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2014 Annual General Meeting 1 August 2014
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 ("Vedanta"). Past performance of Vedanta 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 that those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.
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 or any of its subsidiary 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.
FY2014 Annual General Meeting 1
FY2014 Annual General Meeting 2
London Mumbai
390p
902p
At IPO End FY2014
Share price
Creating Value Over 10 Years
FY2014 Annual General Meeting 3
Notes: TSR data sourced from Bloomberg. Dividend Yield based on the 1 month average share price as of 2 May 2014. Employees as of 31 March 2014.
Government refers to payments to various governments through direct and indirect taxes, royalty and profit petroleum.
Contribution to government and communities includes FY2012 on a pro forma basis with Cairn India for the full year.
Since IPO Share Price
Performance
Total Shareholder
Return
Vedanta 131% 200%
FTSE-350 Mining 137% 189%
FTSE-100 51% 114%
Total Shareholder Return 200%,
12% CAGR
Capital Returned to Shareholders $1.4 billion
since IPO
Dividend Yield 4%
Government1 $15 billion (last 3 years)
Community Impact – Beneficiaries 4.1 million
Direct and Indirect Employment 88,000
Ten Years of Investment and Growth
FY2014 Annual General Meeting 4
Note: 1. All commodity and power capacities rebased to copper equivalent capacity (defined as production x commodity price / copper price) using average
commodity prices for FY2014. Power rebased using FY2014 realisations. Copper custom smelting capacities rebased at TC/RC for FY2014. Iron Ore
volumes refers to sales, with prices rebased at average 56/58% FOB prices for FY2014. For Oil & Gas, production refers to Working Interest.
0
200
400
600
800
1,000
1,200
1,400
1,600
FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
Pro
du
ctio
n in
co
pp
er e
qu
ival
ent
(kt
)
Zinc-Lead
Silver
Copper
Aluminium
Power
Iron Ore
Oil & Gas
Production Growth (in Copper Equivalent kt)1
FY2014 Highlights
Operations
• Record oil & gas production at Rajasthan
• Record production of mined and integrated metal at Zinc India
• Continued strong operating performance at Aluminium; commissioning new pot-lines
• Goa mining ban lifted
FY2014 Annual General Meeting 5
FY2014 Highlights
Corporate
• Sesa Sterlite merger completed
• c.$900mn buyback programme at Cairn India
• Tom Albanese appointed as CEO
FY2014 Annual General Meeting 6
FY2014 Financial Performance
FY2014 Annual General Meeting 7
$mn or as stated FY2014 FY2013 %change
EBITDA 4,491 4,888 (9)%
EBITDA margin1 (%) 45% 45%
Free Cash Flow2 1,592 1,516 +5%
Net Debt 7,920 8,616
Gearing (%) 30.6 31.4 (8)%
Total Dividend (USc/share) 61.0 58.0 +5%
Note: 1. Excludes custom smelting at Copper and Zinc-India operations
2.. Free Cash Flow after Growth Capex
CEO’s First Impressions
First Impressions • Dynamic & capable teams, open to change • Strong community programmes • Diversified portfolio of world class assets
Operational Priorities • Copper Zambia: Operational turnaround • Aluminium: Smelter capacity & bauxite sourcing • Iron Ore: Restart operations in Goa • Zinc-India: Underground mining & expansion of
mined zinc-lead • Oil & Gas: Maximize exploration and ramp-up
production at Rajasthan
Corporate Priorities • Strong focus on safety • Vedanta brand, communication and stakeholder
engagement, safety and CSR • Realize synergies of the Sesa Sterlite merger • Pursue minority buyouts
FY2014 Annual General Meeting 8
Iron Ore mine, Goa, India
Rajasthan Oil & Gas, India
India: Strong Fundamentals for Demand and Supply
FY2014 Annual General Meeting 9
Urbanization increasing but
below World average
Increasing Labour Force (% of Total Population)
15%
30%
45%
60%
1990 2000 2010 2020 2030
India World China
1.5 0.4 0.5 1.0
6.6
3.5 1.9
4.6
15.4
7.2
4.2 2.7
Aluminum Copper Zinc Oil
India World China
Low Per Capita Consumption (Metals - CY 2013 per capita consumption in kg; Oil - CY2012 per capita consumption in barrels)
15%
30%
45%
60%
2000 2010 2020 2030 2040
India World China
India: Shared geology and mineral potential with
Africa & Australia and Abundant Natural Resources Global Ranking¹
7th Iron Ore R&R: 29 bn tonnes
5th Coal R&R: 295 bn tonnes
6th Zinc R&R: 50 mn tonnes
8th Bauxite R&R: 3.5 bn tonnes
89%
49%
5% 29%
38%
5%
Zinc Lead³ Silver Copper Aluminium Oil
Vedanta Other Producers Imports
Vedanta - Strong Market Positioning in India FY2014 India Market Shares²
Sources: Wood Mackenzie, BP Statistical Report, Global Insight, Indian Ministry of Petroleum and Natural Gas, IBIS, Aluminium Association of India, ILZDA, company sources. Total estimated Reserves and Resources based upon public sources including GSI, GOI, Wood Mackenzie, UNFC & IBM.
Notes: 1. Ranking based on Reserves.
