Aluminium Fluoride Overview of Demand in India 10

Aluminium Fluoride Overview of Demand in India 10 th World Aluminum Raw Materials Summit 2019 May 17, 2019 Zhengzhou, China Akshay Malhotra Marketing Manager – Raw Materials TATA International +91 -9833879880 akshay. malhotra@tatainternational. com

Company Profile Delivering value to customers and all stakeholders Incorporated in 1962 Currently headed by Mr. Noel N Tata. Managing Director Worldwide network for trading and distribution Premier Trading arm of the Tata Group 6500+ employees worldwide Operates across 5 business verticals in Leather and Leather Products, Metals Trading, Minerals Trading, Distribution, Agri Trading Drives customer focus and strategic partnerships Disclaimer: The opinions expressed in this presentation and on the following slides are solely those of the presenter and not necessarily those of Tata International does not guarantee the accuracy or reliability of the information provided herein.

Products for Aluminium Industry (PAI) Portfolio Core Competence. The ability to provide customized solutions in line with changing customer needs CALCINED PET. COKE/ GREEN PET. COKE COAL TAR PITCH BATH CRYOLITE ALUMINIUM FLUORIDE CATHODE/ ANODE BARS Value Added Solutions Manufacturing. Marketing. Technical Logistics. Trade Finance

Aluminium Industry Landscape in India Current Consumption Future Demand • Annual Global Consumption of 88 Million Tonnes (Including Scrap) • Per capita consumption in India is 2. 5 kg vs global average of 11 kg • Growing at a CAGR of 10% and anticipated more than 4 X by 2030 with the Government’s visionary initiatives like Make in India, Smart Cities, indigenous space programmes, domestic defence sector revival will boost domestic manufacturing and value addition Growth Drivers • Improved captive alumina production and locally sourced bauxite are key to lower costs • LME price vs Average cost of production is a key indicator Key Players • Vedanta, Nalco, and Hindalco are the key domestic players • Combined annual production capacity of 4. 1 million tonnes

Risks associated with the Industry Interim Relief by Supreme Court, limits import of pet coke Section 232 – Imposed by USA March 2018 April 2018 Oct 2018 BIS notification for imports of Caustic Soda • • • Volatility in LME prices Fluctuations in foreign exchange rates Fluctuation in global Aluminium production, operating vs cash profits Slowdown in the global economy, trade sanctions Growing competition from secondary producers in the domestic market for value added products Increase in prices of inputs particularly Caustic Soda, C. P. Coke, C. T. Pitch, Aluminium Fluoride and auction coal

Key Indian Smelters Details Smelters Nalco Vedanta Hindalco Angul Korba 460 570 1750 Pot Lines 4 2 No. of Pots 960 624 Capacity (kt/year) Jharsuguda Renukoot Hirakud Aditya Mahan 400 200 360 6 11 5 1 1 1952 2139 780 360 • Vedanta has become the highest Aluminium producer in India in FY 2019. Production Stood at 1, 959, 000 tonnes – 17% increase from 1, 675, 000 tonnes. Mostly driven by stabilized production increase after complete ramp up at Jharsuguda • Nalco produced 460, 000 MT and Hindalco expected to produce 1. 29 million tons

ALF 3 Trade Flow into India ` Fluorsid, Italy Several Al. F 3 producers, China JPMC, Jordan Mexichem, Mexico Gulf Fluor, UAE PT Petrokimia, Indonesia High Bulk Density Low Bulk Density India is one of the largest importers of Al. F 3 globally along with Russia (each at ~17%). Only 15 -20% of India’s total Al. F 3 requirement is met through domestic supply

Imports vs Domestic DOMESTIC PRODUCERS IMPORTS Country FY 17 FY 18 FY 19 China (H) 4978 72 15648 UAE (H) 19036 29540 11823 - 500 17799 Jordan (L) 4051 - 2835 Indonesia (L) 7540 6300 6060 Italy (H) 6156 2970 756 46564 49758 57719 Mexico (H) Total in MT (including Others) *Source: Export Import Data Bank H- High Bulk Density, L- Low Bulk Density Al. F 3 sales patterns similar to prior years, continued strategy of reducing focus on Al. F 3 while maintaining long term customers • Focus on Specialty Grade HF And Specialty Fluorides. • Raw material sourcing (Silicic Acid) constraints eased • Adjacent Fertilizer Complex vs. Other Expensive Sources • • • Installed capacity of 2560 tpy Lesser market share compared to Tanfac and Alufluoride

Industry Outlook: China Prices • • • 15000 14000 13000 12000 110000 9000 8000 7000 6000 5000 4/1/2016 Source: Asian Metal Fluorspar and ATH Al. F 3 4/1/2017 4/1/2018 4/1/2019 Per metric tonne price (in RMB) Aluminium Fluoride FS 7000 6300 5600 4900 4200 3500 2800 2100 1400 700 0 4/1/2016 4/1/2017 AT H 4/1/2018 4/1/2019 Surge in Al. F 3 levels in China during Oct-March ‘ 18 & ‘ 19 can be attributed to the winter cut policy Price trend of Fluorspar primarily impacted by demand from Fluorochemical industry, followed by Al. F 3 Chinese crackdown on polluting industries had major impact globally – With smelting capacity shutdown; availability of Calcined Petroleum Coke (CPC) & Aluminium Fluoride (Al. F 3), strategic materials for Aluminium smelting , has also been severely impacted due to capacity closure in China • Decrease in aluminium supply from China has provided an upward impetus to LME index; uptrend likely to continue– primary smelters trying to maximize production and restart shut down capacity • Energy cost reduction (~40% of production) is top priority for smelters worldwide and most of R&D initiatives are centered around it

Fluorspar • Primarily used for HF Production, which is further used for making Fluor chemicals. Classified as a critical raw material by Europe and USA • • • China has ~80% global fluorspar capacity. 19% of Global FS used for Al. F 3 • • Purchase mostly executed on long term contracts with producers vs. spot buy • India has limited fluorite reserves in select states including Gujarat, Maharashtra, Rajasthan and Chattisgarh. These are not sufficient to cater to the Al. F 3 producers, who eventually meet their requirements through imports Integrated/ captive mines with Al. F 3 plants provide a major cost advantage Cost Effective to ship 1 MT of Al. F 3 than 4. 3 MT of raw materials (FS + ATH + SA) FSA is a commercial alternative but is relatively flat as around 90% of Al. F 3 still produced from Fluorspar (HBD) and balance 10% from FSA (LBD)

Way Forward “Aluminium consumption may double to 7. 2 million in 5 yrs”: Nalco. • Al. F 3 demand may increase to >100 k MTPA in 5 -7 yr. term to cater to increased consumption, assuming entire growth is fueled by domestic Al production • Enhance the Imports of high density Al. F 3 from key producers in UAE & China through well established marketing channels • Swap agreements for key raw materials between domestic ATH producers and foreign Al. F 3 producers “Alufluoride Ltd signs Mo. U with JPMC, Jordan for production and marketing of Aluminium Fluoride – 9 Feb, 2019. ” • Expansion of existing domestic capacity for low bulk density Al. F 3 • Index linked pricing to curb volatility & fluctuations arising out of government policies and unanticipated market events

Xie Dhanyawad Thank you Akshay Malhotra Marketing Manager