Bhp Group Ltd · ASX:BHP
Bhp — BHP Billiton — Corporate Update (June 2005)
58 slides from Bhp's corporate update, Jun 4, 2005
Slide 1: Analyst Visit 4 June 2005 – QNI Pty Ltd
Analyst Visit 4 June 2005 QNI Pty Ltd
Slide 2: Disclaimer
Disclaimer The views expressed herein contain information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. Any forward-looking information in this presentation
Slide 3: QNI has most requisite factors for world competitive nickel and cobalt processing
QNI has most of requisite factors for world competitive sustainable nickel and cobalt processing • Abundant water – WRF • Power largely self-generated by co-generation • Reasonably priced gas and coal • Skilled workforce • Well established safety and production systems • Well established sophisticat
Slide 4: The QNI strategy
The QNI strategy Central Refinery Strategy Optimise Yabulu margins • Phase I: Stabilise Yabulu operation • Incremental value-added product Develop Ravensthorpe as development. “front end” and expand • Zero harm • Plant efficiency projects Yabulu. • Business re-engineering • Gas conversion • Phase II
Slide 5: Sources of ore supply to Yabulu Refinery
Sources of ore supply to Yabulu Refinery PHILIPPINES Manila Cagdianao Hinatuan Taganito Rio Tuba ACT Project Tanj ung Buli Gebe Pomalaa INDONESIA NEW CALEDONIA Baie Ugue Poro Poum Kouaoua Karembe Boakaine Nakety Yabulu Teoudie Thio Vulcain AU S TR ALI A Noumea Brisbane Ravensthorpe Page 5
Slide 6: Mine site location and rainfall patterns
Mine site location and rainfall patterns Isabela Rainfall (Ca sigura n Station) 600.0 400.0 200.0 PGMC South Isabela - J F M A M J J A S O N D China Sea Zambales 15 Manila Bicol Pacific Ocean 450.0 M anican i Rain fall 400.0 350.0 300.0 Samar 250.0 200.0 150.0 100.0 Manicani 50.0 Palawan Cebu CM C -
Slide 7: Identified ore sources vs actual offtake
Identified ore sources vs actual offtake 4750 4500 Wet Tonnes '000 4250 4000 3750 3500 3250 3000 FY01 FY02 FY03 FY04 FY05 Actual Possible Source: BHP Billiton Page 7
Slide 8: Ship loading by barge
Ship loading by barge oe! ef Page 8 bhptbilliton
Slide 9: Ore discharge at Materials Handling Facility
Ore discharge at Materials Handling Facility Approximately 3.7 million tonnes of Nickel Ore is unloaded and transported to Yabulu Refinery every calendar year. Page 9
Slide 10: The QNI strategy
The QNI strategy Central Refinery Strategy Optimise Yabulu margins • Phase I: Stabilise Yabulu operation Develop Ravensthorpe as • Incremental value-added product “front end” and expand development. Yabulu. • Zero harm • Plant efficiency projects • Phase II: • Business re-engineering • Gas conversio
Slide 11: ACT Project Location
ACT Project Location 100kms Manila Cebu Surigao City ACT Project Caraga Region Zamboanga City Davao City Page 11
Slide 12: ACT Project: significant parameters
ACT Project: significant parameters • Mineable reserves: min 12MWt • Minelife: 12 years, minimum • Production: 1MWt/y • Method: Surface mining w/ progressive rehab • Sustainability: Programme & policy framework in plan • Direct capitalisation: US$19.2M Page 12
Slide 13: ACT Project: Location of Ore Reserves
ACT Project: Location of Ore Reserves 0 1 3kms TMC Caga4 ACT Adlay Page 13
Slide 14: Brief market and sales overview
Analyst visit 4 June 2005 Brief market and sales overview
Slide 15: Nickel supply and demand balance, price and stock development
Nickel supply and demand balance, price and stock development CY 2003 2004 2005 Global Supply (kt) 1,284 1,272 1,305 %change -0.9% 2.6% Global Consumption (kt) 1,240 1,263 1,317 %change 1.9% 4.3% Surplus/Deficit 43 9 -12 Source: CRU 40,000 18,000 LME Nickel Stocks LME Cash Price 17,000 35,000 LME Ca
