Slide 1: ASX cover letter - Northparkes site visit presentation
120 Collins Street Melbourne 3000 Australia Postal Address: GPO Box 384D Melbourne 3001 Australia T +61 (0) 3 9283 3333 F +61 (0) 3 9283 3707 For personal use only ASX Market Announcements Australian Securities Exchange SYDNEY NSW 2000 27 August 2012 Dear Sir, Attached is a presentation given by Joh
Slide 2: John McGagh, Head of Innovation, August 2012
For personal use only John McGagh Head of Innovation August 2012
Slide 3: Cautionary statement
27 August 2012 © 2012, Rio Tinto, All Rights Reserved 2 Cautionary statement For personal use only This presentation has been prepared by Rio Tinto plc and Rio Tinto Limited (“Rio Tinto”) and consisting of the slides for a presentation concerning Rio Tinto. By reviewing/attending this presentation y
Slide 4: Why innovate?
27 August 2012 © 2012, Rio Tinto, All Rights Reserved 3 Why innovate? For personal use only Be better, safer, faster • Improve safety • Improve capital productivity • Improve labour productivity • Find new ore bodies • Recover from difficult ore bodies • Extend resource life • Improve recovery rates
Slide 5: The scramble for resources is creating new strategic challenges
27 August 2012 © 2012, Rio Tinto, All Rights Reserved 4 The scramble for resources is creating new strategic challenges for the industry For personal use only Market volatility Stakeholder expectations Capital intensity Daily commodity prices Copper project (Jan 2009 = 100) Capex/tonne 400 Prices at
Slide 6: Productivity in the Australian mining sector
27 August 2012 © 2012, Rio Tinto, All Rights Reserved 5 Productivity in the Australian mining sector For personal use only Multifactor productivity (MFP) index - mining 155.0 145.0 135.0 125.0 115.0 MFP Index 105.0 95.0 85.0 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 199
Slide 7: Innovation technologies are a key differentiator
27 August 2012 © 2012, Rio Tinto, All Rights Reserved 6 Innovation technologies are a key differentiator For personal use only Our Mine of the Future™ provides an integrated approach to unlocking value Find Develop Mine Recover • Find future tier one • Develop future block • Optimise resource • Reco
Slide 8: Rio Tinto innovation network model
27 August 2012 © 2012, Rio Tinto, All Rights Reserved 7 Rio Tinto innovation network model For personal use only 55 3 6& 6&4 11 4 2 2&8 1 6 Rio Tinto centres Technology partnerships Formal long term (around 5 years) Strategic partnerships and MoUs alliances with world class institutions with leading
Slide 9: Rio Tinto Innovation Centre
27 August 2012 © 2012, Rio Tinto, All Rights Reserved 8 Rio Tinto Innovation Centre For personal use only • State-of-the-art innovation centre in Pune, India supports global growth and development of Mine of the Future™ • Provides engineering research and development services, including industrial a
Slide 10: Rio Tinto Centre for Advanced Mineral Recovery
27 August 2012 © 2012, Rio Tinto, All Rights Reserved 9 Rio Tinto Centre for Advanced Mineral Recovery For personal use only
Slide 11: Protecting our intellectual property
27 August 2012 © 2012, Rio Tinto, All Rights Reserved 10 Protecting our intellectual property For personal use only Idea Proof of Pilot Demo Deploy Support Concept • Structured control & governance • Data management & security • Rigorous investment proposals • Freedom-to-operate • Patent families an
Slide 12: Mine of the Future - mineral recovery
27 August 2012 © 2012, Rio Tinto, All Rights Reserved 11 Mine of the Future™ - mineral recovery For personal use only Rationale: How we recover more from increasingly difficult mineralization? Rio Tinto has been working with our partners to uncover ways of recovering more valuable product from incre
Slide 13: Increasing our recovery of valuable minerals
