Thermal Coal Market Presentation to UNECE Ad Hoc Group of Experts on Coal in Sustainable Development December 7, 2004 Barlow Jonker Pty Ltd Commercial in Confidence 1
Presentation Outline 1. Barlow Jonker 2. Market Overview 3. Demand Forecast 4. Supply Forecast 5. Conclusions Barlow Jonker Pty Ltd Commercial in Confidence 2
Who / What is Barlow Jonker? Private coal consultancy Focus on international coal trade, & asset investment Offices: Sydney, Brisbane, Johannesburg, Beijing affiliates in : Jakarta, Bogotá, UK, USA, Canada Advising the industry for over 25 years A unique & boutique group Three key business elements Industry experienced staff management, marketing, engineers, geologists, scientists, economists Coalportal.com News, Information, Data Research & Analysis Comprehensive Industry Database Advisory Services - coal Market - asset investment - business strategy >2000 Consumers >1000 coal mines > 500 projects Barlow Jonker Pty Ltd Commercial in Confidence 3
2. Market Overview Barlow Jonker Pty Ltd Commercial in Confidence 4
Supply Demand Modeling Economic Growth Interfuel Competition Regulatory Framework Cost of Supply Political Environment Resources & Reserves Coal Quality/ Marketability Coal Demand Generation Demand Cement Demand Other Industrial Demand Coal Supply Mine Capacity Infrastructure Capacity 2000 power station units 200 cement companies 85 countries Over 500 mines 35 countries Barlow Jonker Pty Ltd Commercial in Confidence 5
Global Coal Production 2003 5 Bt Barlow Jonker Pty Ltd Commercial in Confidence 6
2003 Thermal Trade 481Mt 1.7 0.5 17.2 50.5 Atlantic 214 Mt 3.7 64.7 33.3 17.5 5.8 75 4.5 77.7 5.3 9 8.9 Asia Pacific 267 Mt 93.7 11.5 Principal Exporters Principal Importers Barlow Jonker Pty Ltd Commercial in Confidence 7
Annex B EU Countries - Coal Use Coal Use Change - 2003 Versus 1990 100% 80% 60% 40% Increased Demand 20% 0% -20% -40% -60% -80% Decreased Demand -100% Iceland Netherlands Portugal Spain Italy Greece Norway Finland Sweden Denmark Poland Austria Luxembourg Germany Ireland France Belgium United Kingdom Switzerland Total Thermal Coking Barlow Jonker Pty Ltd Commercial in Confidence 8
Annex B Countries CO 2 Emissions 60% 40% 20% 0% % of 1990 levels % of Kyoto Target -20% -40% -60% Portugal Ireland Spain NZ Greece Slovenia USA Croatia Australia Italy Japan Austria Finland Canada Belgium France UK Netherland EU Sweden Switzerland Denmark Iceland Hungary Czech Rep Luxembour Poland Germany Slovakia Norway Russia Estonia Bulgaria Romania Lithuania Ukraine Latvia Barlow Jonker Pty Ltd Commercial in Confidence 9
Thermal Coal Demand Barlow Jonker Pty Ltd Commercial in Confidence 10
Supply Demand Outlook - Global Global Coal Demand Summary by Region 700 Million Tonnes 600 500 400 300 Sth America Nth America Mid East & Africa Other Europe EU15 Pacific 200 100 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Other Asia North Asia Total Supply Barlow Jonker Pty Ltd Commercial in Confidence 11
Demand Outlook Atlantic Imported Thermal Coal Demand Summary Nth America Sth America 300 250 Israel/Africa Other Europe Italy UK Million Tonnes 200 150 100 50 Spain Germany Netherlands France Denmark Belgium/Lux Portugal Ireland Finland Sweden Austria - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Greece Atlantic Total Supply Barlow Jonker Pty Ltd Commercial in Confidence 12
