Saudi Arabian Mining Co. · TADAWUL:1211
Saudi Arabian Mining — Investor Presentation (December 2005)
37 slides from Saudi Arabian Mining's investor presentation, December 2005
Slide 1: Az Zabirah Aluminium Project - Ma'aden
Campbell Smith Project Director Az Zabirah Aluminium Project Ma’aden – Saudi Arabian Mining Company
Slide 2: General Introduction
The Az Zabirah Aluminium Project in KSA. GENERAL INTRODUCTION
Slide 3: The Az Zabirah Aluminium Project in KSA
The Az Zabirah Aluminium Project in KSA. The Az Zabirah Aluminium Project in Saudi Arabia is an integrated project consisting of bauxite mining, alumina refining power generation and aluminium smelting. The intention is to import and/or mine a total of 3.4 mtpa of bauxite for an annual production of
Slide 4: Tasks Completed to Date
Tasks Completed to Date. Extensive historical exploration programmes by BRGM, Riofinex and a close spaced drilling programme completed 2002. Business planning and pre-feasibility studies. Completed supporting studies including: Detailed site selection study; Power/steam generation and desalination s
Slide 5: Tasks In Progress
Tasks In Progress Further exploration and trial mining beyond feasibility Requirements completed to justify a mine life of +60 years. Preparation of +30,000 ton bulk sample for pilot plant testing. “Bankable” feasibility study with advance engineering and procurement. Power generation enquiry using
Slide 6: Our Objectives
Our Objectives Construct a first-phase refinery to produce in excess of 1.4mtpa of alumina. Smelt the maximum possible to increase immediate returns. May commence by refining imported bauxite for many strategic reasons until the railway system is operational. Immediately consider producing a further
Slide 7: Our Advantages
Our Advantages The ability to create an integrated aluminium production facility from bauxite mining to aluminium metal and beyond. Abundant local supply of cheap energy and chemicals such as caustic soda. Strong Government support and commitment to the project. The railway is proceeding and the pro
Slide 8: Project Schedule
Project Schedule 2002 2003 2004 2005 2006 2007 Az Zabirah Study Bauxite Mine Plan Refinery Feasibility Study Smelter Feasibility Study Phosphate Synergy Study Trial Mining Grid Power Available Environmental I mpact Study Partner Acquisition Financial Closure Mine Feasibility Study Start Power Plant
Slide 9: Possible Contractual Structure - Execution
Possible Contractual Structure - Execution Power LSTK with Optional BOOT Az Zabirah Aluminium Company (Ma’aden+) Smelter Lump Sum Date Certain or EPCM Az Zabirah Aluminium Smelter Technology (fixed price with Project Direction Team performance guarantees) - Pechiney Refinery EPCM (±70% value) Progra
Slide 10: Possible Contractual Structure - Operations
Possible Contractual Structure - Operations Az Zabirah Aluminium Company (Ma’aden+) Refinery O&M/Technical Services Smelter O&M/Technical Services Railway Tariff Agreement Power O&M (Availability & Efficiency) Oil/Gas Supply Contract Bauxite Import Contract (Initial) SEC Interconnection/Buy & Sell A
Slide 11: Project Costs
Project Costs Est. Cost Facility Comment US$ millions Likely financed Bauxite mine 80 separately Railroad 1,200 Financed by PIF Alumina refinery 820 Aluminium 2,100 To be financed as smelter part of the project Infrastructure & 90 marine terminal May be separately Power/Water 800 to1,000 financed
Slide 12: Some Costs Shared With Al Jalamid Phosphate Project
Some Costs Will Likely be Shared With The Al Jalamid Phosphate Project Facility Cost Zabirah Jalamid KSA $ bill. Railroad $1.20 May be financed Power/Water $0.90 independently Marine Terminal $0.05 Access roads, Accommodation, $0.04 Other For present “bankability” reasons Aluminium and Pho
Slide 13: Site Location
Site Location Phosphate Deposits Ras As as Zhor Zhor Bauxite Deposits Indicative Mineral Railway Route Future Rail New Line Extension to Gulf States Exist. Line
Slide 14: Locating the Complex at Ras as Zhor
We are locating the complex at Ras as Zhor:- It has the best access to deep water in the area. It is the preferred area for the development of new power generation and desalination projects. It is ARAMCO land with established ownership and rights of way with easy access to the grid and standby power
Slide 15: Key Issues
KEY ISSUES
Slide 16: Caustic Soda
The Az Zabirah Aluminium Project in KSA. CAUSTIC SODA
Slide 17: Caustic Soda Grades for the Bayer Process
The Az Zabirah Aluminium Project in KSA. MA’ADEN have been investigating the economics of the various grades of caustic soda which may be used in the Bayer process. MEMBRANE – High purity generally used by the refining and paper industries with few exceptions. DIAPHRAGM - Contains Sodium sulphate an
Slide 18: Caustic Soda Pricing Implications
The Az Zabirah Aluminium Project in KSA. Pricing implications of the various possibilities are as follows: MEMBRANE – Price to be currently discounted agreed half-year price to Australian Alumina producers on f.o.b. Jubail basis. Any further discounts are “Commercial-in-Confidence.” DIAPHRAGM – Pric
Slide 19: Power
The Az Zabirah Aluminium Project in KSA. POWER
Slide 20: Arab Light Crude as Power Generation Energy Source
We are will be using relatively low sulfur Arab Light Crude as the energy source for power generation:- Associated gas resources are already committed and the New Ventures’ gas costs will be higher and escalating. Preferred use for gas is as a feedstock rather than burning it for energy. We are not
