Orica Limited · ASX:ORI
Orica — Corporate Update (July 2013)
52 slides from Orica's corporate update, Jul 30, 2013
Slide 1: Orica Kooragang Island and Kurri Kurri Site Visit 2013
Orica Kooragang Island and Kurri Kurri Site Visit 2013 1
Slide 2: Mining Services Australia Pacific Business Overview
Mining Services Australia Pacific Business Overview James Bonnor – GM Mining Services APAC 30th July 2013 © Orica Limited Group
Slide 3: Mining Services AusPac Regional Contribution and Commodity Exposure
Mining Services AusPac Regional Contribution and Commodity Exposure Coal has traditionally dominated Orica’s commodity exposure in Australia Pacific, given the scale of customers and AN plant locations in the North East and South East Regions. As mining operations in the Pilbara continue to expand,
Slide 4: AusPac Exposure by Commodity and Segment
AusPac Exposure by Commodity and Segment The Open Cut segment accounted for a clear majority of revenue in FY2012, although regional exposure to the Underground segment has increased as a consequence of the integration of the Ground Support and Mining Chemicals businesses. AusPac Business: AusPac Bu
Slide 5: Mining Services Operations Australia Pacific
Mining Services Operations Australia Pacific Mining Services has 133 downstream operations sites across explosives. 5 Ammonium Nitrate/AN Storage 7 Distribution 3 ANE Manufacturing Bulk Site 8 Emulsion Manufacturing Plants 2 Head Office/Mag (PNG) 69 Open Cut DTH/TBS/ROG/BMS 3 Packaged/Amex Plants 12
Slide 6: Australia - Manufacturing and Supply Chain Infrastructure
Australia - Manufacturing and Supply Chain Infrastructure Mining Services has numerous manufacturing sites along with dedicated storage facilities strategically located across the region. Initiating Systems Wyndham Manufacturing Facility AN Import Limit Packaged Explosives 5,000mt Port Hedland Manuf
Slide 7: Total AN Imports Into Australia Are Declining
Total AN Imports Into Australia Are Declining Tonnes AN Imports Into Australia 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 - Feb-11 Mar-11 Apr-11 May-11 Jul-11 Oct-11 Feb-12 Mar-12 Apr-12 May-12 Jul-12 Oct-12 Feb-13 Mar-13 Apr-13 May-13 Jan-11 Jun-11 Aug-11 Sep-11 Nov-11 Dec-11 Jan
Slide 8: Chinese AN Imports
Chinese AN Imports Contentsvolumes prior to Moranbah commissioning, Increasing now trending lower Chinese AN Imports Into Australia Tonnes 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - Monthly Volume 3 Month Moving Average Volume Source: ABS Slide 8
Slide 9: Mining Services AusPac – Manufacturing and Key Sourcing
Mining Services AusPac – Maufacturing and Key Sourcing Orica has a manufacturing and soucing base that is unrivalled across the region which is essential for market competitiveness, supply flexibility and contingency Facility Product Capacity (tonnes) Facility Product Capacity (tonnes) Kooragang Isl
Slide 10: Mining Services AusPac Operational Dimensions
Mining Services Aus Pac Operational Dimensions Orica has a significant investment in infrastructure, equipment and people to support a downstream services business which is in excess of $280m revenue per annum. 133 Operational & Down Stream Manufacturing Sites 213 Mobile Manufacturing Units (MMU’s)
Slide 11: Mobile Units
Mobile Units 281 Mobile Units in open cut and underground mines across the region, loading approximately 1.15m tonnes of blended explosives per annum Slide 11
Slide 12: Mining Services AusPac – Services Mix
Mining Services AusPac – Services Mix More than 84% of explosive product contracts, have a services component Do It Yourself/Product Only (DIY) + Customer Operated Systems (HCD’s) • Contract to/or sell product only or product and lease HCD’s to FY12 Sales by Service Type customers. UG Applications H
Slide 13: On Bench Operations
On Bench Operations Orica supports over 84% of its product contracts with loading services on a daily basis This product and services mix provides the ideal platform for the selling of more advanced tecnological solutions aligned with customer needs Slide 13
Slide 14: Products, Services, Technology, Tools And Design Solutions To Meet Customer Needs
Products, Services, Technology, Tools And Design Solutions To Meet Customer Needs Customer Needs Productivity and/or Recovery (of coal/ Safe and efficient Reliability, Flexibility Environmental impact cost improvements mineral) operations and speed •Cost downs •Reduced coal / •Airblast/ Vibration •Q
Slide 15: Products – Part Of The Bundle To Provide Customer Value
Products – Part Of The Bundle To Provide Customer Value Mining Chemicals Ground support Resin capsules, bolting systems, specialised cement grouts, ground injection resins, ventilation systems Mining services to open cut and underground mining, tunnelling, quarrying and civil construction Bulk Explo
Slide 16: Products And Services From Mining Services – Innovative Solutions
Products And Services From Mining Services – Innovative Solutions To Meet Customer Needs Open Cut Underground Civil Tunnelling Quarries and Construction Bulk and Packaged Explosives Coal, Advantage, Deep, Eclipse, Eclipse Plus, Extra, Xtreme, Vulcan, Vulcan Plus, Clear, Charge, Velcro, Control, Mara
Slide 17: Value In Use
Value In Use Nigel Pereira – Regional Services Manager APAC 30th July 2013 © Orica Limited Group
Slide 18: Content
Content Challenges facing our customers industry ? Why is Orica uniquely positioned ? How are we assisting customers ? What is different today ? Slide 18
Slide 19: Key Issues Facing The Mining Industry
Key Issues Facing The Mining Industry • Many mining deposits are becoming deeper and more complex: - Higher strip ratios - Declining ore grades • Larger equipment is demanding higher productivity and faster rates of advance. • Miners are continually striving to reduce Total Cost of Ownership (TCO).
