Bhp Group Ltd · ASX:BHP
Bhp — BHP Billiton — Technical Presentation (April 2004)
53 slides from Bhp's technical presentation, Apr 24, 2004
Slide 1: Minera Escondida Analysts Visit
MINERA ESCONDIDA ANALYSTS VISIT April 24th, 2004
Slide 2: Presentation Content
Presentation Content • Escondida Overview • Operations • Financial Overview • Business Strategy • Growth Opportunities • Marketing • Current Activities Slide 2
Slide 3: World's Premium Copper Region
World’s Premium Copper Region BOLIVIA TOCOPILLA CHUQUICAMATA Northern Chile’s Atacama Desert, CALAM A 160 km South East of Antofagasta CHILE MEJILLONES ANTOFAGASTA COLOSO ZALDIVAR Cerro Colorado MONTURAQUI Quebrada Blanca Collahuasi ESCONDIDA El Abra ARGENTINA Radomiro Tomic Chuquica mata Michilla L
Slide 4: Aerial View of MEL
Escondida Norte Zaldivar Aerial View Leach Padsof MEL Zaldivar Pit Concentrator Main Pit Oxide Hamburgo Leach Pads Tails N Phase IV 5 km Slide 4 Plant site
Slide 5: Facilities Layout
Facilities Layout CMZ Property Limit E. Norte Waste Dump Limit Northern Waste Dump Limit E. Norte Pit Ultimate Limit Main Pit Ultimate Limit Hamburgo Waste Dump Phase Limit IV Plant N site 5 km Slide 5
Slide 6: Coloso Filter & Port
Coloso Filter & Port Coloso Filter & Port Facilities Slide 6
Slide 7: Escondida's Strategy Builds on its Strengths to Maximize Long Term Value
Escondida’s Strategy Builds on its Strengths to Maximize Long Term Value World World’’s World’s Largest Largest Strong Strong Copper Copper Mine Mine Strong Strong Cash Cash Credit Credit Flow Flow Ratings Ratings Strong Low Low Cost Cost Strong Sponsors Producer Producer Sponsors Diversified Divers
Slide 8: World's Largest Copper Mine
World’s Largest Copper Mine L ead ing C op per M ine Sit es Lea ding Coppe r P ro ducers C ompa nies E sc on d id a L a gu n a S e ca C ode lc o P T Free p o rt E scond ida Lag un a S eca In d o n es ia BH P Billiton C hu q u ica m a t a KG HM P o lish Ph elps D od ge Cu R io Tint o E l T en ie n te
Slide 9: Sponsored By World's Premier Metals & Mining Houses
Sponsored By World’s Premier Metals & Mining Houses Mitsubishi Corporation 60% International Finance BHP Billiton Limited Rio Tinto Plc Mitsubishi Materials Corp 20% Corporation 100% 100% Nippon Mining & Metals Co Ltd 20% 2.5% Rio Tinto Japan Escon dida BHP Escondida Inc Escondida Limited Corporatio
Slide 10: Unequalled Copper Resource
Unequalled Copper Resource Ore Head Grade s Against Copper in Concentrate Production 2.100 E scon dida w ith Ca thod es 1.900 Copper in Concentrate ( Payable in Mlbs) PT Freep ort 1.700 E sco nd id a 1.500 1.300 1.100 900 Ba tu Hijau L os P elam b re s 700 Co lla hua si Bingh am Ca nyon Ca nde laria
Slide 11: Total Ore Reserves and Mineral Resources
Total Ore Reserves and Mineral Resources: Official declaration at June 30, 2003, JORC Competent Person: Dr J M Gilligan Ore Reserves Mineral Resources Ore Tonnes Grade Metal Tonnes Grade Metal Type (millions) (%Cu) (mlbs) (millions) (%Cu) (mlbs) Sulphide 1,514 1.21 34,293 2,121 1.12 52,550 LG Float
Slide 12: Copper Production & Head Grade
Copper Production & Head Grade Material Milled, Headgrade and Copper Production 1,200 3.50% Tonnes milled (00 000) Production (Cu Contained) (kt) Headgrade (%) 3.00% 1,000 2.50% 800 2.00% 600 1.50% 400 1.00% 200 0.50% 0 0.00% FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 YTD
Slide 13: Concentrate Grade Long Term
Concentrate Grade Long Term: Historic Annual Copper in Concentrate (All Production) 46% 44% 42% Concentrate Grade (%Tcu) 40% 38% 36% 34% 32% 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Fiscal Years Slide 13
Slide 14: Escondida Schematic Deposit Evolution Profile