2. Based on domestic Consumption, except Aluminium which is based on primary production.
3. Based on Primary lead.
FY2014 Highlights
Sustainability
Update
• 72% LTIFR reduction over last 6 years
• Reaching 4.1m people through community programmes (11% more than last year)
• Improved water and waste recycling levels
• Successful completion of Scott Wilson audit
FY2014 Annual General Meeting 10
Operating Sustainably
Highlights
• Goal to reach & sustain zero harm
• Initiated behavioural based safety programmes
• Focus on reporting of leading indicators
• 100% periodic health medical examinations
FY2014 Annual General Meeting 12
Key Safety Focus Areas
• Fatality elimination
• Process safety
• Work at height
• Fleet safety
• Lock out – Tag out (LOTO)
• Machine guarding
• Permit to work
• Pedestrian management
Lost time injuries per million hours
1.91
0.54
72% 6 years
Environment
Highlights
• Zero higher category Env. Incidents
• Biodiversity Management Plan for all sites by 2015-16
• Focus on Energy management certification:
– SSL- Jharsuguda, SSL Copper – Tuticorin and Silvassa got ISO 50001 certification
• Environmental & Social Impact Assessments (ESIA) on all new projects and extensions
• Structure projects on Water, Energy and Carbon
FY2014 Annual General Meeting 13
8.2%
22.6%
24.0%
25.0%
2010-11
2011-12
2012-13
2013-14
Total Water Recycled
52.0%
71.0%
64.0%
65.0%
2010-11
2011-12
2012-13
2013-14
Total Waste Recycled
Environment Case Study: Zero Waste at Lanjigarh
FY2014 Annual General Meeting 14
• Working to achieve world’s first ‘zero waste’ refinery
• Using fly ash only to produce cement free ‘green’ concrete
• Significant environmental advancement, reducing Co2 emissions
• Green concrete:
– Uses less water
– Cheaper to produce
– Reduces ash ponds
• Red mud - a waste produced from the refining of bauxite
• Difficult to dispose of , usually pumped into holding ponds
• At Lanjigarh, a new red mud disposal system:
– Converts liquid mud into solid cakes
– Can be used in products for cement and pig iron production
– Complete elimination of the wet red mud pond and reduction of related risks to the environment
Community Relations
• Vital to our licence to operate
• Structured approach to providing information
• Grievance mechanism in place
• Ongoing specialist human rights training
FY2014 Annual General Meeting 15
Society
FY2014 Annual General Meeting 16
► One of India’s highest corporate tax payers
US$15bn Tax paid to exchequers around the world, over 3 years
88,000 Jobs
US$49m Spend on or in communities
4.1m beneficiaries via integrated development programmes
Community programmes reaching
250 NGOs and academic institutions
Partnership with
Long-term Commitment to Africa
FY2014 Annual General Meeting 17
AFRICA
Operations
• Diverse portfolio: zinc, lead, copper/cobalt, iron ore and oil & gas
• Focus on local beneficiation
Capital Investment
• $2.9bn invested in Zambia, projects in feasibility in South Africa & Namibia
• Large resource base allowing for phased growth
Contribution to Group
• African operations currently constitute 10% of Group EBITDA (H1 FY2014)
• Significant growth potential
Contribution to Society
• $23m contribution to CSR, Health & Education projects in FY2013
• Community programmes benefiting c.150,000 people across 4 countries
Employees • c.19,000 employees across 4 countries
Case Study: Transforming Water Footprint at Copper Zambia
FY2014 Annual General Meeting 18
Effluent Treatment Ponds Recycled Water Usage Hippo Pool – Upstream and Downstream
0
100
200
300
400
500
2007 2008 2009 2010 2011 2012 2013 2014YTD
TSS
(mg/
L)
Total Suspended Solids
Ave. TSS (mg/l)
Statutory Limit (mg/l)
To
da
y
200
7
Total Suspended Solids Reduction Program for Konkola: Underground rehabilitation for water handling & pumping
Pollution Control Dam
Case Study: Improving community engagement at BALCO
FY2014 Annual General Meeting 19
• Area prone to water shortages over summer season and community concern over impact on existing water supplies
• Vedanta outreach initiative including regular meetings with elected representatives of surrounding area
• Specific water-related issues registered at community grievance office
• BALCO contacted the responsible local water authority to ensure delivery of water
• In event of shortage BALCO to provide water until local authorities resolve water shortages
Case Study: Lisheen Mine Closure
FY2014 Annual General Meeting 20
• Underground lead and zinc mine located in north Tipperary, Ireland
– Mine life extended by over 2 years since acquisition
– Expected closure in 2016
• Vedanta actively pursuing potential alternative industries / sustainable development projects to ensure socio economic aspects of a closure are addressed
• Task force made up of local government representatives, Lisheen staff and members of governmental industrial development agencies
• The mine has been progressively rehabilitating the tailings management facility
– 23% of the area has been rehabilitated; will increase to 51% by the end of 2014
• After-care at Lisheen will span 30 years
Future Focus
• Absolute focus on safety
– Enhance personal responsibility at all levels; Key Performance Indicators established
– Improved training
• Sustainability Framework now embedded group wide
• Continuing investment in technology
• Commitment to be more responsive to stakeholders and grow community relationships
• Diversity is a priority
FY2014 Annual General Meeting 21
Summary
• India: strong, long-term, economic prospects
• Significant growth potential in commodities
• Vedanta: better positioned than ever
• 10 years of investment and growth
• On track with current strategy
• Focus on increasing production and translating into revenue for shareholders
• Commitment to Health, Safety & Environment
FY2014 Annual General Meeting 22
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