Bhp Group Ltd · ASX:BHP

Bhp — BHP Billiton — Corporate Update (April 2004)

57 slides from Bhp's corporate update, Apr 26, 2004

  1. Slide 1: Antamina two and a half years later

    Antamina two and a half years later… April 26, 2004 Analysts' Site Visit Slide 1

  2. Slide 2: Agenda

    Agenda • Introduction • Country Overview • Operations Overview • Environment, Health, Safety & Community • Production April 26, 2004 Analysts' Site Visit Slide 2

  3. Slide 3: Country Overview

    Country Overview April 26, 2004 Analysts' Site Visit Slide 3

  4. Slide 4: Economic Context

    Economic Context 2003A 2004F • GDP Growth 4.0% 4.0% • Inflation rate 2.5% 2.5% • Exchange rate (end of period) 3.46 3.50 • % Devaluation (Appreciation) -1.4% 0.0% • Exports (US$ Millions) 8,954 10,300 • Imports (US$ Millions) 8,244 8,800 • Fiscal Deficit (% of GDP) 1.9% 1.6% April 26, 2004 Analysts'

  5. Slide 5: Macroeconomic Situation

    Macroeconomic Situation • Low and stable inflation interest rates. • Stable exchange rate. • Declining Country risk: 337 basis points • Mining exports leading growth. • Main concerns: – Government debt – Political turmoil – Unrest April 26, 2004 Analysts' Site Visit Slide 5

  6. Slide 6: Fiscal Situation

    Fiscal Situation • Higher spending, higher taxes to lower deficit. • Non flexible public expenses – 86% of public spending on pensions, debt service and payroll • Public debt: – 25% of public spending – 4.8% of GDP • Government requires more revenue to remain solvent – ITF and other new taxes April

  7. Slide 7: Privatization Process

    Privatization Process • 2003 proceeds: $13.3 million versus budget of $500 million. • Government re-launching privatization: – New head of ProInversion – Budgeted proceeds in 2004: $400 million – Congress not aligned with Government’s strategy to attract investment – Successful privatization of Yunc

  8. Slide 8: Economic Policy

    Economic Policy • Good external image: –– “Peru “Peru is is doing doing aa lot lot in in macroeconomics macroeconomics but but needs needs more more dynamism dynamism in in microeconomics microeconomics and and labor labor issues” issues” (The (The Economist, Economist, March March 2004) 2004) –– 63

  9. Slide 9: Political Context

    Political Context • Halfway through its mandate, the Government is still losing popularity: • Opposition is leading the political debate. • Congress, judiciary and new Regional Governments are also very unpopular. April 26, 2004 Analysts' Site Visit Slide 9

  10. Slide 10: President Toledo's Popularity

    President Toledo’s Popularity Do Do you you approve approve or or disapprove disapprove the the manner manner in in which which President President Alejandro Alejandro Toledo Toledo manages manages thethe country´s country´s affairs? affairs? APPROVES NO OPINION 9% 2% Source: Source: Apoyo Apoyo S.A

  11. Slide 11: Will Toledo Finish his Term?

    Will Toledo Finish his Term? • Economy: mostly under control. • Demonstrations: not many in 2004, so far. • Anti-system movement (Antauro Humala): not powerful. • Opposition: at the moment, not keen to see the Government fall. • Pro Fujimori movement: not powerful alone. • Government corruption scan

  12. Slide 12: General Context for CMA

    General Context for CMA • Main concerns – Labor relations at a national level; – Difficulties maintaining constructive dialogue; – Very low Government approval ratings. April 26, 2004 Analysts' Site Visit Slide 12

  13. Slide 13: CMA Response

    CMA Response • Remain neutral but engaged. • Aggressive communications effort. • Developing grass-roots support through community development programs. • Well positioned to weather political storms. April 26, 2004 Analysts' Site Visit Slide 13