27 August 2012 © 2012, Rio Tinto, All Rights Reserved 12 Increasing our recovery of valuable minerals For personal use only Host Rock Copper Copper Mineral Mineral (Value) (Value) in Host Rock
Slide 14: Excite Detect Separate (eXDS) technology platform
27 August 2012 © 2012, Rio Tinto, All Rights Reserved 13 Excite Detect Separate (eXDS™) A technology platform For personal use only eXDS TM TM R IronX NuWave Others
Slide 15: Copper NuWave (eXDS)
27 August 2012 © 2012, Rio Tinto, All Rights Reserved 14 Copper NuWave™ (eXDS™) For personal use only Idea • Shares IronX™ technology components Started • Science genesis ~2000 Proof of Concept • Upgrade marginal ore or waste material Pilot Value • Reduced energy consumption – leverage energy Levers
Slide 16: Value Levers - Copper NuWave
27 August 2012 © 2012, Rio Tinto, All Rights Reserved 15 Value Levers – Copper NuWave™ For personal use only Increased concentrator throughput – more tonnes/$ invested Recover copper from waste streams Absolute increase in recovery Copper PG value studies underway: • La Granja • Escondida • KUC
Slide 17: Copper NuWave pilot at Kennecott
27 August 2012 © 2012, Rio Tinto, All Rights Reserved 16 Copper NuWave™ pilot at Kennecott For personal use only • Pilot plant built and tested, now in operation • Designs for scale up in place • Tomra partnership for developing sorting machine
Slide 18: Optimising the flotation process
27 August 2012 © 2012, Rio Tinto, All Rights Reserved 17 Optimising the flotation process For personal use only
Slide 19: Modelling and Process Automation
27 August 2012 © 2012, Rio Tinto, All Rights Reserved 18 Modelling and Process Automation For personal use only Bubbles heavily loaded. Froth flows too slowly Optimum balance between froth stability and motion Bubble under-loaded Froth flows fast but Burst before overflow = High recovery and g
Slide 20: Mine of the Future - underground
27 August 2012 © 2012, Rio Tinto, All Rights Reserved 19 Mine of the Future™ - underground For personal use only Rationale: How we will go underground: deeper, faster, safer, better Rio Tinto has been working to improve the existing drill and blast process, and has been investigating the development
Slide 21: Improving traditional processes
27 August 2012 © 2012, Rio Tinto, All Rights Reserved 20 Improving traditional processes For personal use only
Slide 22: Underground innovation trials
27 August 2012 © 2012, Rio Tinto, All Rights Reserved 21 Underground innovation trials For personal use only Aker Wirth Tunnel Herrenknecht Shaft Atlas Copco Tunnel Boring System Boring System Boring System Trial to start at Northparkes For sinking large diameter In construction trial site Mine, Aus
Slide 23: Tunnel borer
27 August 2012 © 2012, Rio Tinto, All Rights Reserved 22 Tunnel borer For personal use only
Slide 24: Excellence Centres - Maximize Productivity
27 August 2012 © 2012, Rio Tinto, All Rights Reserved 23 Excellence Centres – Maximize Productivity For personal use only Idea Proof of Concept Pilot Demo Deploy Support
Slide 25: Operations & Excellence centres
24 27 August 2012 © 2012, Rio Tinto, All Rights Reserved Operations & Excellence centres……. For personal use only Operations Centre Excellence centre • Aligning and integrating • Optimisation of mine to metal, systems “experts-on-line” • Value chain and logistics • Real time (24x7) remote optimisati
Slide 26: Excellence Centre - Architecture
27 August 2012 © 2012, Rio Tinto, All Rights Reserved 25 Excellence Centre - Architecture For personal use only Connect to and interrogate real- Condition based monitoring time read-only process data and support, immediate from remote sites, real time and real-time site feedback Asset Communication
Slide 27: Block Cave Mining: The Future of Large-Scale Underground Copper Mining
For personal use only Block Cave Mining The Future of Large-Scale Underground Copper Mining August 2012
Slide 28: Context - what is block caving?