Slide 16: Nickel market is in structural tightness
Nickel market is in structural tightness ¾Nickel demand remains robust – 300 series remains the workhorse of the stainless industry because of “core” applications – Strong growth in the aerospace industry and land-based turbines – Hybrid electric vehicles provide a positive development for long-term
Slide 17: Yabulu Ni production and sales
Yabulu Ni production and sales Yabulu nickel sales 36 32 (kt) (kt) 28 24 20 FY00 FY01 FY02 FY03 FY04 FY 04 Geographical Sales split – Poised for YEP Output Other 6% Europe Asia 19% 75% Source: BHP Billiton Page 17
Slide 18: Cobalt supply and demand balance, price development
Cobalt supply and demand balance, price development CY 2001 2002 2003 2004* Global Supply (kt) 41.5 42.4 46.7 49.5 %change 2.2% 10.1% 6.1% Global Consumption (kt) 39.4 41.0 45.9 49.4 %change 4.1% 12.0% 7.6% Surplus/Deficit 2.1 1.4 0.8 0.1 Source: CRU * Provisional figures Metal Bulletin Cobalt 99.8%
Slide 19: Yabulu Cobalt production and sales
Yabulu Cobalt production and sales Yabulu cobalt sales 2.5 2 1.5 (kt) 1 0.5 0 FY00 FY01 FY02 FY03 FY04 Geographical Sales split – FY04 Other 20% Asia 80% Source: BHP Billiton Page 19
Slide 20: The QNI Horizon Strategy – creating a robust platform for capital efficient growth
The QNI 3 Horizon Strategy – creating a robust platform for capital efficient growth Central Refinery Strategy Optimise Yabulu margins • Phase I: Develop Ravensthorpe as • Incremental value-added product “front end” and expand development. Yabulu. Stabilise Yabulu operation • Phase II: • De-bottlene
Slide 21: Incremental value-added product development for cobalt
Incremental value-added product development for cobalt Aim: Incremental value-added product development based on modification of existing products Target: Li-Ion battery for portable applications Results:Last year 70% of cobalt was sold as a premium chemical product to the Li-Ion battery industry Fu
Slide 22: Yabulu Refinery
Analyst visit 4 June 2005’ Yabulu Refinery Alan Cuddon
Slide 23: Outline of presentation
Outline of presentation • Our vision • Yabulu strategy • Yabulu Refinery overview • Yabulu Performance • Our Environment • Our Community Page 23
Slide 24: Our Vision
Our Vision We are here for the long term to grow a responsible, robust, world class nickel and cobalt business. Page 24
Slide 25: Overview - Yabulu Refinery
Overview - Yabulu Refinery • Commenced operations in 1974, ore from Greenvale nickel deposit. • Mine exhausted in 1992; other domestic supplies in 1995. Imported ore since 1986 • Located on the east coast of Australia • 3.5 M tpa of im ported ore produces 32 000T Ni and 2000T Co • Efficient refining
Slide 26: Production, process & people
Production, process & people • Four main processing areas • Continuous process – Caron • Ore Roast, Extract & Refine • 24 hour production utilising 4 shift crews on 12hr rotating roster • Day-work support crews • People – 700 compliment + 200 projects Page 26
Slide 27: Product Range – Nickel/Cobalt Products
Product Range – Nickel/Cobalt Products Nickel Cobalt • QN Nickel compacts • QN ChemGrade (>99% Ni) Cobalt • QN Nickel Carbonate • QN Nickel Oxide (78%Ni) Page 27
Slide 28: The QNI strategy
The QNI strategy Central Refinery Strategy Optimise Yabulu margins • Phase I: Stabilise Yabulu operation • Incremental value-added product Develop Ravensthorpe as development. “front end” and expand • Zero harm • Plant efficiency projects Yabulu. • Business re-engineering • Gas conversion • Phase II
Slide 29: Utilities
