Orica Limited · ASX:ORI
Orica — Investor Presentation (June 2009)
66 slides from Orica's investor presentation, Jun 4, 2009
Slide 1: Blast Based Services
For personal use only Blast Based Services An Overview by Angelo Labriola Presented by Nigel Pereira 3 June 2009
Slide 2: Background
Background For personal use only • Across Orica’s four key growth strategy platforms, Blast Based Services represents the development of new services into existing markets New Markets • These services are knowledge-based and combine our specific technology Existing capabilities with operational exce
Slide 3: Background: Delivering Value
Background use only • Delivering Value Products Operational Blast Quality Services Where to from here? Services (Technical Services) personal Value – Risk Assessment – Design ForIncreasing Knowledge Blasting – Training – U/G Bulk – Auditing delivery – Modelling – Flexible & high – Measurement Excell
Slide 4: Examples: Stemming zone fragmentation improvement – Latin America
Examples For personal use only • Stemming zone fragmentation improvement in large diameter open pit metal mining – Latin America
Slide 5: Examples: Minimisation of ore dilution – United States
Examples For personal use only • Minimisation of ore dilution through blasting – United States
Slide 6: Examples: Fragmentation improvement with electronic detonators – Indonesia
Examples For personal use only • Fragmentation improvement trials using Electronic detonators and tailored timing - Indonesia 150L pyro 135L Pyro 135L ikon1 135L ikon2 Pyrotechnic - Nonel Base Case 0.38 0.26 i-kon™ - electronic - Shot 01 0.14 0.15
Slide 7: Examples: Vibration and wall control – Australia
Examples For personal use only • Vibration and wall control – Australia
Slide 8: Sustained benefits
Sustained benefits For personal use only • Why were these examples not sustained or enhanced? – A desire to keep technical knowledge in-house – core competence – Concerns around input costs of change – Issues surrounding operational and quality control standards – Aversion to change – No understandi
Slide 9: Blast Based Services: A definition
Blast Based Services For personal use only A definition Blasted Based Services (BBS) are a suite of services that offer our customers, the opportunity to purchase blast outcomes. Blast Based Services meet specific customer needs and incorporate our technology and technical support capability to crea
Slide 10: The Blast Based Services Model
The Blast Based Services Model For personal use only Organisational Alignment Commercial Advanced models and Blast Based products and value modelling Services technologies tools Operational Excellence
Slide 11: The BBS Process
The BBS Process For personal use only Customer High level BBS Commercial Consultation and Technical Mine Scoping Study Proposal Needs Identification Investigation • We engage with the customer and understand the real needs and financial / performance drivers • We send our senior engineers to assess
Slide 12: A Summary
A Summary • The Service is proposed if Orica identifies technological and For personal use only process solutions that deliver value Develop BBS Determine Technical Solution & Customer Value Mine Scoping Study Establish Baseline Deployment using Value Programme Calculator Total Delivered Value Opera
Slide 13: Value Quantification
Value Quantification • The Value Calculator For personal use only – A tool for analysing a base case and alternative scenarios, in a clear, transparent way CY08 D&B savings of Load & Haul improvements $ 1,520,300 of $1.4M and Secondary breakage savings of $286K
Slide 14: Example 1: Rock to Specification
Example 1: Rock to Specification For personal use only
Slide 15: Background
Background For personal use only • Rapid expansion from 26 M BCM p.a to 41 M BCM p.a • Capital investment made for additional load and haul fleet • Massive oversize issues seen as a limiting factor • Considering major investment in new drills • The Goal – Reliable supply of Ore to the mill
Slide 16: The BBS Process
The BBS Process For personal use only Customer Analysis – BBS Commercial Consultation and Mine Scoping Study Solution Identified Proposal Needs Identification Develop BBS Determine Technical Solution & Customer Value Establish Baseline Deployment using Value Programme Calculator
Slide 17: The BBS Process
The BBS Process For personal use only Customer Analysis – BBS Commercial Consultation and Mine Scoping Study Solution Identified Proposal Needs Identification • Establishment of a joint steering committee to define clear technical and commercial alignment for both companies • High level meetings to
Slide 18: The BBS Process
The BBS Process For personal use only Customer Analysis – BBS Commercial Consultation and Mine Scoping Study Solution Identified Proposal Needs Identification • Technical assessment & awareness of needs • Both companies sponsored an in-depth technical study of the mine
Slide 19: The BBS Process