Demand Outlook Pacific Imported Thermal Coal Demand Summary 450 400 350 Million Tonnes 300 250 200 150 100 Other Thailand Philippines Malaysia India China Hong Kong Taiwan Korea Japan Pacific Total Supply 50-2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Barlow Jonker Pty Ltd Commercial in Confidence 13
Thermal Coal Supply Barlow Jonker Pty Ltd Commercial in Confidence 14
Supply Outlook Atlantic (1) 300 Atlantic Thermal Coal Export Supply 250 Supply Shortfall Million Tonnes 200 150 100 50-2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Norway 0.4 1.5 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 Other Europe 1.7 3.9 4.2 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 UK 0.6 0.5 0.5 0.6 0.6 0.5 0.5 0.5 0.5 0.5 0.4 0.4 0.4 0.4 0.4 0.4 Czech Republic 2.0 1.1 1.1 1.7 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 Poland 16.9 19.7 19.6 18.6 18.0 16.5 14.0 12.0 10.0 9.0 9.0 9.0 9.0 9.0 9.0 9.0 Russia West 20.1 21.9 26.1 26.3 27.5 31.0 29.0 29.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 Canada 1.4 0.8 0.9 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 USA 17.9 17.5 14.9 18.7 19.2 14.0 13.8 13.1 13.1 13.1 14.7 14.5 14.3 14.1 13.8 13.6 Venezuela 6.5 6.3 5.6 5.9 6.2 6.7 6.7 6.7 6.7 6.7 6.7 7.7 7.7 8.9 9.8 10.4 Colombia 34.3 38.9 36.4 45.3 51.3 55.3 58.4 62.4 63.5 64.5 66.0 68.7 71.2 72.2 75.2 77.7 Other Africa - - - - - - - - - - - - - - - - South Africa 64.6 61.1 67.8 69.8 65.2 66.4 67.1 70.7 74.0 74.0 76.3 78.3 80.3 80.3 80.3 80.3 Atlantic Demand 175.7 194.8 200.6 223.0 223.7 235.9 244.6 245.6 244.3 246.7 252.1 256.3 255.3 258.4 261.8 263.3 Barlow Jonker Pty Ltd Commercial in Confidence 15
Supply Demand Outlook Pacific (1) 400 350 Pacific Thermal Coal Export Supply Supply Surplus Million Tonnes 300 250 200 150 100 ` 50-2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Other 0.4 0.4 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 USA 3.9 2.3 1.4 0.2 - - - - - - - - - - - - Canada 3.5 2.9 2.1 1.7 1.7 1.7 1.5 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 Russia East 6.8 6.6 8.9 7.5 8.5 9.0 9.0 9.0 9.0 9.0 9.0 9.0 9.0 9.0 9.0 9.0 Vietnam 1.2 2.6 3.9 4.4 9.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 China 49.1 77.1 71.1 80.8 83.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 Indonesia 53.4 62.7 70.1 85.7 97.8 110.2 114.1 117.7 116.4 117.3 118.4 121.4 123.6 126.1 126.6 126.6 New Zealand 0.2 0.3 0.2 0.5 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 Australia 87.0 88.1 99.9 105.2 109.3 114.6 125.1 128.7 135.1 140.4 141.3 143.2 146.6 149.8 153.5 155.8 Pacific Demand 196.9 221.2 235.0 256.3 278.1 284.7 288.0 292.9 297.3 303.7 302.1 305.9 316.5 326.0 329.1 331.9 Barlow Jonker Pty Ltd Commercial in Confidence 16
Concluding Comments Thermal coal demand growth remains strong Pacific greater than Atlantic Long term supply base Short term infrastructure constraints Will support supply growth for the future Atlantic market imbalance Swing of USA from exporter to importer New project investment constraint Focus on investment returns (production, infrastructure, consumer) Uncertainty (regulatory, environmental, market) Barlow Jonker Pty Ltd Commercial in Confidence 17