Utilities Power Generation • Coal-fired boiler produces process steam & power Gas Production • Syngas, aqua ammonia & H2S from naptha Conversion to Coal Seam Methane • Tie in’s completed, key equipment being procurred • Taking gas at Yabulu from early 2006 • Reduce unit costs, US$0.14/lb nickel Page
Slide 30: Improving safety
CIFR rolling 12 month 0 2 4 6 8 10 12 14 16 Page 30 Jan-01 May-01 Sep-01 Jan-02 Improving safety May-02 Sep-02 Jan-03 May-03 Sep-03 Jan-04 May-04 Classified Injury Frequency Rate Performance Sep-04 Jan-05
Slide 31: Improving Production - Ni
Improving Production - Ni YTD Apr 05 Nickel Production (tonnes) (financial year) 30,000 33,000 32,000 27,500 31,000 25,000 30,000 32,590 25,655 31,166 29,000 22,500 28,000 28,455 20,000 27,000 FY05 YTD 26,000 Act FY02 Act FY03 Act FY04 Act Page 31
Slide 32: Production - Co
Production - Co Cobalt Production (tonnes) YTD Apr 05 (financial year) 2,000 2,000 1,900 1,500 1,800 1,000 1,894 1,522 1,877 1,700 1,696 500 1,600 - 1,500 FY05 FY02 Act FY03 Act FY04 Act YTD Act Page 32
Slide 33: Post Investment Review – Yabulu Optimisation Initiatives
Post Investment Review – Yabulu Optimisation Initiatives • HSEC • Benefits – 0 CI, 0 MTC – NPV US$69.8m @ 7.0% discount – Payback 2.2yrs • Budget – ROR 77.3% – Safer plant operation – Budget US$15.4m – Ni +2.2% – Actual US$15.4m – Co +8% – Steam Savings 24tph – Reduced Energy 512,000 GJ/yr – Reduced
Slide 34: QNI Financial Performance
QNI Financial Performance US$M FY05 H1 FY04 FY03 Ni Production Tonnes 15,027 32,590 31,166 M lb Ni 33 72 69 Ni Sales Tonnes 15,556 32,097 33,008 M lb Ni 34 71 73 Ni Turnover $M 207 375 234 EBITDA $M 96 163 48 Depreciation $M 18 28 24 EBIT $M 78 135 24 Turnover - EBITDA $M 111 212 186 $/lb Production
Slide 35: Operating Unit Cost (after Cobalt Credit)
Operating Unit Cost (after Cobalt Credit) Unit Operating Cost (US$/lb after Co credits) Q1-Q3 2005 3.50 (financial year) 4.00 3.50 3.00 3.00 2.50 2.50 2.00 2.00 1.50 1.50 2.27 1.00 1.00 2.41 2.32 2.29 0.50 0.50 - FY05 YTD - Act FY02 Act FY03 Act FY04 Act * Normalised to FY01 protocols Page 35
Slide 36: QNI Cost Structure
QNI Cost Structure Other (10%) Chemicals/Additives (4%) Wages/Salaries (8%) Ore (42%) Maintenance (12%) Fuels/Energy (24%) Page 36
Slide 37: Environment Management programs
Environment Management programs • Environment Assessment and Management (EA&M) Program – carried out by CQU, Uni of Qld and JCU. – monitors and investigates marine, estuarine, terrestrial and freshwater systems, in place for 5 years ~ clean bill of health. • Water Recycling Facility – $25million WRF
Slide 38: Community Relations
Community Relations • Matched Community Safety Grants when recognising 1,000,000 LTI free hours (twice in FY05!) • Community spend – Sustainable Energy Precinct – Thuringowa Riverway Project: $750,000 – Adopt A School program with NQ Cowboys – Cowboys foremost community program ~ & a league benchmar
Slide 39: QNI Yabulu Refinery - The Triple Bottom Line
QNI Yabulu Refinery - The Triple Bottom Line Environment Community Business Our License to Operate Page 39
Slide 40: Ravensthorpe Nickel Project
Analyst visit 4 June 2005 Ravensthorpe Nickel Project
Slide 41: Ravensthorpe Nickel Project
Ravensthorpe Nickel Project Central Refinery Strategy Optimise Yabulu margins • Phase I: Stabilise Yabulu operation • Incremental value-added product Develop Ravensthorpe as development. “front end” and expand Yabulu. • Zero harm • Plant efficiency projects • Phase II: • Business re-engineering • Ga
Slide 42: Ravensthorpe Nickel Project Site Layout
Ravensthorpe Nickel Project Site Layout Shoemaker-Levy LEGEND Co nve yor Pit Outline h Sou t Co ast Priority Flora Re-vegetated Area Hig hw Conservation Offset ay Plant Village Halleys Access Road Hale Bopp 0 5 kilometres TSF Evaporation Ponds Page 42
