
Tsankhi operation at steady state production with excess capacity to
be sold to Mongolian grid or China.
•
Connection to the Central grid at Mandalgovi.
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POWER DEMAND - Tavan tolgoi
Eastern side of Tsankh of Tavan Tolgoi deposit need power supply of 85Mw, as
well as western side of Tsankh of Tavan tolgoi deposit.
№
Content
Power measurement
1.
Mining
55.0 MW
2.
Concentrator
25.3 MW
3.
Water supply
0.8 MW
4.
Mining and Production facility
1.4 MW
5.
Social facility
1.0 MW
6.
Inefficiency
0.8 MW
Total
West Tsankhi
Total
83.5 MW
85 MW /est./
170 MW /est./
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ETT - Recent activities
 Implemented preliminary report of Feasibility study of 300MW power plant
construction project.
 Under finalization of Feasibility study and preparation to get approval from
Mongolian Science and technology committee within June of 2012 .
 Selected power plant construction site and commenced geodesy research.
 Commenced Engineering and geology research and environment impact
evaluation study.
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Indicative Financing TIMETABLE
Date
Event
May
 Project kick off, Appoint commercial, technical and legal advisers for due diligence and project development
May 2012
 Agree commercial, legal, off take and potential financing structures and terms with stakeholders
 Confirm ECA strategy and conduct initial market testing for financing
 Project technical specifications agreed
May 2012
 Financing structure developed
 Commence ECA process
 Develop and finalize due diligence and process information (e.g. Information Memorandum, financial model)
June 2012
 Preferred financing structure finalized
 Financing bid materials finalized
 Commence financing process
Jul 2012
 Financing indicative bids received and shortlists prepared
Aug 2012
 ECA negotiations
 Financing final bids launched
Sep 2012
 Financing bids received and preferred financiers (debt and equity) selected
 Documentation and negotiations of financing documents
Sep 2012
 Financial close
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THANK YOU
Jigjidjav 6, 1st khoroo, Chingeltei district
Ulaanbaatar, Mongolia
Tel: (976) 7011-8585
Fax: (976) 7011-0725
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