The age of the innovators Sandeep Biswas Managing Director and - - PowerPoint PPT Presentation

Sandeep Biswas Managing Director and Chief Executive Officer

Melbourne Mining Club, 9 February 2017

The age of the innovators

1

Remote drilling and charging Block cave drawpoint layout Water cannon

• perated from

inside cab

CASE STUDY

Finding a safer way to conduct secondary break activities

Innovation on the frontline

$0 $2 $4 $6 $8 1900 1920 1940 1960 1980 2000 Operating Cost Copper Price

Mining industry has consistently adapted

2

Pre-1975 data is estimated

Source: R.Schodde, MinEx Consulting, 2010, The key drivers behind resource growth: an analysis of the copper industry over the last 100 years, supplemented by data from Wood Mackenzie Y axis represents US$/lb C1 costs (in real 2016$ terms) for period 1900 – 2016. Data prior to 1975 is estimated

Copper price (US$/lb) v Operating cost over time (US$/lb)

Innovations have driven ~70% of reduction in cost base

3

Liberation Finding Big Scale-up Optimisation Control Digital

• Flotation
• Leaching
• Smelting
• Transport
• Gravity
• Big deposits
• Depression
• WWII
• Bulk explosives
• Bulk pit mining
• Large mills
• Float cells
• Caving
• Flash smelting
• Geo-models
• HPGRs
• Copper SXEW
• CIP
• Process control
• Optimisation
• Deep caving
• Instrumentation
• Bacterial oxidisation
• Automation
• Remote operations
• Artificial intelligence
• Drones
• Surface miners
• Mineral scanners

Age Innovations $0 $40 $80 $120 $160 $200 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

US$/tonne of ore

• 70%
• 60%
• 60%

Pre-1975 data is estimated

~30% from increased scale

Source: R.Schodde, MinEx Consulting, 2010, The key drivers behind resource growth: an analysis of the copper industry over the last 100 years Y Axis represents estimated average operating costs (US$/tonne of ore) for copper mines in the Western World: 1900-2009 including transportation, smelting & refining and marketing costs Trendline is a order 4 polynomial, projecting data to 2016

Application regularly lags ‘invention’ by many years

But we are slow to apply innovations

8 9 10 15 45

Jameson flotation cell, 1987 Fine grind IsaMills, 1994 Flotation, 1905 Large scale open stoping, 1960s High pressure grinding rolls, 1972 Nominal industry innovation adoption time in year

Australian development 30

Bulk explosives & mechanised mining, 1950s

Still progressing 36

Digital process control, 1980s

Still progressing

Sources: University of Queensland Professors Napier-Munn, McKee, Johnson, Knights, Chitombo

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Rising to the challenge: Productivity & grades in decline

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Total Factor Productivity (MPI)

• 3.5%

p.a.

• 2.7%

p.a.

Average grade estimate Global mine productivity (Calculated)

• 6.2%

p.a.

2004 to 2013 index CAGR

Source: McKinsey Basic Materials Institute (BMI Mining Model)

Processing innovations tackling declining grade

6

Levers Selective processing

2

Modern process control

1

Telfer

20%

throughput

CASE STUDY

Selective processing at Telfer

27%

Rising to the challenge: Increasing equipment utilisation

7

Paper mill Oil refining Open pit mining Underground mining Oil and Gas Crushing & grinding

Average Overall Equipment Efficiency (OEE)

39% 69% 85% 88% 92%

Source: McKinsey research and analytics

Mining companies use just a fraction of their data

<1%

Execution

Source: McKinsey Basic Materials Practice

Data management Data capture Analytics & Automation Visualisation Infrastructure Data not captured Data not streamed

• r stored

Data not accessible Data not communicated Data not used in decision making Operational information Data not analyzed Failure points

Open collaboration on big data delivering results

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This slide is not complete, so don’t worry about it, but I want the icon to ‘emphasise’ the experimental, collaborative and the fast adoption (and have ‘transformative vision’ as a secondary focus only).

SAG mill surge events

July 2016 Dec 2016 Hackathon Insights deliver improved performance

CASE STUDY

Unearthed Hackathons

• 500

500 1000 1500 2000 1900 1920 1940 1960 1980 2000 2020

Depth (metres)

Copper Nickel Zinc/Lead 10

Rising to the challenge: More new mines will be deeper

Base metal deposits found in the world between 1900-2013 We are progressively exploring under deeper cover

N = 1034. NB. Size of bubble refers to ‘Moderate’, ‘Major’ and ‘Giant’ sized deposits. Excludes Nickel Laterite deposits. Source: R. Schodde, MinEx Consulting, The Global Shift to Undercover Exploration, 2014

Innovation key to making deep, low-grade deposits viable

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Cadia

CASE STUDY

Bulk underground mining at Cadia East

The age of the innovators

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Ben, here we want to bring it all together. The main message at the end is that the future belongs to the

• innovators. And that we need to increase our level of innovation to deal with the challenges we face. I

don’t yet know what the best way to finish it is, will continue to think about this as you work on the other

• stuff. If you have any ideas though – an infographic, a metaphor, a collage of elements of previous

slides - please send them my way.