For personal use only Context – what is block caving? The Value Proposition Risks Towards Block Cave Excellence
Slide 29: Block Caving Suitable for Larger Ore-bodies
Block Caving Suitable for Larger Ore-bodies For personal use only
Slide 30: Rock Strength a Factor
Rock Strength a Factor For personal use only Block caving relies on the regional and local stresses imparted on the ore body exceeding the strength of the rock … which ultimately results in the fragmentation of the ore. Much larger voids are required to cave stronger rocks Caving occurs at small HRs
Slide 31: What is Block Cave Mining?
What is Block Cave Mining? For personal use only Caving is initiated by development of a mining level at the bottom of the ore body. An initial void is constructed in the ore body inducing the stress, breaking the rock and allowing the ore to be extracted. Undercut Level Drawbell Drawpoint Extractio
Slide 32: What is Block Cave Mining?
What is Block Cave Mining? For personal use only Ore is drawn through a network of draw bells (funnels) above the extraction level. Continual removal of the ore propagates fragmentation, allowing the removal of the ore body for minimal drill and blast activity.
Slide 33: Major block and panel cave mines
Major block and panel cave mines For personal use only Oyu Tolgoi (Cu-Au-Mo) Resolution (Cu-Mo) Miami Grasberg (Cu) (Cu-Au) Argyle Codelco (Diam.) (Cu) Northparkes (Cu-Au) Palabora (Cu) Rio Tinto De Beers Planned (Diamonds) Currently operating Closed mines 8
Slide 34: Context - what is block caving?
For personal use only Context – what is block caving? The Value Proposition Risks Towards Block Cave Excellence
Slide 35: What is the Value Proposition?
What is the Value Proposition? For personal use only • Greater depth of ore bodies (exhaustion of near-surface ores) • Declining ore grades • Improving mining technology Block Caving is: • Lowest cost underground mining method • A mass-mining method – matching the scale of the largest opencut mines
Slide 36: Greater Depths of Mining
Greater Depths of Mining For personal use only New Discoveries are Deeper Near-Surface Ore is Depleted Palabora Argyle Examples: Northparkes Examples: Palabora Resolution Argyle Oyu Tolgoi Kennecott Grasberg Grasberg
Slide 37: Grasberg (40% Rio Tinto) - One of the Great Copper Mines
Grasberg (40% Rio Tinto) – One of the Great Copper Mines of the World! For personal use only View of the Grasberg Mine, West Papua, Indonesia
Slide 38: Grasberg Block Caves - Depth Extensions & Buried Ore Bodies
Grasberg Block Caves – Depth Extensions & Buried Ore Bodies For personal use only Plan View Grasberg & Kucing Liar Final Pit N Ertsberg East Skarn System Grasberg Pit Big Gossan Dom Common Infrastructure Grasberg Underground Ertsberg East Dom Skarn System Kucing Liar ESZ DOZ Big Gossan MLZ Deep MLZ
Slide 39: Declining Ore Grades
Declining Ore Grades For personal use only Head Grades of both Opencut and Underground Mines are declining
Slide 40: Block Caving is the Lowest-Cost Underground Mining Method
Block Caving is the Lowest-Cost Underground Mining Method … For personal use only Stoping Methods Sub-Level Caving Block Cave Mining Orebody Lenticular Orebody Tabular Orebody Massive Type: Type: Type: OPEX: $30-60/t OPEX: $12-20/t OPEX: $5-10/t Production 5-30ktpd Production 15-50ktpd Production 10
Slide 41: Block Cave Mining able to match the scale of the largest Opencut Mines
Block Cave Mining able to match the scale of the largest Opencut Mines … For personal use only New generation Caves; under construction Andina Current Operations Grasberg 160000 Step Change in Scale Resolution 140000 El Teniente Being constructed/ advance planning Open pits Super 120000 Chuq TONNES
Slide 42: Why Can Block Cave Mines Match the Scale of Opencut Mines?