Slide 43: HSEC Performance and Issues
HSEC Performance and Issues • Leading indicators on target or better • CIFR (end – May and 1,025,000 hrs) at RNP of 4.7 • ICAM training completed and FRCPs implemented • DuPont appointed to assist in the Road to Zero Harm • Contractor management remains the key focus • Tender evaluations • Pre-mobil
Slide 44: Trial Pit Geology - Visually Distinct Ores
Trial Pit Geology - Visually Distinct Ores Shear Shearwith with qtz qtzveining veining Caprock-waste Caprock-waste Silicified Silicifiedcore corestone stone Kaolin Kaolinrich richzone zone (L2 ore type) (L2 ore type) L2 L1 S1 Page 44
Slide 45: Ravensthorpe Nickel Project - Virtual Tour
Ravensthorpe Nickel Project - Virtual Tour Page 45
Slide 46: Cawse Ramp-up Rate
Ravensthorpe Nickel Project Cawse Ramp-up Rate Cawse Autoclave Fe ed Rate Cawse Autoclave Feed Tonnage 80 Tonnes per Quarter 120000 Ore tonnes/hour 60 80000 40 20 40000 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 99 99 99 99 00 00 00 00 01 01 01 99 99 99 99 00 00 00 00 01 0
Slide 47: Ravensthorpe Nickel Project Overall Progress April 2005
Ravensthorpe Nickel Project Overall Progress April 2005 100% Planned Progress 90% Earned Progress 80% RNO Planned Progress 70% 60% RNO Earned Progress RJV 50% Planned Progress : 40% 20.5% Earned Progress : 21.6% 30% 20% 10% RNO 0% 4 4 4 4 5 5 5 5 6 6 6 6 7 7 r -0 n -0 p -0 c-0 r -0 n -0 p -0 c-0 r -
Slide 48: Proposed Upgrade at Esperance Port
Ravensthorpe Nickel Project Proposed Upgrade at Esperance Port Location of Sulphur Storage Shed Proposed unloading of sulphur and loading of containers at Berth 2 Proposed Sulphur Storage Shed Page 48
Slide 49: Titanium Prices 2002-05
Ravensthorpe Nickel Project Titanium Prices 2002 - 05 DFS Estimate DFS Estimate Page 49
Slide 50: Key Issues and Forward Plan
Key Issues and Forward Plan • HSEC • DuPont assistance • Cost Pressures • Extensive off-shore procurement (>US$200M) • Early procurement of Titanium raw materials • Minimise changes through scope and design control • Sole source where expertise and leverage • Schedule • On track for early 2007 start
Slide 51: Yabulu Extension Project
Analyst Visit 4 June 2005 Yabulu Extension Project
Slide 52: What is YEP?
What is YEP? • Yabulu flowsheet consists of ore treatment and metal refining. • YEP extends the high-value add metal refining plant. • Why at Yabulu? – Known flowsheet – more of the same with only one new flowsheet step – Skilled workforce – Maintains existing product suite (Ni & Co) and branding •
Slide 53: HSEC Performance
HSEC Performance 9 241 000 hours CI free during implementation [508 000 hours CI free project to date including all study phases] 9 Yabulu’s licence conditions change as required to cater for the construction, commissioning and subsequent operation of YEP plant 9 Construction EMP & ambient particula
Slide 54: Progress
Progress ¾ Project remains on schedule ¾ Long lead equipment ordered ahead of schedule ¾ Supply Enquiries issued 80 of 85 ¾ Construction Contracts let 4 of 11 ¾ Commitments to date AUD 123M –v- AUD 142 plan Page 54
Slide 55: Site Activities
Site Activities ¾ Site labour agreement ratified ¾ Early site infrastructure works underway ¾ Progressive handover of areas from Operations ¾ BNC tanks foundations completed, tank erection started ¾ Horizontal concrete & piling package started Page 55
Slide 56: Site Photographs
Site Photographs MHP Receival & Leach Preboil Stills ASX Plant Page 56
Slide 57: Site Photographs
Site Photographs Nickel Plant Cobalt Plant Page 57
Slide 58: Ohpodilliton
dl Ohpodilliton