RWE Power International. Bankable Feasibility Study Thar Lignite Mine Work Progress

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Angelina Pierce
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1 RWE Power International Bankable Feasibility Study Thar Lignite Mine Work Progress

2 Project Time Schedule 2

3 Actual Work Status Phase I: Review and Planning Stage Task Status Data review Design and specification of exploration program Review of topographic data Development of a project implementation schedule Inception report Approval of inception report and implementation schedule completed completed completed completed completed completed 3

4 Actual Work Status Phase II: Exploration Stage (I) Task Status Mobilisation and procurement Exploration and target mine area delimitation Interim exploration report Detailed exploration Collection and evaluation of drillhole samples Geotechnical and hydrological drillhole test programs completed completed completed completed completed completed 4

5 Actual Work Status Phase II: Exploration Stage (II) Task Determination of parameters needed for site characterisation Status completed Environmental and sociological studies 50 % Deposit modelling, hydrological modelling and detailed geological report 90 % 5

6 Actual Work Status Phase III: Mine Design and Project Feasibility Stage (I) Task Status Identification of various mine designs 90 % Definition of fundamental design parameters for the detailed mine planning Evaluation of potential mine and equipment designs Technical and cost analysis to define preferred mining option 10 % 25 % 20 % Detailed mine design for preferred mining option 0 % Determination of environmental impact and definition of a respective management plan 20 % 6

7 Actual Work Status Phase III: Mine Design and Project Feasibility Stage (II) Task Status Personnel recruitment and training plan 0 % Determination of development requirements 0 % Estimation of waste rock dilution and losses 70 % Layout of waste mining and waste disposal 10 % Definition of labour and equipment requirements 0 % Mine development schedule 0 % 7

8 Actual Work Status Phase III: Mine Design and Project Feasibility Stage (III) Task Detailed financial analysis of preferred mining option Status 0 % Mine feasibility study report 0 % Financial ability report 0 % Draft Thar coal mining feasibility study report 0 % Final report 0 % 8

9 Next Steps - Thar Mining Project Completion of site assessment report / geological model (Dec. 2003) Selection of power plant location Mine design and equipment selection Environmental considerations Personnel planning Cost model and financial analysis Reporting 9

10 Exploration Program 10

11 Main Parameters For Power Plant Design Installed gross capacity: Installed net capacity: 3 x 370 MW 1000 MW Water supply: condensate from coal pre-drying use of groundwater closed cooling water circuit Location of power plant Connection to infrastructure Ash disposal to be defined 11

12 Main Parameters For Mine Design Total coal in mining area: Coal demand for lifetime of TPP (30 years): ~ 400 mill. t ~ 180 mill. t Annual overburden removal: ~ 50 mill. m³ Annual coal production: Stripping ratio: Mine depth: ~ 6 mill. t ~ 8 : 1 (m³:t) ~ 220 m Annual groundwater pumping: ~ 5 mill. m³ 12

13 Siting Options For TPP And Mine 13

14 Equipment Options Bucket Wheel Excavator 14

15 Equipment Options Belt Conveyors Drive Station Belt Frame 15

16 Equipment Options Spreader 16

17 Equipment Options Shovel & Truck 17

18 Equipment Options Surface Miner 18

19 Preliminary Economical Analysis - Thar Energy Project Main Assumptions: Stripping Ratio: 8 : 1 (bcm : t) Total Amount of Coal: 180 mill. t Average Transport Distance: 5 km Project Duration: 30 years Result: 46 /MWh ± 20 % 3,300 Rs/MWh 19

20 Project Development Schedule - Thar Energy Project No. Activity Year Exploration & Mining Feasibility Study 2. Power Plant Feasibility Study 3. Market Study / Check 4. Environmental Impact Assessment 5. Financial Model 6. Information Memorandum 7. Project Promotion 8. Financing 9. Detailed Engineering 10. Tendering 11. Construction Start-up TPP / Start-up OB Removal 12. Commissioning TPP / First Coal Delivery 20

21 Key Conditions For Foreign Investors Owing Structure Legal Protection Power Purchase Agreement / Fuel Supply Agreement Consumers Payment Discipline Governmental / Multilateral Guarantees Approval Procedures / Duration Clear Rules For Exit Tax Regulations / Cash Transfer 21

22 Conclusion & Recommendations Mining feasibility study is on schedule First results are promising Additional steps to be undertaken in order to accelerate the development of the entire project 22

23 RWE Power International Backup

24 German Energy Market Primary Energy Production mill. tce* Primary Energy Consumption mill. tce Gross Power Generation TWh 4% 12% 1% 45% 21% 3% 13% 37% 27% 29% 13% 17% 22% 13% 11% 23% 9% Lignite Mineral oil Nuclear energy Natural gas Hard coal Renewables/other * 1 tce ~ 29.3 GJ ~ MWh 24

25 RWE Market Shares Market Shares in European Power Generation Market Shares in German Power Generation Other 39 % Iberdrola 2 % Tractebel 4 % Endesa 4 % Enel 6 % EdF 20 % Vattenfall 7 % RWE Power 7 % E.ON 9 % RWE 9 % RWE Innogy 2 % EnBW 13 % Other 13 % Vattenfall 16 % E.ON 26 % RWE Power 32 % Source: Oppenheim Research 25

26 RWE Power Generation Portfolio - Germany Power Generation Capacity (33,000 MW) Gross Electricity Production (190 TWh) Gas 12 % Hydro & Other 12 % Hard coal 28 % Nuclear 17 % Nuclear 22 % Lignite 31 % Hydro & Other Short term trading Gas 4% 4% 5% Hard coal 29 % Lignite 36 % 26

27 RWE Power Sites - Germany Bremen Essen Köln Frankfurt Hard coal-fired power plant Lignite-fired power plant Nuclear power plant CCGT plant Gas and waste incineration power plant Hydroelectric power plant Saarbrücken München Braunkohle 27

Value in uncertain times

Value in uncertain times 13. InvestorenForum J.P. Morgan AG, Frankfurt January 23, 2013 Dr. Stephan Lowis Head of Investor Relations (as of January 2013) Forward Looking Statement This presentation contains