  14. Slide 14: Operations Overview

    Operations Overview April 26, 2004 Analysts' Site Visit Slide 14

  15. Slide 15: Ownership

    Ownership % BHP Billiton 33.75 Noranda Inc. 33.75 Teck Cominco Limited 22.50 Mitsubishi Corporation 10.00 100.00 April 26, 2004 Analysts' Site Visit Slide 15

  16. Slide 16: Organization

    Organization Board of Directors Advisory Committee President & CEO Operations EHSC Corporate Finance & Affairs & Admin Marketing Marketing Human Resources April 26, 2004 Analysts' Site Visit Slide 16

  17. Slide 17: Initial Investment

    Initial Investment (December 31, 2001) Mining equipment and preproduction stripping 286 Concentrator and ancillary facilities 771 Concentrate pipeline 128 Port 108 Infrastructure (road, camp, power) 128 Other Owners Costs 340 1,761 Acquisition, Land, Exploration, Feasibility 204 Financing and workin

  18. Slide 18: CMA's area of influence

    “Punta Lobitos” Antamina Location Lima - Mine: Eastern range of the Andes, CMA’s area of between 4,200 y 4,700 masl. - Port: Near Huarmey. influence

  19. Slide 19: Infrastructure

    Infrastructure • Access Road: – 120 km from Laguna Conococha to mine site. – Upgraded 44 km of existing road. – Built 76 km of new road in very challenging conditions. • Power: – Switching station and 58 km, 220 kV power line to supply 120 MW to mine site. – 5.5 km, 66 kV power line to supply 3 MW t

  20. Slide 20: Reserves & Resources

    Reserves & Resources December December 31, 31, 2003 2003 Million Cu Zn Ag Mo Tonnes % % g/t % Mineral reserve estimate Proven 275 1.27 1.01 14.1 0.03 Probable 226 1.17 0.90 13.2 0.03 Total 501 1.22 0.96 13.7 0.03 1 Mineral resource estimate Measured 28 0.50 0.20 4.9 0.03 Indicated 31 0.47 0.27 5.9 0

  21. Slide 21: Ore Reserves by Ore Type

    Ore Reserves by Ore Type 5 4 Copper Low Bismuth (M1) Copper High Bismuth (M2) Copper Zinc Low Bismuth 24 41 (M3) Copper Zinc High Bismuth(M4) Bornite Low Zinc (M5) Bornite High Zinc (M6) 10 18 April 26, 2004 Analysts' Site Visit Slide 21

  22. Slide 22: Mining Phases

    Mining Phases 4815 masl First 2 years of production 4103 masl Deposit outline 3788 masl April 26, 2004 Analysts' Site Visit Slide 22

  23. Slide 23: Major Mining Equipment

    Major Mining Equipment Bucyrus 49R Drill 5 Bucyrus 495 B Shovel 4 Cat 994 Loader 3 Cat 793 Haul Truck 43 April 26, 2004 Analysts' Site Visit Slide 23

  24. Slide 24: Process Overview

    Process Overview Run-of-Mine Ore Primary Crushing Coarse Ore Stockpile SAG/Ball Milling Copper (Bulk) Flotation Zinc Flotation Mo/Bi Separation Tails to Impoundment Concentrate Thickening and Storage Mo and Bi Concentrate Concentrate Pipeline Mine Site Port Site Dewatering Water Treatment To Irrigat

  25. Slide 25: Primary Crusher & Stockpiles

    Primary Crusher & Stockpiles April 26, 2004 Analysts' Site Visit Slide 25

  26. Slide 26: Crushing

    Crushing • Single 60” by 89” gyratory crusher. • Crushed ore conveyed through 2.7 km tunnel. • Radial stacker loads twin stockpiles each with 50,000 dmt live capacity. • Three feeders under each stockpile. April 26, 2004 Analysts' Site Visit Slide 26

  27. Slide 27: Concentrator

    Concentrator • Single 11.6 m by 6.4 m SAG mill. • Three 7.3 m by 11.0 m ball mills. • All mills variable speed direct drive. • Copper flotation circuit. • Zinc flotation circuit. • Bismuth/moly cleaning circuit. April 26, 2004 Analysts' Site Visit Slide 27

