20100628 jpm asia pacific conference ny cb final

8/3/2019 20100628 JPM Asia Pacific Conference NY CB Final

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1

Company

Presentation

ClaudioBastos

SeniorVP&CFO

2

Sulawesi

JapanSouthKorea

Taiwan

China

Sorowako

PTIsOperations

Australia

MakassarJakarta


2/16

3

ValeIncoLimitedowns58.7%

directlyand0.4%indirectly

throughValeIncoJapan

ValeIncoLimitedisrequired

byCoWtomaintaingreater

than50%interestinPTI

Ultimatecontrolling

shareholderisVale

(NYSE:VALE)

20yearsoflistingonIndonesia

StockExchange

PTIOwnership

58.7

20.1

20

1.2ValeInco

Sumitomo

MetalMining

Public

OtherMinority

4

ContractofWork(CoW)ispartofthe

importantPTIsassetsforlongterm

operationinIndonesia.

CurrentCoWrunsthroughDecember2025.

Itcoversnickeloredepositinthreemajors

provincesinSulawesiwithatotalareaof

about218,000hectares.

ContractofWork


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5

NickelMarket

Potentialforstrongstainlessproductiongrowthas

theeconomyrecoversandrestockingtakesplace

StainlessimprovingstronglyinQ110:Asiarobust,

USbacktopeaklevels(inJan),improvementsinEU

Nonstainlessimprovingfromlowlevels

Scrapavailabilitytightasstainlessrampsup(36

monthlag)

Rising

nickel

and

chrome

prices

reinforce

stainless

restockingdemand

6

PTIsmajorstrengths

Largenickelorereservesprovidesecure,

longtermfeed

Lowcosthydroelectricpower

Aggressivelypursuingcostandproductivity

improvements Highpotentialforfurtherfutureexpansion

Capableofrespondingtonickelmarketdemands


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7

Reserves

Threemajorminingareas:SorowakoEastBlock,

SorowakoWestBlockandPetea allinSouth

Sulawesi.

PTIestimatesorereservescansupportoperations

forapproximately30yearswithcurrenttechnology.

Upsidepotentialthroughongoingdrillingat

Bahodopi(CentralSulawesi),Pomalaa(SouthEast

Sulawesi),Sorowakoouterareaandcoastalareas.

8

Reserves

1.79121.1TotalReserves

1.7038.8Probable

1.8482.3Proven

%GradeMt

AsofDecember31,2009

OreReserves

(inmillionmetrictons)

A32%decreasefrompreviousyearslargelyduetoincompletepre

feasibilitystudy(FEL)attheprocessplantimprovements thiswillbe

reclassifiedbacktoreservesoncethestudycompleted,changeinendof

mininglifetoreflectthenewmininglaw,andminedepletion.


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Lowcosthydropowersupplies

Larona,165

Karebbe,90

Balambano,110

MBDGDiesel,30

SteamTurbine,24

CATDiesel,24

HydroelectricPower

(MWinaverage)

AuxiliariesBackup

Inconstruction

10

316.7

317.1

317.5

317.9

318.3

318.7

319.1

319.5

319.9

1 3 5 7 911

13

15

17

19

21

23

25

27

29

31

33

35

37

39

41

43

45

47

49

5 1 1 3 5 7 9

11

13

15

17

19

21

23

25

27

29

31

33

35

37

39

41

43

45

47

49

5 1 1 3 5 7 9

11

13

15

17

19

21

23

25

Production WeekNo.

TowutiWaterLevel(mASL

390.5

391.0

391.5

392.0

392.5

393.0

MatanoWaterLevel(mASL

Towutil La ke Ma ta noLake

Minimumreservoirlevel requiredfor fullhydroelectricpowergeneration

Reservoirfull

HydroReservoirLevels(frombeginningof2008untilApril2010)

Runningatfullhydrocapacityinenergysavemode

Recentlyspillingthe

watertomaintainthe

maximumlakelevel


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11

Animprovementperformance:

4Q09comparedto1Q10

25.5 29.8ProfitMargin %

39.4 41.2GrossMargin %

60.0 76.2Earnings US$million

106.1 121.7EBITDA US$million

13,733 14,182AverageRealizedPrice

US$/metricton

17,030 19,811Production metrictons

12

8,3458,320

599

132

1366975898

7,500

8,000

8,500

9,000

9,500

4Q09 Fuel s&lubricants

Supplies Employee

costs

Services&Contracts

Taxesandinsurance

O thers 1Q10

COGSperunitremainsthesame

Increase

Decrease

Majorcontributorto

thehighercost


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Continuingwithinitiativesonincreasing

efficiencyandcostenhancement

Integratedbusinessplanning anefficiencyimprovement

Assetmanagementframeworkandfrontlineplanningand

scheduling

Capitalmanagementsystem

Integratedcontractorstrategyframework

ERP,ZBB,ValueTree

Continueenergyconservationprogram

Maturity

of

other

initiatives

ie shared

services

and

global

procurement

14

76.4 71.6 76.8 72.467.3

19.817.0

05 06 07 08 09 4Q09 1Q10

(thousandmetrictonsofnickelinmatte)