The BBS Process For personal use only Customer Analysis – BBS Commercial Consultation and Mine Scoping Study Solution Identified Proposal Needs Identification Develop BBS Determine Technical Solution & Customer Value Establish Baseline Deployment using Value Programme Calculator • Bottom up and top
Slide 20: Global Experience
Global Experience For personal use only Cap Rock Reduction 150L pyro 135L Pyro 135L ikon1 135L ikon2 Fragmentation 0.38 Improvement 0.26 0.15 0.14 Shovel 15 Indexed Instantaneous Dig Rate Bench: 8 - North Vibration Modelling Grasberg 1.5 S15 Daily i-kon S15 Daily Pyrotechnic S15 i-kon Average S15 Py
Slide 21: Advanced Modelling
For personal use only Advanced Modelling
Slide 22: The BBS Process
The BBS Process For personal use only Develop BBS Determine Mine Scoping Study Technical Solution & Customer Value Establish Baseline Deployment using Value Programme Calculator Develop BBS Deployment Technical Solution Programme • Implementation plan • Full time onsite R2STM team required • Fully i
Slide 23: The BBS Process
The BBS Process For personal use only Develop BBS Determine Technical Solution & Customer Value Mine Scoping Study Establish Baseline Deployment using Value Programme Calculator Total Delivered Value Operational Cost $/bcm Value Calculator Baseline BBS Operational Enabled Costs Operational Cost
Slide 24: The BBS Process: Commercial model example
The BBS Process For personal use only Customer Analysis – BBS Commercial Consultation and Mine Scoping Study Solution Identified Proposal Needs Identification Commercial model example Existing Orica Total Loading Service (TLS) Plus Rock to SpecificationTM Blast Based Service Commercial Basis - TLS a
Slide 25: Implementation
Implementation For personal use only QA – Drilling Location QA – Drilling Depth
Slide 26: Implementation
Implementation For personal use only SHOTPlus-i Pro
Slide 27: Results
Results For personal use only • A 78% decrease in secondary blasting requirements
Slide 28: Results
Results For personal use only • A 25.6% increase in instantaneous shovel productivity from 1900 bcm/hr to 2386 bcm/hr
Slide 29: Results
Results For personal use only • Significantly improved wall control with combined production/limits shots
Slide 30: Results – Phase
Results – Phase 1 For personal use only Customer Benefit Nett Fragmentation improvement (P80 reduction of 35%) - 77% reduction for oversize / secondary blasting $1.1M Load & Haul productivity improvement of 7.2% $6.9M Reduction in drilling requirements by 15% Reduction in explosive consumption by 7%
Slide 31: Example 2: Qld coal mine
Example 2: Qld coal mine For personal use only • Dipping coal seams • Multiple seams • Hard dig areas • Opportunities for greater efficiencies
Slide 32: Example 2: Qld coal mine
Example 2: Qld coal mine For personal use only • Previous practice Shovel Prestrip Broken Drilled
Slide 33: Example 2: Qld coal mine
Example 2: Qld coal mine For personal use only • Previous practice Precondition
Slide 34: Example 2: Qld coal mine
Example 2: Qld coal mine For personal use only • Previous practice
Slide 35: Example 2: Qld coal mine
Example 2: Qld coal mine For personal use only • Previous practice
Slide 36: Example 2: Qld coal mine
Example 2: Qld coal mine For personal use only • Previous practice Hard Toe Digging another shot (Dragline Has to walk approx. 3.3km@100mts/hour)
Slide 37: Example 2: Qld coal mine
Example 2: Qld coal mine For personal use only • Previous practice
Slide 38: Example 2: Qld coal mine
Example 2: Qld coal mine For personal use only • The site scoping study revealed the possibility to blast differently, and change the way mining is scheduled – blasting through seams
Slide 39: Example 2: Qld coal mine
Example 2: Qld coal mine For personal use only • Proposed practice Altered Pattern
Slide 40: Example 2: Qld coal mine
Example 2: Qld coal mine For personal use only • With Blast Based Services
Slide 41: Example 2: Qld coal mine
Example 2: Qld coal mine For personal use only • With Blast Based Services
Slide 42: Example 2: Qld coal mine
Example 2: Qld coal mine For personal use only • With Blast Based Services
Slide 43: Example 2: Qld coal mine
Example 2: Qld coal mine For personal use only Site Scoping Actual since Dec Study model 2008 c/w Budget Change in drilling, blasting -$0.12 / bcm -$0.16 / bcm & excavating BBS fee +$0.05 / bcm +$0.05 / bcm -$0.07 / bcm -$0.11 / bcm Total: ($4.2m p.a.) ($6.6m p.a.) Notes: 1.) Mine was operating belo
Slide 44: Example 3: Asian coal mine
Example 3: Asian coal mine For personal use only • Extremely challenging environment • Objective: To provide a continuous supply of raw material for the most important equipment on site – the production machines • Dipping coal seams • Multiple seams • Demonstration phase complete
Slide 45: Example 3: Asian coal mine
Example 3: Asian coal mine For personal use only • Opportunity to turn this, this, this, and this,
Slide 46: Example 3: Asian coal mine
Example 3: Asian coal mine For personal use only
Slide 47: Reduce energy and emission intensities with Orica's Blast Based Services
