Orica Limited · ASX:ORI
Orica — Brisbane Mining Club (June 2013)
28 slides from Orica's conference presentation, Jun 4, 2013
Slide 1: Brisbane Mining Club
For personal use only Brisbane Mining Club 4 June 2013 Ian Smith - Managing Director and CEO © Orica Limited Group
Slide 2: Disclaimer
Disclaimer For personal use only Forward looking statements This presentation has been prepared by Orica Limited. The information contained in this presentation is for informational purposes only. The information contained in this presentation is not investment or financial product advice and is not
Slide 3: About Orica
For personal use only About Orica
Slide 4: Global Leader in Mining Services
Global Leader in Mining Services For personal use only 1. World’s largest provider of commercial explosives to mining and infrastructure markets with 28% global market share 2. Global leader in the provision of ground support in mining and tunneling 3. Leading global supplier of cyanide for use in g
Slide 5: Australian Base - Global Footprint
Australian Base - Global Footprint For personal use only ~15,000 Employees Operations in 50 countries Customers in over 100 countries
Slide 6: Australian Base - Global Footprint
Australian Base - Global Footprint For personal use only 2012 Orica Group Revenue • 90% of Group EBIT and over 80% of Group Revenue is generated Non- Mining, Coal - Thermal, from mining related industries 16% 25% including quarrying and construction Q&C, 13% • Broad mining exposure – from Coal - Cok
Slide 7: Orica in Queensland
Orica in Queensland For personal use only • Key manufacturing facilities supporting Queensland as well as national and international markets – Ammonium nitrate and emulsion manufacture (Yarwun) – Sodium cyanide manufacture (Yarwun) – Initiating systems manufacture (Helidon) • 930 employees across Qu
Slide 8: For personal use only
For personal use only
Slide 9: Industry Fundamentals
For personal use only Industry Fundamentals
Slide 10: Industry Fundamentals
Industry Fundamentals For personal use only • Long term growth in commodity volumes, driven by industrialisation and urbanisation • Declining ore grades and increasing strip ratios and ore-body complexity • Efficiency and productivity focus drives demand for game-changing technology, products and se
Slide 11: Growth in Global Commodity Demand: 2010 - 2030
Industry Fundamentals For personal use only Growth in Global Commodity Demand: 2010 - 2030 Nickel Copper Aluminium Zinc Lead Iron ore Coal 0 10 20 30 40 50 60 70 80 90 Change in global demand, 2010-2030 (%) Source: ABARES, Deloitte Access Economics – Commissioned by Minerals Council of Australia
Slide 12: Growth in Australia (1982 – 11)
Industry Fundamentals For personal use only 1,400 Growth in Australia (1982 – 2011) 1,200 Ammonium Nitrate Demand 1,000 CAGR 9.0% Index (1982 = 100) 800 Iron Ore & Minerals Prod. 600 CAGR 5.8% 400 200 Coal Production CAGR 4.4% 0 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2
Slide 13: Gold Production and Ore Grades; Cyanide Demand
Industry Fundamentals For personal use only Gold Production and Ore Grades Cyanide Demand 120 1.8 180 160 100 1.7 (Index: 2006=100) Gold Production 140 80 1.6 120 60 1.5 100 80 40 1.4 60 20 1.3 40 20 0 1.2 0 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 Global Gold Production Gold Ore
Slide 14: The Productivity Challenge
For personal use only The Productivity Challenge
Slide 15: Commodity Prices
Commodity Prices RBA Index of Commodity Prices For personal use only (Nominal Prices) 2011/12 Average = 100 180 160 140 120 100 80 60 40 20 0 Base Metals(1) Other Resources(2) 1: Base Metals: Aluminium, Copper, Lead, Zinc, Nickel 2: Other Resources: Metallurgical Coal, Iron Ore, Thermal Coal, Gold,
Slide 16: Productivity in Decline
Productivity in Decline For personal use only Multifactor Productivity Index1 1: Port Jackson Partners, “Opportunity at Risk. Regaining our competitive edge in minerals resources”, September 2012
Slide 17: Challenges to Productivity
Challenges to Productivity For personal use only Coal¹ Copper 6.0 3.0 2.5 Waste rock:ore (t/t) 5.7 bcm per raw tonne 2.0 5.4 1.5 5.1 1.0 4.8 0.5 4.5 0.0 2010 2012 2014 2016 2018 2020 2022 2024 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 8.0 Iron ore² Gold 3.0 Waste rock:ore (t/t) Waste rock:or
Slide 18: Aiding Productivity Through Technology
For personal use only Aiding Productivity Through Technology
Slide 19: Value in Use
Value in Use For personal use only The energy used (% of total site consumption) in completing the following functions on a typical mine drilling / blasting ~ 2% excavation / hauling ~ 10 % grinding / crushing ~ 53 % Optimising the use of explosives not only saves total energy consumed on a mine sit
Slide 20: Value in Use
Value in Use For personal use only Soft Ore Bond Work Index (BWI) = 15 Hard Ore Bond Work Index (BWI) = 25 4x increase in powder factor results in 4x increase in powder factor results in • 40% increase in mill throughput • 28% increase in mill throughput • 33% reduction in mill energy • 23% reductio
Slide 21: Value in Use
Value in Use For personal use only Mines are facing increasingly frequent challenging geological formations Thin & Intermittent Splitting Faulted Dipping “Through Seam Blasting” provides a solution to these by: • Increasing the percentage of resource recovered • Reducing strip ratio • Providing the
Slide 22: Value in Use
Value in Use For personal use only • Client pays for specification of rock size • Over last 12 months Orica has introduced high energy blasting products and techniques • In January 2013 review, client acknowledged Orica has added $25m in value over contract period
Slide 23: Value in Use
Value in Use For personal use only • Blasting constraints - fume, vibration, overpressure, dust, proximity to public highway • Patented StratablastTM technique implemented to help address these constraints • Results: • No fume or other environmental exceedances • 112% coal recovery against mine targ
Slide 24: Value in Use
Value in Use For personal use only Joint project with client to maximise underground advance development and blast cycles per day Currently achieving: • Length of each round fired is up 90% • Rounds fired per day is up by 129%
Slide 25: Overview
For personal use only Overview
Slide 26: Strategy
For personal use only Strategy
Slide 27: Margin Growth Initiatives
Margin Growth Initiatives For personal use only
Slide 28: Unique Profile and Opportunities
Unique Profile and Opportunities For personal use only Profile • Global market leadership • Strong manufacturing position • Attractive industry fundamentals • Multiple growth opportunities • Ground breaking technology Opportunities • Growth in commodity volumes, driven by industrialisation and urban