Escondida Schematic Deposit Evolution Profile: Increasingly complex & variable geological conditions ⇐ ⇐ ⇐ ⇓ variability ⇓ ⇒ ⇒ ⇒ “1991-1997” “1998-2010” Cu - Fe Oxides cc cc+cv+cp+py cp + py “>2010” py >> cp Slide 14
Slide 15: Ore-Related Concentrate Grade & Quality Drivers
Ore-Related Concentrate Grade & Quality Drivers • Copper Mineralogy – Chalcocite to chalcopyrite ratios decrease with depth • Pyrite Content – Increasing pyrite content over last several years • Sulfide-Sulfide and Sulfide-Gangue Intergrowths – Dependent on alteration, lithology, and degree of enric
Slide 16: Phase IV Expansion Components
Phase IV Expansion Components • An additional mine fleet – (1) 65 yd 3 shovel, (6) 380 st haul trucks, (1) drill – Support equipment and maintenance shop expansion • In-pit ore crusher and conveyor to Phase IV concentrator – Relocation of existing crushers • 110,000 tpd Concentrator – 38-ft. SAG mil
Slide 17: Phase IV: Laguna Seca Concentrator
Phase IV: Laguna Seca Concentrator: Detailed Site Layout Slide 17
Slide 18: Presentation Content
Presentation Content • Escondida Overview • Operations • Financial Overview • Business Strategy • Growth Opportunities • Marketing • Current Activities Slide 18
Slide 19: Escondida Organisational Structure
Escondida Organisational Structure President (A) MEL Kevin O'Kane VP VP External & Corporate Affairs Human Resources Mauro Valdés Mark Stone VP VP Mine Finance Larry Hartley Alfredo Atucha VP (A) VP Process Operations Services Frank Cappelli Jorge Muñoz Manager Health & Safety Hans Sandoval Slide 19
Slide 20: Employment
Employment Antofagasta Coloso Escondida Santiago Total Mel Expatriates 2 0 11 0 13 Operators 0 70 1.698 0 1.768 Technical & Admin. 21 0 100 0 121 Professional/Mgrs 49 17 475 10 551 Total 72 87 2.284 10 2.453 Permanent Contractors 2.135 •Avg workforce age – 40 years •Avg length of service – 8 years C
Slide 21: Safety – Lost Time Frequency Rate (LTIFR)
Safety – Lost Time Frequency Rate (LTIFR) 5.00 4.54 4.50 4.00 3.77 3.43 3.50 2.81 LTIFR per mmh 3.00 2.50 2.00 2.00 1.65 1.50 1.50 1.00 1.00 0.50 0.00 1998 1999 2000 2001 2002 2003 2004 YTDA 2004 YTDB Fiscal Years Slide 21
Slide 22: Escondida Mine Pit
Dimensions Now Final E-W 2.2km 3.5km Escondida Mine Pit N-S Minera Escondida 3.2km Ltda. 4.8km Depth 465m 750m Slide 22
Slide 23: Escondida Mining Fleet FY-04
Escondida Mining Fleet FY-04 • Electric Rope Shovels – Total 14 - P&H 4100 XPB (73 yd Dipper) 3 - BE 495HR (67 yd Dipper) 1 - BE 495 (55 yd Dipper) 9 - BE 395 (30 yd Dipper) 1 • Haul Trucks - Total 92 - Komatsu 830E (240 mt) 28 - CAT 793 B&C (240 mt) 48 - CAT 797 (380 mt) 16 • Front End Loaders – To
Slide 24: Mine Production – '000s TPD Ex-Pit
Mine Production – ‘000s TPD Ex-Pit 1000 901 900 835 858 814 800 725 678 681 700 '000s Tonnes per Day 600 500 400 300 200 100 0 1998 1999 2000 2001 2002 2003 2004 Fiscal Years Histor y YTD Slide 24
Slide 25: Los Colorados Concentrator
Los Colorados Concentrator Slide 25
Slide 26: Laguna Seca Production – '000s TPD Milled
Laguna Seca Production – ‘000s TPD Milled 100 90 80 70 '000s Tonnes per Day 60 50 95 40 30 51.5 20 10 0 2002 2003 2004 Fiscal Years Histor y YTD Slide 26
Slide 27: Concentrate Grade Ex-Coloso - % Cu Contained
Concentrate Grade Ex-Coloso - % Cu Contained 45.0% 40.0% 35.0% Concentrate Grade % Cu 30.0% 25.0% 20.0% 41.4% 39.8% 39.9% 39.8% 35.6% 37.3% 34.7% 15.0% 10.0% 5.0% 0.0% 1998 1999 2000 2001 2002 2003 2004 Fiscal Years Histor y YTD Slide 27
Slide 28: Coloso Port – '000ts Concentrate Shipped
Coloso Port – ‘000ts Concentrate Shipped 2500 2000 '000s Tonnes Shipped 1500 1000 2,073 2,145 2,105 2,056 1,813 1,853 1,682 500 0 1998 1999 2000 2001 2002 2003 2004 Fiscal Years Histor y YTD Slide 28
Slide 29: Copper Production – '000ts Cu Contained in Concentrate