  28. Slide 28: Concentrate Pipeline

    Concentrate Pipeline • 302 km from concentrator to filter plant. • 10” to 8” diameter pipe. • Single pump station at the mine site. • 4 valve stations • Zero problems with multiple concentrates. • Design throughput: 1.8 million dmt/year. April 26, 2004 Analysts' Site Visit Slide 28

  29. Slide 29: Port Facilities

    Port Facilities • Concentrate slurry storage tanks. • Filter plant with four pressure filters • Concentrate storage shed: – Capacity: 180,000 wmt of a single product, lower with multiple products. • Pier and ship loader. • Water treatment facility and tree plantation. April 26, 2004 Analysts' Site V

  30. Slide 30: Customers

    Customers April 26, 2004 Analysts' Site Visit Slide 30

  31. Slide 31: Customers

    Customers • 75% of production is sold under long term contract. – 12 high-quality customers in 9 countries. – Japan, Korea, Canada, Sweden, Finland, Germany, Belgium, Australia, Bulgaria. • Balance of output is sold under spot and short term contracts to smelters and traders: – Chile, Peru, China, G

  32. Slide 32: Human Resources

    Human Resources National Labour 940 National Staff 403 Expatriate 28 Trainees and Temporary 70 1,441 April 26, 2004 Analysts' Site Visit Slide 32

  33. Slide 33: Environment, Health, Safety & Community

    Environment, Health, Safety & Community April 26, 2004 Analysts' Site Visit Slide 33

  34. Slide 34: EHS Management System

    EHS Management System Commitment and Management Review Policy Checking and Continuous Improvement Planning Corrective Action Implementation April 26, 2004 Analysts' Site Visit Slide 34

  35. Slide 35: EHS Audit Program

    EHS Audit Program • Internal Inspections and Audits. • Shareholder Audits. • Lender Oversight – World Bank EH&S Guidelines • Independent Tailings Review Board. • Government. • Stakeholders. April 26, 2004 Analysts' Site Visit Slide 35

  36. Slide 36: Environmental Programs

    Environmental Programs • Permits and Authorizations. • Public consultation. • Monitoring Programs: – Water quality – Aquatic life – Air quality • Erosion Control and Revegetation Program. • Solid and hazardous waste management program. April 26, 2004 Analysts' Site Visit Slide 36

  37. Slide 37: Permits

    Permits w Over 300 permits. First experience for many regulatory agencies. Types of permits required : • Construction. • Water discharge. • Operations. • Fuel tanks. April 26, 2004 Analysts' Site Visit Slide 37

  38. Slide 38: Public Consultation Process

    Public Consultation Process • Public Hearings and Open House in Lima. • Public Meetings in Project Area. • EIA Widely Distributed, placed on Peruvian Mining and Energy Ministry web site. April 26, 2004 Analysts' Site Visit Slide 38

  39. Slide 39: Building a Sustainable Culture of Safety Awareness

    Building a Sustainable Culture of Safety Awareness • Standards. • Training. • Inspections and audits. • Continuous improvement . April 26, 2004 Analysts' Site Visit Slide 39

  40. Slide 40: Safety Programs

    Safety Programs • STOP. • ISTEC. • Safety Values. • Senior Management EHS Committee. • Contractor Management. • Inspections and Audits. • Transport Management. • Training. • Occupational Health. April 26, 2004 Analysts' Site Visit Slide 40

  41. Slide 41: Risk Management

    Risk Management • Risk Assessments. • Action Plans. • Response Plans. • Risk Audits. • Rescue Team. • Transportation Management. April 26, 2004 Analysts' Site Visit Slide 41

  42. Slide 42: Stakeholder Programs

    Stakeholder Programs • Communities. • Environmental Committees. • Government. • NGOs. • Universities. • Municipalities. • Regional working groups. April 26, 2004 Analysts' Site Visit Slide 42