Why Can Block Cave Mines Match the Scale of Opencut Mines? For personal use only Plan View Grasberg & Kucing Liar Final Pit N Ertsberg East Skarn System Grasberg Pit Big Gossan Dom Common Infrastructure Grasberg Underground Ertsberg East Dom Skarn System 250-300t payload Kucing Liar ESZ DOZ Big Goss
Slide 43: Extraction level can be readily expanded and modularised
Because the size of the Mine Extraction Level can be readily expanded (& modularised) … For personal use only Active development and mining can occur in multiple areas of the mine footprint. The Grasberg mine will be a Panel Cave (a variant of block caving where the active mining area progressively
Slide 44: Technology driving a step change in mining productivity
Technology (including Automation) driving a step change in mining productivity For personal use only Mechanisation Automation
Slide 45: Copper from Underground Mining will overtake Surface Mining
Copper Sourced from Underground Mining will overtake Surface Mining For personal use only Copper production from UG Mines to exceed production from Opencut Mines by 2020 … driven by a switch to Block Cave mining!
Slide 46: Fundamental Differences between Opencut & Underground Mining
Some Fundamental Differences between Opencut & Underground Mining … For personal use only OPEN PIT MINING CAVE MINING well established method uncertainty good control reduced knowledge more certainty Escondida, Chile limited control • Lower capital • High Capex
Slide 47: But also clear advantages
But also clear advantages For personal use only OPEN PIT MINING CAVE MINING Kennecott , USA Northparkes, Australia • Significant waste movements • Minimal waste movements • Larger carbon footprints • Low carbon footprints (diesel + explosives) (electricity) • Large surface footprints • Large surface
Slide 48: Significant Comminution Within the Cave
Significant Comminution Within the Cave For personal use only Primary Fragmentation Index of Interruptions Frequency (Salvador mine, draw point 04W20 ) Secondary fragmentation HoD Initial secondary fragmentation Blasting effect Blasted undercut material Flow Interruption Index (events/tons x 1000) S
Slide 49: But also clear advantages
But also clear advantages For personal use only OPEN PIT MINING CAVE MINING Grasberg, Indonesia • Large surface footprints • Large surface footprints
Slide 50: Context - what is block caving?
For personal use only Context – what is block caving? The Value Proposition Risks Towards Block Cave Excellence
Slide 51: We know there are risks
We know there are risks … For personal use only UG Safety Collapse/ Incomplete or Excessive Catastrophe instability of partial caving dilution or • Fall of ground underground • Geological contamination • Fire workings: heterogeneity of ore stream • Shafts/hoisting • Inadequate • Insufficient span •
Slide 52: We are Continually Learning
We are Continually Learning For personal use only North South E22 E48 E26 Mining Operations Concentrator Centre Shaft & Loading Station Extraction Level Crusher Station Lessons Lessons Lessons E26 Lift 2 E26 Lift 1 E48 Lift 1 • Managing critical • Control of geology • Impact of rapid risks (air-blas
Slide 53: Key Technical Issues
Key Technical Issues For personal use only cave propagation cave flow cave fragmentation
Slide 54: Reserve Recovery a Key Parameter
Reserve Recovery a Key Parameter For personal use only High grade Dilution ore entry ORE BODY $ WASTE ROCK WASTE ROCK REPEAT Vyazmensky © 2008 TIME
Slide 55: How Soon Can We Get Our Money Back?
How Soon Can We Get Our Money Back? For personal use only
Slide 56: Underground Mining Strategy - a holistic approach to risk reduction
Underground Mining Strategy – a holistic approach to risk reduction & improvement For personal use only Function Process Safety Design People Underground Mining Construct Strategy Technical Operate Technology
Slide 57: The Major UG Safety Hazards
The Major UG Safety Hazards For personal use only Taxonomy Revised UG Safety Standards D1.1 Ground control (existing standard) Fall of Ground D1.2 Emergency procedures (existing standard) Fire D1.3 Fire precaution (revised standard) Hoisting/Shaft Incident D1.4 Hoisting and shafting sinking (revised
Slide 58: Context - what is block caving?