Slide 20: Well Positioned To Meet These Challenges
Well Positioned To Meet These Challenges • Blasting has significant influence on mine performance. mining services • Our offer is uniquely positioned to meet bulk & packaged explosives mining needs, such as: electronic blasting systems mining chemical systems • blast emission reductions ground suppo
Slide 21: Meeting Customer Needs Through Integrated Products, Services and Solutions
Meeting Customer Needs Through Integrated Products, Services and Solutions Slide 21
Slide 22: Differentiated Product Range
Differentiated Product Range We look at bulk products through a customer needs lens. Wall control Metal mines ore processing Maximising drilling efficiency Minimum damage, maximum control High fragmentation energy ‘Commoditised’ blasting Standard products Minimum fines Coal mines muckpile shaping Ca
Slide 23: Differentiated Product Range
Differentiated Product Range A differentiated product range matched to customer needs. Wall control ‘Commoditised’ Metal mines ore processing Blasting Maximising drilling efficiency Minimum fines Coal mines muckpile shaping Caprock control Maximising drilling efficiency Slide 23
Slide 24: AEISG code of practice for blast generated nitrogen oxide gases
In 2010 the Australian Explosives Industry Safety Group (AEISG) members released the first code of practice for the prevention and management of blast generated nitrogen oxide gases in surface blasting. Slide 24
Slide 25: Recognised Leadership In Blast Emission Reductions
Recognised Leadership In Blast Emission Reductions Background • community and regulatory pressure to reduce post blast fume events in QLD & NSW • major contributor to industry code of practice • development of integrated approach to fume mitigation Critical Success Factors Implemented • engagement p
Slide 26: Coal Loss Inefficiencies
Coal Loss Inefficiencies Many mining deposits are becoming more complex. Equipment is getting bigger and hungrier. However the industry is experiencing large coal loss inefficiencies. Slide 26
Slide 27: Case Study - Coal Loss & Productivity
Case Study - Coal Loss & Productivity Slide 27
Slide 28: Case Study - Coal Loss & Productivity
Case Study - Coal Loss & Productivity Results • no fume or other environmental exceedances • 112% coal recovery against mine target • washery yield improved from ~74% to 82% • dragline saving of 6 days per 1.3km strike length Slide 28
Slide 29: Industry trending towards underground, low cost and mass production caving methods
Industry trending towards underground, low cost and mass production caving methods. Slide 29
Slide 30: Case Study - Block Cave Progression
Case Study - Block Cave Progression Reduction in cost and time. 2 3 1 Major Apex Major Drawbell Drawbell Apex Drawbell 1 Drawbell 2 No Undercut or Double Undercut Single Undercut Single-Level Novel Technique Slide 30
Slide 31: Case Study - Block Cave Progression
Case Study - Block Cave Progression Previous Process Novel Technique Slide 31
Slide 32: Case Study - Block Cave Progression
Case Study - Block Cave Progression Voice of the Customer “I wanted to let you know the undercut shot was a great success. I want to congratulate the Orica team for all their efforts and time spent to develop this concept and make it happen. I especially want to let you know how professional your te
Slide 33: Significant Payback Ratios
Significant Payback Ratios Payback ratios from drill and blast spend in open cut metal mines are significant. 4x 9x 17x Slide 33
Slide 34: Step Change Products And Novel Blasting Techniques For Open Cut Metal Mines
Step Change Products And Novel Blasting Techniques For Open Cut Metal Mines In existing patterns, SAG mill feed has increased to up to 70% using the Ultra High Intensity Blasting (UHIB) technique. Last 12 months Loading Mine to Plant Service contract contract Ultrablast Relative Bulk Strength 250 20
Slide 35: Product Developments To Meet Customer Needs – High Energy Bulk
Product Developments To Meet Customer Needs – High Energy Bulk 35 Slide 35
Slide 36: Novel Blasting Techniques – Ultra High Intensity Blasting
