Letter from the Managing Director
Astra Resources PLC is a technology led resources company with a cornerstone position in mining, carbon efficient businesses, steel and clean coal conversion technology. The Company has achieved success through diversity in acquisitions, identifying worldwide opportunities and seeking out next generation technology from every corner of the globe. In building this diversified, risk-managed portfolio, Astra’s vision is to redefine industries, and in turn, the global economy. Astra has a huge belief in human ingenuity, and knowledge is prized and leveraged by the Company. Its green technology holdings are significant in terms of both their future revenue and revolutionary potential. Taking century-old methodology in steel production and power generation, these assets will change the way businesses run and, ultimately, shift the ‘playing ground’ in the electricity and steel industries.
Astra’s vision is grounded by the Company’s proven business model, which centers on five fundamental pillars:
Servicing High Growth, Emerging Markets
Astra has a demand-driven focus: emerging economies are essential to building the Company’s diverse and dynamic asset base. Astra has positioned itself, and its assets, to satisfy the strong resource demand from the world’s major urbanization growth markets: China, India, Southeast Asia, the Middle East and Eastern Europe. In particular, Astra’s strategy is to capitalize on the coal and iron ore resources and energy markets in developing and consuming countries, which is achieved through:
- Capitalizing on expansive commodity and product demand from India and China using a technology-led resources strategy
- Securing high value assets and projects in Africa, Eastern Europe, India, Australia and South East Asia
- Partnering with strategically located mines and businesses to service growth markets
Astra’s strategic approach is backed by its investment in diverse assets around the world to ensure exposure to the best projects, create value and generate revenue for shareholders. Astra’s strategic investment aims to achieve diversified returns and is also designed to reduce risk. Astra has an asset base that is diverse in both product and location, with project locations spanning from Hungary to Nigeria, and ranging from iron ore production to carbon credit technologies. Astra’s diversification strategy is achieved through:
- Focusing on disruptive technology for operational, cost and business advantage
- Continuing to leverage geographic scope and diversification of operations
- Capitalizing on strategic investments throughout its portfolio
- Investing in high value, market-ready projects
Astra has a strong focus on acquiring certain technologies that will substantially alter the resources industry by changing end-user demand and costs. The Company aims to do this by identifying inefficient industries, or ones with high cost structures and dominant players or monopolists, and introducing its revolutionary technologies to disrupt the lifecycle of the product. This strategy is widely known as disruptive innovation, or disruptive technology, and refers to an innovation that helps create a new market and value network, eventually changing an existing market and value network by displacing an earlier technology.
Astra’s revolutionary T-Steel, Clean Coal Conversion and carbon-efficient technologies are prime examples of disruptive innovations and are therefore key to the success of the Company.
Industrial and Energy Technologies
T-Steel is a unique steel technology proven to be significantly stronger than regular steel (subject to steel plant, age, configuration and steel type) and cheaper, resulting in considerable savings. Astra owns 45 per cent of the IP for T-Steel, has full management control and retains a number of experts involved in its original development.
Clean coal conversion technology is a process that utilizes poor quality coals for the production of Activated Coal Water Fuel (ACWF) and low cost hydrogen enriched Syngas, with the resulting products offering a long-term, and cheaper, alternative to oil, and resulting in an attractive fuel for the power generation industry.
Astra is also in the final stages of acquiring ‘Nano-Steel’, a new type of steel that has high usability strength (up to 300 per cent), is corrosion resistant, less expensive, and energy saving. Depending on the type of Nano-Steel produced, average specific cost savings are in excess of 20-30 per cent and total energy savings up to 50 per cent. Major process steps in steel making are made redundant with the use of a nano-technology additive in a simple steel mill. This is a new grade of steel which reduces significantly the weight required for the same end-use product.