Slide 21: Power Plant Configuration
Power Plant Configuration Station to be sized to meet the power requirements of Az Zabirah on an n+1 basis with installed capacity of 1500MW and provision for desalination. Phase 1 smelting capacity to be +640,000 tpa. Station will operate as a base load generator, connected to the grid for export o
Slide 22: Contracting Options
Contracting Options Build Operate Transfer Ma’aden does not own the project but manages and operates it during the (BOT) concession period Developer also owns the facility for the Build Own Operate Transfer concession period; thereafter asset (BOOT) reverts to Ma’aden ownership. Payment based on fue
Slide 23: Advantages of IPP (BOOT) Approach
Advantages of IPP (BOOT) Approach Facilitates access to longer term finance customary with IPP’s; Releases Ma’aden capital from non-mining related activities; Facilitates division of financing requirement into more manageable pieces; Reduces Ma’aden management involvement with power development; Can
Slide 24: A Dedicated Power Plant as Part of the Project Scope
A Dedicated Power Plant as Part of the Project Scope Financed according to overall project financing terms and/or supplier ECG supported financing with possibility of an extended tenor. The advantages of such an approach would be: Single borrower / project company / ECG finance for both projects; no
Slide 25: Funding Options
Funding Options A summary of the funding options under consideration are as follows: 1. Fund as part of the overall project with debt:equity ratio of 60:40; 2. Fund on basis of Islamic finance with 100% funding, say 15 year lease to takeover, and operational control; 3. Fund on Export Credit support
Slide 26: Az Zabirah Fuel Price v. Power Prices
Az Zabirah Fuel Price v. Power Prices (15% ROE) US$574/installed kW $18.00 $16.96 $17.00 $16.05 $16.00 $15.15 IPP(BOOT) $14.74 $15.00 $14.25 $13.84 $/Mwh $14.00 $13.34 $12.94 $13.00 $12.03 $12.00 $11.13 Self-build $11.00 $10.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 0.50 0.55 $/MMBtu IPP Self
Slide 27: De-escalated Power Price
De-escalated Power Price Based on Oil at 46 cents/MMBtu Fixed for 10 Years Operations 14.5 Power Price (2008 $ per MWh) 14.0 13.5 13.0 12.5 12.0
Slide 28: Effect of Oil Price on Cost of Generation
The above graphs indicate the effect of oil price on the cost of generation for both IPP(BOOT) and Self-Build(BOO) approaches to the power project. The graph is based on a report prepared by a team comprising of Ma’aden, a Technical consultant, a Power Development consultant and power specialists fr
Slide 29: Primary Aluminium Smelter League - Global 2009
Primary Aluminium Smelter League - Global 2009 63 56 49 42 35 US$ / MW-hr MAADEN POSITION 28 GAS AT 75 cents 21 14 DESIRED 7 MAADEN POSITION FUEL OIL 0 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 % Of Global Accumulative Production
Slide 30: Power Cost Position in Smelter League
The above graph shows that on start of full production in 2009 a power cost of 14 Mils indicates that we will be in the lowest 27% of smelter power costs. It also indicates that with a CCGT gas fired station at 75 cents/MMBtu gas price for a “greenfield” smelter we would neither be sufficiently prof
Slide 31: Conclusions and Actions
Conclusions and Actions The project is proceeding on a “fast-track” program; Ma’aden is presently finalising and will be issuing an enquiry to Manufacturers and selected Developers for the power generation and desalination by the end of February on the following basis: Complete power and desalinatio
Slide 32: The Competitive Advantage
The Competitive Advantage 500, 000tpa Aluminium + 1.5 Mtpa Alumina Desalination Plant Low Grade Waste Heat 1843 GJ/h Desalinated Water 1886 GJ/h Turbine Waste Heat Waste Heat Waste 11,372 GJ/h 11,372 GJ/h Heat Alumina Refinery 8132 GJ/h Low Grade Waste Heat 2175 GJ/h Alumina Refinery Steam Plus Elec
Slide 33: Section Thru Central Zone
ye ma‘anen @ also SECTION THRU CENTRAL ZONE | SW NE | MARRAT FORMATION | BAUXITE | WASIA FORMATION | ARUMA ond | PROFILE | kw FORMATION sos, NAFUD | cunt) " Az Zabirah camp | ooo |B 575- 550 7 T T 7 T T T 7 T 0 1 2 3 4 5 6 7 8 9km A A' ~~] Claystone exe} Vuggy ; om sa) (Nay say } dolomite Sillstone
Slide 34: Central Zone North
m 5k NORTH ZONE CENTRAL ZONE 0.5 105 k m SOUTH ZONE
Slide 35: Operating Cost Breakdown - Total Project
Operating Cost Breakdown - Total Project Expatriate Labour Other Imported Spares & Supplies Electricity Bauxite Labour Caustic Fuel Chemicals Carbon Products Az Zabirah Bauxite & Alumina Project
Slide 36: Typical Profile
Typical Profile Texture/lithologies Sandstone/claystone Overburden sequence Anguler unconformity " Flecked clay ae - Uprer clay zone Porcelaneous matrix a (resilicated pisolitic bauxite) Streaky kaolinite Beuxite breccia Pseudoconglomerate Pisolitic bauxite =one eR {potentially economic interval) pi
Slide 37: Selected Cumulative Cash Flows
Selected Cumulative Cash Flows 100,000,000 90,000,000 80,000,000 C u m u a tiv e C a sh flo0 0w0S R 70,000,000 ) Cash In - Operations 60,000,000 Cash Out - Construction Cash In - Loans and Equity 50,000,000 Cash Out - Debt Service Cash Out - Operations (Imports) 40,000,000 NetCash Generated Cash Out
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