For personal use only Context – what is block caving? The Value Proposition Risks Towards Block Cave Excellence
Slide 59: Rio Tinto - A Leader in Block Cave Mining
Rio Tinto – A Leader in Block Cave Mining For personal use only • Involved in 5 block caves in operation or development • Applying experience from operating mines to developing next generation block cave mines • Advancing technology and innovation in block cave mining • Block Cave Knowledge Centre t
Slide 60: Oyu Tolgoi - Phased Development of a World Class Asset
Oyu Tolgoi – Phased Development of a World Class Asset For personal use only Phase 1 • Open pit development • 100,000 tonne per day concentrator • Preliminary development of UG mine Phase 2 • Complete underground development • Mill expansion • Power station
Slide 61: Kennecott Utah Copper - Pathway to Underground
Kennecott Utah Copper – Pathway to Underground For personal use only First step is near term development North Rim Skarn of North Rim Skarn* − 20 million tonnes mineral resource at 3.6% Cu − 1.0 million ounces of contained gold − $165 million approved for pre-feasibility studies to 2014 − Production
Slide 62: Resolution - A Major Shaft
Resolution – A Major Shaft 10 Shaft 9 Underground Mine of the Future For personal use only – High quality resource – 1.47% copper with significant molybdenum – Top of resource about 1.5km deep, with production level 2km deep – Land exchange bill approved in US House of Representatives – Sinking shaf
Slide 63: Northparkes Step-Change Project - Expansions
Northparkes Step-Change Project - Expansions For personal use only North South Administration Centre Concentrator E48 Subsidence Zone Mining Operations Centre E26 Subsidence Zone E22 Pit E26 E48 Lift 1 E22 E26 Lift 2 GRP314 E48 E26 Lift 2 Lift 3 Existing block cave Proposed block cave
Slide 64: La Granja - Block Cave Potential below the proposed Opencut
La Granja – Block Cave Potential below the proposed Opencut For personal use only Paja Blanca Mirador Starter Case Pit 5F 2000m Mirador Deep High 0.5 Km Grade 1500m 0m 200m 400m 1000m Paja Blanca Deep 0.3% Cu CoG, (0.51%) High Grade 0.6% Cu CoG (0.77%)
Slide 65: The Vision - an Ore Factory
The Vision – an Ore Factory For personal use only The Ore Factory Required Fragmentator In Situ Fragment Crushing Size and Grinding Energy (Distance Traveled) Reliable Ore Flow Predictable Ore Transport Fragmentation and Sizing (+ grade) TheRockFactory
Slide 66: Mine design is our most important value creation lever
Mine design is our most important value creation (and protection) lever For personal use only First Consideration … Productivity = f (Footprint size, Caving rate) Getting the basics like caveability and extraction level stability right are absolutely crucial for safe recovery of reserves … After tha
Slide 67: Conventional Block/Panel Caves Rely on Ore Rehandle
Conventional Block/Panel Caves Rely on Ore Rehandle For personal use only LHDs feeding ore pass to trucks hauling ore to central crusher station Grizzly Ore Pass Henderson Ore Pass Gyratory crusher Rail/truck level at Grasberg Panel Cave Conveyor/hoist/train
Slide 68: Northparkes Layout Eliminates Rehandle - Reducing Capex and Opex
Northparkes Layout Eliminates Rehandle – Reducing Capex and Opex For personal use only LHDs feeding primary ore bin to jaw-gyratory crusher with direct feed to conveyor Primary feed bin 4-Way Tipple Crusher Northparkes’ 4-Way Tipple Ore bin Conveyor
Slide 69: Significant Opportunity for Rapid Tunneling Technology
Significant Opportunity for Rapid Tunneling Technology For personal use only Versus Drill & Blast: • 4-6m/day Tunnel Boring Systems: • Significant rock mass damage • 10-14m/day from blasting • Reduced rock mass damage • Very flexible (multiple headings • Minimum turning radius of can be worked) 20-3
Slide 70: Summary
Summary For personal use only • Block Cave Mining Method offers Rio Tinto a clear opportunity to add significant value to lower grade and/or deeper ore bodies • Safer (more automated) • Lower cost • Higher productivity • Smaller footprint • Block Cave Mining is technically challenging with many new