Copper Production – ‘000ts Cu Contained in Concentrate 1000 900 800 '000s Tonnes of Cu Contained 700 600 500 400 860 838 845 726 755 300 611 641 200 100 0 1998 1999 2000 2001 2002 2003 2004 Fiscal Years Histor y YTD Slide 29
Slide 30: Oxide Production – '000s Tonnes of Cathodes
Oxide Production – ‘000s Tonnes of Cathodes 160 140 120 100 '000s Tonnes 80 150.7 145.1 150.5 136.7 60 113 40 56.4 20 0 1998 1999 2000 2001 2002 2003 2004 Fiscal Years Histor y YTD Slide 30
Slide 31: Copper Production – '000ts Cu Contained
Copper Production – ‘000ts Cu Contained 1200 996 1000 860 894 871 892 151 56 '000s Tonnes of Cu Contained 766 137 754 800 145 151 113 600 400 860 838 845 726 755 611 641 200 0 1998 1999 2000 2001 2002 2003 2004 Fiscal Years Concentr ate Cathodes Total Slide 31
Slide 32: Presentation Content
Presentation Content • Escondida Overview • Operations • Financial Overview • Business Strategy • Growth Opportunities • Marketing • Current Activities Slide 32
Slide 33: C1 Unit Costs in the 1st Quartile
C1 Unit Costs in the 1st Quartile Estimated 2003 Brook Hunt, Copper Industry C1 Cost Curve 125 C1 Cash Operating Cost (US c/lb) 100 75 Esc ondida 50 25 0 0 5000 10000 15000 20000 25000 Cumulative Production (Payable in Mlbs) Brook Hunt Estimated 2003, Escondida FY03 Slide 33
Slide 34: C2 Unit Costs
C2 Unit Costs Estimated 2003 Brook Hunt, Copper Industry C2 Cost Curve 150 C2 Production Cost (US c/lb) 125 100 Es condida 75 50 25 0 0 5000 10000 15000 20000 25000 Cumulative Production (Payable in Mlbs) Brook Hunt Estimated 2003, Escondida FY03 Slide 34
Slide 35: Only Producers with a Lower C3 Unit Cost
Only 3 Producers with a Lower C3 Unit Cost Estimated 2003 Brook Hunt, Copper Industry C3 Cost Curve 175 150 C3 Production Cost (US c/lb) 125 100 Escondida 75 50 25 0 0 5000 10000 15000 20000 25000 Cumulative Production (Payable in Mlbs) Brook Hunt Estimated 2003, Escondida FY03 Slide 35
Slide 36: Strategic Key Element NPV: Optimize Escondida's Net Present Value
STRATEGIC KEY ELEMENT NPV Optimize Escondida’s Net Present Value We will optimize NPV by: – Taking a leadership role within the industry and adopting a flexible production profile – Continually focusing on cost reduction – Leveraging Six Sigma and the Maintenance Improvent Programs – Using tollgatin
Slide 37: Strategic Key Element People
STRATEGIC KEY ELEMENT PEOPLE Achieve Maximum Potential with Employees We willl ensure Maximum Alignment Among Employees, Organizational Structure & Performance Management Systems by: – Attracting and retaining high quality employees – Creating a high performance environment – Focusing on the develop
Slide 38: Strategic Key Element Customers
STRATEGIC KEY ELEMENT CUSTOMERS To Be The Preferred Supplier of Copper in Concentrate & Cathodes We will achieve our value proposition to customers through: – Achieving appropriate geographical and market diversification – Utilizing the BHP Billiton Base Metals Marketing structure – Reducing the imp
Slide 39: Presentation Content
Presentation Content • Escondida Overview • Operations • Financial Overview • Business Strategy • Growth Opportunities • Marketing • Current Activities Slide 39
Slide 40: Sulphide Leach – Project Summary
Sulphide Leach – Project Summary 60-100 Mtpa @ 0.6% TCu • 1.6 billion t sulphide ore at 0.6%tcu raffinate • Current stockpile 100mt • Copper recovery by: Air – ROM leaching – Solvent extraction Solvent Extraction – Electrowinning 180-245 ktpa cathode Electrowinning • Expected recovery 36% Crush & Le
Slide 41: Bioleaching Technology
Bioleaching Technology • Sulphide leaching requires ferric iron as oxidant • Conversion of ferrous iron to ferric is catalyzed by bacteria – Without bacteria, leaching is slow due to lack of ferric iron • Main bacteria are mesophiles such as thiobacillus ferrooxidans • Mesophiles occur naturally in