Productioninthe1Q10ishighercomparedto

4Q09(whenwecarriedouta3furnaceweeksshutdown)duetomaintenancedeferralto2Q10

Ofwhich1,800metric

tonsrecordedas

nickelinmatte

inventories


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Costofgoodsareundercontrol

5.84

7.958.91

11.07

7.728.32 8.35

0

2

4

6

8

10

12

2005 2006 2007 2008 2009 4Q09 1Q10

(inUS$thousands/metricton) Impactofhigherinputprices

16

Currentchallenges

Operatinginaturbulentsituation with

volatilecommodityprices(nickelandinputs)

BuildingKarebbeontimeandonbudget

Operatingunderhighsocioeconomic

pressures

Preparingforsustainablegrowth


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Karebbeismovingahead

Allfabricationpackagesare

progressingasplanned

Projectprogresssummary

overall50%completion

Theprojectcompletionwillbein

thesecondhalf2011

Thisfacilitywillenableusto

reduceannualunitcashcosts

TotalcapitalbudgetofUS$410

million

18

Karebbe MainCivilWorksProgress

June2009 March2010


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11,629

18,356

29,881

17,724

11,227

13,733 14,182

2005 2006 2007 2008 2009 4Q09 1Q10

(US$permetricton)

Amodestaveragerealizedpriceincreasein1Q10comparedto4Q09

+3.3%qoq

20

ImprovedEBITmargin

267.8

513.4

1,173.0

359.3

170.4

60.0 76.2

38.4

47.5

55.0

72.1

35.331.1

35.3

0

20

40

60

80

2005 2006 2007 2008 2009 4Q09 1Q10

0

300

600

900

1200

1500

Netearnings(US$million)EBITmargin(%)

EBITMargin NetEarnings

+27.2%qoq


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EBITDA

1,759.7

550.1

327.8

821.4

442.4

106.1 121.7

2005 2006 2007 2008 2009 4Q09 1Q10

(inUS$million)

+14.7%qoq

22

ROCE

105.8 110.0 102.3

185.3

33.3 33.0

137.9

29

49

108

32

1523*20*

0

40

80

120

160

2005 2006 2007 2008 2009 4Q09 1Q10

0

40

80

120

160

200CapitalExpenditures(US$million)ROCE(%)

ROCE

CashCapital

Expenditures

*Annualized


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MajorCapitalHighlights

Karebbethirdhydrogeneratingfacilitieswitha

capitalplanofUS$410million.

Repairofelectricfurnaceno.2.

24

ProductionOptimizationProject

TheCompanyisinthemiddleofseveralstudiesonhowtofurtheroptimizetheoperationofourfacilitiesinSorowako debottleneckingproject;

Reviewingourbusinesstoidentifyareasforefficiencyandproductivityimprovements,includingenhancingprocessstabilityandequipmentreliability;

Ongoingoptimizationprojectsetsthestageforfurtherproductionincreases;


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0.36

0.67

0.31

0.19

0.30

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

2006 2007 2008 2009 2010as per

March2010

Actual 3YrAvg

SafetyUpdates

LostTimeInjuryRate PTIEmployeesandContractors

(For1,000,000ManHours)

TargetofPTILTIFR

2010is0.28

We will continue to maintain focus on the current proven safetyprogramstocontinuetoreduceinjuries

Maintaining10%bestamongworldwideminingcompanies

26

Nurserywithcapacityof1milliontreesperyear(app.700hectares)

PTIrestored37nativetypesofvegetationto100hectaresofrehabilitated,postminingland

Returningpostminingareastotheiroriginalecosystems


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27

AllKilnESPs inOperations

December2009afterproject

completion

Kiln1,2,3ESPsstacks;

theoldstackshavebeenremoved

November2007beforetheproject

started

OldK1stack OldK2/3stack

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Makassar

SorowakoBahodopi

Pomalaa

Malili

Sulawesi

Petea

PTI

Longrangedevelopment

PTIsubmitteditsfeasibility

reportonaprocessing

facilityinPomalaatothe

governmentofIndonesia.

Basedoncurrentcondition

andindependentanalysis

andusingrelevant

assumptions,theprojectis

noteconomicallyfeasible.

PTIcontinuestopursueand

analyzethefeasibilityofthe

project.


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Makedividendpaymentsbasedonavailablecash,

uptoamountofretainedearnings,afterprudently

makingprovisionforworkingcapital,debtservice

requirementsandcapitalexpenditures.

DividendPolicy

RecentDividendPayments:

2009interimdividend declaredinNovember2009andpaidon

December29,2009 US$110millioninaggregate.

Specialdividend outof2008retainedearningsdeclaredatMarch5,

2010EGMSandpaidonApril14,2010 US$141millioninaggregate.

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Cashisthemajordriverofthe

Company


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PTI:

Thelargestlateriticnickeloperationin

theworld

www.ptinco.co.id

20100628 jpm asia pacific conference ny cb final

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