  43. Slide 43: Environmental Committees

    Environmental Committees • Created as an official communication channel between CMA and communities – Provide technical environmental information – Receive a feedback from local residents • Established in: – San Marcos – Ayash Basin – Huarmey – Huallanca April 26, 2004 Analysts' Site Visit Slide 43

  44. Slide 44: EHS Stakeholder Programs Working Groups

    EHS Stakeholder Programs Working Groups • Regional working groups consisting of mining companies, communities, government, and NGOs: – Grupo de Trabajo PN Huascarán – Consejo Ambiental Regional (CONAM) – TMI, SPDA, VIDA April 26, 2004 Analysts' Site Visit Slide 44

  45. Slide 45: Community Development Strategy

    Community Development Strategy • The community leads in planning its development. It is necessary to change attitudes. • Local Development Committee ( Mesa de Concertación ): includes all the stakeholders, CMA acts as a facilitator • The community approves the development plan and budget, and monito

  46. Slide 46: Principles of CD Programs

    Principles of CD Programs i i Avoid paternalism, through promoting sustainable development. i Supply tools for individual and collective i development. i i Attract Government and multinational agencies contributions. i Complement, not replace, government i responsibilities. i Respect local culture,

  47. Slide 47: Objectives of CD Programs

    Objectives of CD Programs i i Upgrade the quality of life by improving education and health services. i i Improve agricultural and livestock-raising practices. i i Promotion of small enterprises. i i Support cultural activities. April 26, 2004 Analysts' Site Visit Slide 47

  48. Slide 48: Production

    Production April 26, 2004 Analysts' Site Visit Slide 48

  49. Slide 49: Lake Sediments

    Lake Sediments • Original schedule was to complete removal of lake sediments by end of Q3 2003. • Fatal accident in November 2002 required new approach to sediment removal: – Long-line excavator added in March 2003; – Long-line effective but sporadic in first six months of use. – Revised schedule de

  50. Slide 50: Mine Production

    Mine Production 40 Ore rehandle Waste, expense & rehandle 35 Waste mined Ore mined 30 25 million dmt 20 15 10 5 0 Q1 02 Q2 02 Q3 02 Q4 02 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 April 26, 2004 Analysts' Site Visit Slide 50

  51. Slide 51: Daily Milling Rate

    Daily Milling Rate 90 80 000 dmt per day 70 60 50 40 Q1 02 Q2 02 Q3 02 Q4 02 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 April 26, 2004 Analysts' Site Visit Slide 51

  52. Slide 52: Mill Feed by Ore Group

    Mill Feed by Ore Group 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Q1 02 Q2 02 Q3 02 Q4 02 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Cu Only Cu Zn April 26, 2004 Analysts' Site Visit Slide 52

  53. Slide 53: Head Grades

    Head Grades 2.25% Copper Zinc 2.00% 1.75% 1.50% 1.25% 1.00% 0.75% Q1 02 Q2 02 Q3 02 Q4 02 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 April 26, 2004 Analysts' Site Visit Slide 53

  54. Slide 54: Recoveries

    Recoveries 90% Copper Zinc 85% 80% 75% 70% Q1 02 Q2 02 Q3 02 Q4 02 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 April 26, 2004 Analysts' Site Visit Slide 54

  55. Slide 55: Payable Metal Production

    Payable Metal Production 200 Copper Zinc 175 150 million lbs 125 100 75 50 Q1 02 Q2 02 Q3 02 Q4 02 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 April 26, 2004 Analysts' Site Visit Slide 55

  56. Slide 56: C1 Cash Costs

    C1 Cash Costs 50 45 40 ¢/payable lb Cu sold 35 30 25 20 15 10 5 0 Q1 02 Q2 02 Q3 02 Q4 02 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 April 26, 2004 Analysts' Site Visit Slide 56

  57. Slide 57: Strengths

    Strengths • Long life: 19 years, with upside potential. • Scale: 3rd largest Zn producer, 7th largest Cu producer. • Project execution: – Under budget, ahead of schedule. • Low risk: – Operating above design production rates. – C1 cash costs in lowest quartile. • Upside on production rates. April 26

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