Slide 42: Presentation Content
Presentation Content • Escondida Overview • Operations • Financial Overview • Business Strategy • Growth Opportunities • Marketing • Current Activities Slide 42
Slide 43: Diverse Customer Base – Concentrate Sales by Destination
Diverse Customer Base COPPER CONCENTRATE SALES BY DESTINATION - 2003 Merchants China Germ any 7.3% 6.1% India 8.0% Brazil 4.1% 3.3% South Korea Sw eden 8.9% Philippines 3.4% 3.0% Spain 2.8% Other 14.3% Bulgaria 2.7% Chile South Africa 22.1% 1.6% Iran 0.4% Japan Finland 25.8% 0.4% Slide 43
Slide 44: Diverse Customer Base – Cathode Sales by Destination
Diverse Customer Base CATHODE SALES BY DESTINATION - 2003 Spain UK 3.0% 2.0% Turkey Canada 0.8% 3.6% Chile Intermediaries / BMAG 4.2% 21.9% Italy 5.9% Brazil 6.7% Germany 12.5% Japan 8.2% Taiwan France 8.5% South Korea 11.8% 10.8% Slide 44
Slide 45: Presentation Content
Presentation Content • Escondida Overview • Operations • Financial Overview • Business Strategy • Growth Opportunities • Marketing • Current Activities Slide 45
Slide 46: Water Issue
Water Issue What caused the water problem between Novembre 2003 and January 2004: •Deteriorated water-pulp separation from tailings •Inability to increase fresh water supply to Laguna Seca Concentrator to compensate reduced reclaim water return •Hydraulic restrictions in the tailings transport syste
Slide 47: Water Issue - How MEL is solving the water problem
Water Issue - How MEL is solving the water problem 1. Secured fresh water to the Laguna Seca Concentrator through an additional water line 2. Implemented an aggressive maintenance program to restore wells in various well fields 3. Identified mineral ore types that cause water-pulp separation problem
Slide 48: Action Plans – HSEC
Action Plans – HSEC • Simplification and streamlining proposal of the HSEC systems under the BHP Billiton Standards • Employ the Landmark process to engage the workforce and ensure their commitment to a zero harm workplace • Implemention of Cardinal Rules Program • Development of Drug/Alcohol Policy
Slide 49: Action Plans – NPV
Action Plans – NPV • Los Colorados Mill improvement program • Mine to mill improvement project • Light dump bodies project • Develop long term water sourcing plan • Inventory reduction program • Flexible production plans • Develop a program for coordinating plants, crushers, shovels, pipelines, filt
Slide 50: Action Plans – PEOPLE
Action Plans – PEOPLE • Implementation of an employee climate survey • Continuous development of a team based work structure • To build an integrated Performance Management system which links competency development, individual performance on the job and remuneration • To perform the second teams che
Slide 51: Action Plans – CUSTOMERS
Action Plans – CUSTOMERS • Eliminate backlog of concentrate deliveries arising from Apollo cuts • Complete Sales Book restructuring – Reduced sales to Merchants – Increase sales to emerging smelter markets, eg., India and China – Initiate spot sales • Continue to push transition to global market ter
Slide 52: Head Grade - % Contained Copper
Head Grade - % Contained Copper 3.0% 2.5% 2.0% Head Grade % Cu 1.5% 2.75% 2.22% 1.0% 1.95% 1.89% 1.69% 1.54% 1.37% 0.5% 0.0% 1998 1999 2000 2001 2002 2003 2004 Fiscal Years History YT D Slide 52
Slide 53: Oxide Flowsheet
Oxide Flowsheet CRUSHING & PRIMARY STOCKPILE SCREENING ORE CRUSHER RAFFINATE CONVEYING SYSTEM PLS EXTRACTION LEACH PAD AGLOMERATION ORGÁNIC ORGÁNIC RECOVERY WASHING SOLVENT EXTRACTION WATER COPPER CATHODES SULFÚRIC ACID STRIPPING 150.000 TPA RICH ELECTROLYTE LEAN ELECTROLYTE ELECTRO-WINNING Slide 53