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Global Coal Industry Trends,From an Australian Perspective
Ken Talbot Chief Executive Officer - Macarthur Coal Limited
6 April 2006
da
a and China
al Trends
arthur Coal Profile
clusions
This material may contain information derived from publicly available sources that have not been independently verified. No representation or warranty is e accuracy, completeness or reliability of that information. Statements contained in this material are or may be forward looking statements, including
ng the possible or assumed future financial performance, production levels , prices, reserves, potential growth of Macarthur Coal Limited, industry growth projections and any estimated company earnings Any such forward looking information involves risks and uncertainties and has been prepared on the
1. India & China – A Perspective
Western Europe11%
Anglo-economies0%
Eastern Europe2%
Russia2%
Latin America2%
China26%
India32%
pan%
gypt2%
Africa5%
Rest17%
… The Minerals/Coal Industry
‘The Map that Changed the World’
By Simon Winchester
Completed by just one man
W Smith – 1 August, 1815
….The Minerals/Coal Industry
Australian Coal Industry
Rich History
covered by Captain Cook, 1770 in a cliff south of Sydney led Coal Cliff)
l Cliff Mine closed in the 1980’s after approximately 100 years of ing
tralia has some rich coal depositsExample – Bowen Basin, Queensland
Australian Coal Industry
2. Global Trends
th of Steel Market to Accelerate
Total World - Crude Steel Production for the period 1995 - 2004
00
00
00
00
00
00
00
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
ROW
China
Other Asia
Taiwan
India
Japan
Other Americas
Brazil
Other Europe
Europe - 15
ing Markets Dependent on Australian Raw Materials
Domestic Resources
Iron Ore Coal
China Weak Strong
India Strong Weak
Brazil Strong Nil
Japan Nil Nil
Korea Nil Nil
Europe Nil Nil
olidation of Ownership
Steel Industry Customers
eg Automobile Industry
Steel
Producers
Global Majors -
Raw Materials
Do Our Customers Want?
onger coke to support larger blast furnace operation
urity of coke and coking coal inputs
g term cost competitive coke through lowering the cost of raw terials inputs
m line
t type ovens being superseded by heat recovery type ovens
cess time – a defining factor
ging Technology
Coke Making Trends cont’d
V’s
ging Technology
wing demand for electricity (China – a great example)
wing demand for oil and gas keeping prices up
nufacturers publicly advising switch from gas to coal
asing Demand for Electricity to Provide a Floor for Thermal Coal
asing International Cost Base
Dragline
Pre-strip
Overburden
Mining Pit
Coal Seam
Surface
challenges that don’t change
Boss, we’re just doing our job
Making room for young people and retaining experience
w challenges
People/skills shortage
Quality of Management
Health and Safety
Management of some contractors
tom line
We still expect innovation
nisations Continuing To Change
3. Macarthur Coal Profile
d of Directorsabella Coal Mine, Queensland
marks of Macarthur Coal
Dominant global supplier of low volatile PCI coal
Consistent Strategy
Production capacity developed ahead of boom
Big exploration program
Substantial growth foreshadowed
Competitive operating cost structure
Strong balance sheet
4. Conclusions
usionsusions
erals boom implies focus on revenues
t of doing business equally important
lb i i l b