For personal use only Reduce energy and emission intensities with Orica’s Blast Based Services
Slide 48: Our Customers: Energy & Emissions #1 issue
For personal use only Our Customers Energy & Emissions #1 issue Energy & Water Rehab / closure Biodiversity Emissions
Slide 49: Our Customers: Energy & Emissions also most difficult
For personal use only Our Customers Energy & Emissions also most difficult Most Less difficult difficult
Slide 50: Our Customers: Energy & Emissions also most difficult
Our Customers Energy & Emissions also most difficult For personal use only vs Year upon year energy and Deliver economic value to emissions reduction targets shareholders through increased development
Slide 51: Open Pit Coal Mine Emissions Profile
Open Pit Coal Mine Emissions Profile An example open pit coal mining emissions profile per tonne of For personal use only coal mined * Seam gas 45 kg CO2-e • Seam gas is the #1 emissions source. Our Blast Based Services 13 kg CO2-e 16 kg CO2-e may impact this, depending on 0.4 kg CO2-e how seam gas
Slide 52: Specific BBS Capabilities: Increasing throw
For personal use only Specific BBS Capabilities Increasing throw (cast) for increased coal uncovery rates Old Spoil line New spoil line Pre-Blast volume Thrown Volume - does not have to Coal be excavated Coal Seam Seam Increasing cast volume allows the dragline to expose more coal
Slide 53: Stratablast: Maximising coal recovery & uncovery rates
For personal use only Specific BBS Capabilities StratablastTM: Maximising coal recovery & uncovery rates Layer 1: Throwblast Layer 2: Coal Protection Stand-up blast Specifically designed to protect the coal edge
Slide 54: Stratablast: Recovering Coal not previously mined
For personal use only Specific BBS Capabilities StratablastTM: Recovering Coal not previously mined Coal Seam previously lost with throwblast Coal seam recovered with Stratablast Seams as thin as 300mm have been preserved
Slide 55: A Case Study: Stratablast – Advanced modelling
For personal use only A Case Study StratablastTM – Advanced modelling
Slide 56: A Case Study: Ensham Mine
For personal use only A Case Study Ensham Mine, Qld, Australia StratablastTM identified as appropriate solution to improve coal recovery and maintain high dragline productivity Orica and Ensham team work jointly on site to maximise performance using our capability Excellent coal recovery
Slide 57: Specific BBS Capabilities: Value scenario modelling
Specific BBS Capabilities Value scenario modelling For personal use only
Slide 58: Financial and GHG Intensity Impact
For personal use only Financial and GHG Intensity Impact Our modelling suggests the following possible benefits: Reduction in Margin Notes: Site BBS GHG Improvement * Based on seam gas Condition Capability Intensity (%) per tonne of emissions reporting for in-situ Examples per tonne of coal † coal a
Slide 59: Orica Mining Services: Differentiation and Customer Value Add
For personal use only Orica Mining Services Differentiation and Customer Value Add Dr Kirsten Molloy Strategic Marketing Manager Australia Asia
Slide 60: Orica Mining Services - Vision
Orica Mining Services - Vision For personal use only To be the Global leader in commercial blasting systems by being the best at improving our Customers’ productivity through the application of superior know how. Key Imperatives Differentiation through Establishing low cost Continuing to grow invest
Slide 61: Initiatives
Initiatives For personal use only CULTURE & PEOPLE INNOVATIVE PRODUCTS Voice of the Customer R&D Pipeline • 3 Horizons Net Promoter Score Electronic Blasting Systems Global Customer Team Blast Based Services Customer Differentiation
Slide 62: R&D Statistics
R&D Statistics For personal use only • 6 Technology Areas – Products & Delivery Systems • Ammonium Nitrate • Explosives Products • Eng Design & Delivery Systems • Automation – Initiating Systems • Electronic Blasting Systems • Traditional Initiating Systems • High explosive compositions (boosters) –
Slide 63: Technology Centres
For personal use only 7 Technology Centres Kurri Kurri, Australia Brownsburg, Canada Denver, USA Troisdorf, Germany Gomia, India Gyttorp, Sweden Orica Mining Services Capetown, South Africa
Slide 64: Three Horizons of Growth
Three Horizons of Growth For personal use only %Spend on R&D to provide profitability and growth Horizon 3 Create viable options for the future Horizon 2 Build emerging Horizon 1 businesses 21% Emerging Extend core Technologies businesses 48% Product and market 31% extensions Incremental Product & P
Slide 65: R&D Partnering
Orica Mining Services R&D Partnering For personal use only • Universities and Research Institutes – University of South Australia – University of Newcastle – University of Melbourne – University of Queensland – ARC Grants – eg AMSRI with customer sponsorship – Cambridge University(UK) – CSIRO – Cana
Slide 66: Disclaimer
Disclaimer For personal use only 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 intended to be used as the