Novel Blasting Techniques To Meet Customer Needs – Ultra High Intensity Blasting Throughput / Revenue Advantages 28% increase in mill throughput for powder factor increase of 4 X. Significant gains in energy per ton, throughput and revenue are very likely. Slide 36
Slide 37: Novel Blasting Techniques – Ultra High Intensity Blasting
Novel Blasting Techniques To Meet Customer Needs – Ultra High Intensity Blasting High Energy using traditional blast design. Same Energy using Novel blast design. Slide 37
Slide 38: Novel Blasting Techniques - Ultra-High Intensity Blasting
Novel Blasting Techniques To Meet Customer Needs - Ultra-High Intensity Blasting Field trials are validating results. Slide 38
Slide 39: Alignment of strategy & structure to customer drivers
Alignment of strategy & structure to customer drivers. Slide 39
Slide 40: How Orica's Approach To Value In Use Is Different Today
How Orica’s Approach To Value In Use Is Different Today Strategy 1. clear and aligned strategy 2. organisation alignment 3. commercialisation process and management 4. customer outcome focus Relative Bulk Strength Last 12 months Loading Mine to Plant 250 Service contract contract Ultrablast 5. offer
Slide 41: Kooragang Island Ammonia and Ammonium Nitrate Plant
Kooragang Island Ammonia and Ammonium Nitrate Plant Greg Holmes – General Manager Kooragang Site 30th July 2013 © Orica Limited Group
Slide 42: Agenda
Agenda Your Safety at KI KI Operations KI Improvement Program Ammonia Risk Reduction
Slide 43: Your Safety
Your Safety Potential Onsite Hazards • heavy vehicle traffic • uneven ground • operating equipment • toxic gases (ammonia, nitrogen oxide, chlorine) In the event of a site emergency • A siren will sound. • Upon hearing the siren move to the nearest safe house (your guide will know the way). • Once i
Slide 44: Orica in the Hunter Region
Orica in the Hunter Region Orica employs around 650 people in manufacturing, sales and marketing, operations and research and development teams across a number of sites. During normal operation, Kooragang Island employs 220 permanent employees and around 80 contractors. During site maintenance, thes
Slide 45: Orica in the Hunter Region
Orica in the Hunter Region Ammonium Nitrate Nitric Acid • Raw material for • Ammonium nitrate explosives • Cleaning in dairy sector ~430kt Ammonia CO2 • Nitric acid and ammonium • KI supplies 50% of the nitrate NSW Market • Fertiliser • Carbonated drinks and • Water treatment beer • Pollution contro
Slide 46: Manufacturing Excellence
Manufacturing Excellence A deep dive has been performed into Kooragang Island operations • Structural, operational and process improvements underway and key deliverables identified for the next 12 months. • Plant improvements implemented to reduce the risk of major incidents. Results already achieve
Slide 47: Kooragang Island Operations
Kooragang Island Operations AN Plants Ammonium Nitrate Ammonia Nitric Acid Ammonia Nitric Acid Plants Ammonia Plant Natural Gas
Slide 48: Site Improvement Programme
Site Improvement Programme Improvements in SHEC performance to progress the site towards world class • Organisation restructure including new management roles People • Operational restructure in progress • Improvements to Permit to Work, Management of Change Process • Improvements to Projects – doin
Slide 49: Plant Improvements Projects
Plant Improvements Projects Improvement Capital Spend KI Sustenance Capital Spend 100 • 2011 $20M 80 Annual Spend (M) • 2012 $35M 60 40 • 2013 $75M (budgeted) 20 • 2014 decline in expenditure 0 2006 2007 2008 2009 2010 2011 2012 2013 Ammonia Risk Reduction 2012/2013 • $5M spent in implementation of
Slide 50: KI Management Process
KI Management Process General Manager KI Projects Manager Area Project Leads Project Engineers
Slide 51: KI Management Process
KI Management Process Maintenance Measurable Results $9.1M Of Ideas In Pipeline Overdue Equipment Inspections Reduced To 0 $9.1M 600 Forecast overdue SI Annualised Value • increase schedule compliance 450 Actual Overdue SI Production • consolidate outages 5.6 Increase • implement RCA process 300 • o
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