Carbon Efficient Operations
Astra’s strategy also embraces the fact that as more and more governments around the world commit to increasing total energy output generated by renewable sources there will be a proportional increase in the number of opportunities for economically viable commercialization of renewable energy production. As such, Astra is working to ensure renewable energy plays a growing part in the company’s business model with the goal to create significant internal carbon offsets.
Astra Innovations Pty Ltd has acquired a super majority interest in Green Gum, a patented rubber technology process that provides carbon credits and large margins in converting waste from rubber tyres into fine and superfine rubber granules. This technology uses low energy consumption and an environmentally friendly recycling process, with the resulting products used in a variety of industries.
Astra has acquired 76 per cent of Carbony Pty Ltd, the technology company that owns the intellectual property for a CO2 reduction technology, The technology separates the CO2 from sulphur dioxide (SO2) prior to combustion of carbon-containing matter, and is an attractive technology for heavy industries.
Astra has a super-majority interest in Green Diesel Corp Limited, which supplies a clean-burn, cost-effective diesel injector system which satisfies current and planned international legislation on diesel engine emissions and reduces fuel consumption. Green Diesel’s technology is being developed to produce diesel emissions which are significantly better than mandatory targets set by governments internationally.
Astra has an enviable list of global mining projects and opportunities in iron ore, coal and other steel making commodities. The key to Astra's success has been its ability to secure the supply chain of raw materials used in the steel making process, including high quality (63%+ Fe) iron ore. This enables effective delivery of T-Steel to the Chinese and Indian markets through lower costs of production. Astra's strategy is to work in partnership, often in developing countries, to identify open-cut mines that meet the following key screening criteria:
By identifying mines that are geographically diverse with assets close to end-users, where possible, vertical integration to create a business hedge with internal revenues and annuity streams such as mining services, Astra has aimed to protect itself against the adverse effects of commodity cycles.
Astra has an active interest in a number of projects including:
- Iron Ore, India: Astra has finalized the initial acquisition agreement for an iron ore mine in Orissa, India. Key trading and export licenses acquired.
- Iron Sands, Philippines: Astra is part of a JV owning a supermajority interest in a world scale iron sands development in North East Philippines. Geological studies and extensive sampling suggest there are 2 billion tonnes of iron sands available in the area, and possible extension to 9 billion tonnes. Future extension planned. Subject to due diligence.
- Thermal Coal, Nigeria: Initial acquisition by Astra in concert with its Nigerian partner is now complete, and is under expansion.
Astra Resources takes risk management seriously and actively seeks alternative opportunities to diversify its portfolio. Astra has identified a gold mining opportunity in Cambodia, for which the Company is incrementally acquiring. A favorable report on the site confirmed that the license area has the potential to host a world class Intrusion Related Gold System that may be developed into a significant open cut low cost gold mine. Intrusion Related Gold Systems have only been recognized in the last 12 years and have been shown to host some of the largest recently discovered gold deposits, with many similar systems typically hosting between one and three million ounces of gold. The acquisition of gold assets will enable Astra to effectively provide a hedge to the US dollar exposure of the resources in the steel value chain.
As a further risk management strategy Astra have entered into a commodity marketing and trading business, which will act as primary sales agent for the diverse range of Astra products to emerging nations. Astra’s commodity trading business will focus on China and India’s increasing need for agricultural products to fuel its population growth, which in turn increases the demand for raw materials for steel production, premium steel and power generation technology.
Astra’s risk management strategy therefore includes precious metals mining and commodities trading (as a principle for Astra’s own production only and not taking speculative positions), backed by developing skills in financial structuring.
Listing Astra Resources
Our listing of Astra Resources PLC on the Frankfurt Stock Exchange on September 30, 2011 was a significant milestone for the group and its investors. The Company's subsequent transfer to GXG Markets listing on 30 November 2012, however, has provided a more flexible mechanism for the Company's growth and, in furtherance of the Company's intention to list on the Regulated Market, Astra is preparing a prospectus which it hopes to release in early 2013.
Silvana De Cianni - Managing Director Astra Resources Plc