Iluka Resources Limited · ASX:ILU
Iluka Resources — Technical Presentation (July 2014)
75 slides from Iluka Resources's technical presentation, July 2014
Slide 1: Jacinth-Ambrosia Site Visit
Iluka Resources Limited Jacinth-Ambrosia Site Visit Eucla Basin, South Australia July 2014
Slide 2: Disclaimer – Forward Looking Statements
Disclaimer – Forward Looking Statements Forward Looking Statements This presentation contains certain statements which constitute “forward-looking statements”. These statements include, without limitation, estimates of future production and production potential; estimates of future capital expenditu
Slide 3: Operational Overview
Operational Overview Steve Wickham, Chief Operating Officer, Mineral Sands
Slide 4: Executive Team
Executive Team DAVID ROBB BSc, Grad Dip (Personnel Admin), FAIM, FAICE Managing Director BP, Wesfarmers Ltd 2006 DOUG WARDEN STEVE WICKHAM MATTHEW BLACKWELL ALAN TATE CHRIS COBB CAMERON WILSON BCom, CA, MBA, GAICD Assoc Dip Mech Eng B Eng (Mech), Grad Dip BCom, FCA, FAICD Dip CSM, FIQ, MAICD LLB, GA
Slide 5: Iluka International Presence
Iluka International Presence 5
Slide 6: Mineral Sands Operation Team
Mineral Sands Operation Team Chief Operating Officer Mineral Sands Steve Wickham General Manager Chief Mining HR Manager General Manager Eastern Operations South West Narngulu Operations Commercial Engineer Mineral Australian US Operations Manager Operations Manager Manager Mineral Sands Sands Opera
Slide 7: Mineral Sands Operations Integration
Mineral Sands Operations Integration USA 7
Slide 8: Operational Overview
Operational Overview • Operations in Australia and United States, sales offices globally distributed • Approximately 620 operational employees (direct Iluka, excluding contractors) • At 31 December 2013 approximately 10 years reserve cover; resources ~6 times Ore Reserves • Flexible operational mind
Slide 9: Mineral Sands Production and Sales
Mineral Sands Production and Sales Rutile Production Volumes kt 2009 2010 2011 2012 2013 2014F Zircon 263 413 601 343 285 360 Rutile 141 250 281 220 127 190 Synthetic Rutile 404 347 285 248 59 - Total Z/R/SR 808 1,010 1,167 811 471 550 Ilmenite 833 685 660 674 584 Not Guided 2014F per Iluka Key Phys
Slide 10: Operational Response
Operational Response Volumes down ~53% Costs down ~33% • Major operational restructure, cost reduction and capital efficiency programs implemented • Material reduction in cash production cost; some inefficiencies on unit cost basis (see note below) • Operations priorities: safety, production costs,
Slide 11: Cash Conservation Focus
Cash Conservation Focus 40% reduction 63% reduction Relates to ~ $200m to ~$250m average p.a. sustaining and growth capital expenditure, which is both an historical average and expectation for the company’s 2014-2018 corporate planning cycle. The $200m level shown on the chart. 11
Slide 12: Operational Response and Cost Reductions
Operational Response and Cost Reductions • Narngulu SR kiln idled April 2013 • Eneabba mine idled April 2013 • North Capel SR kiln idled end Q2 2013, key staff retained, re-start ready • Tutunup South mine idled end Q2 2013, restart ready per SR kiln timing • Narngulu (WA) mineral separation plant o
Slide 13: Operations – Options Flexibility
Operations – Options Flexibility Demand Strong Expand J-A Re-start SR1 & other kilns capacity +TIO2 +ZIRCON Aurelian (US) Hickory (US) Increase MSP Hickory Re-start SR2 utilisation Balranald/Cataby (Aust) Balranald/Cataby Draw inventory Draw inventory Time Time 2018 2017 2016 2015 2014 2013 2013 201
Slide 14: 2013 and 2014 Production Settings
2013 and 2014 Production Settings 2013 2014 Murray Basin Mining (WRP) Full utilisation Hamilton MSP ~50% utilisation ~80% utilisation Focus on balancing Jacinth-Ambrosia Mining Full utilisation – unit costs & concentrate build inventory position objectives Narngulu MSP ~40% utilisation ~50% utilisat
Slide 15: Project Execution and Delivery
Project Execution and Delivery WRP Mine – May 2012 Kulwin Mine – October 2009 Echo Mine – April 2010 Jacinth-Ambrosia Mine – October 2009 Eneabba Restart - January 2011 Tutunup South Mine – June 2011 15
Slide 16: Operational and Project Implementation - What Worked
Operational and Project Implementation - What Worked ‘Focused on what we control – safety, environment, costs, capital, inventory & stakeholders’ Culture • Adaptive cultural change in 2009 based on leadership, accountability and flexibility • Focused on ‘setting high standards and achieving them’ -
Slide 17: Continued Improvement in Safety Performance
Continued Improvement in Safety Performance Iluka Injury Frequency Rates • Safe Production Leadership program launched in 2011 • 70% reduction in TRIFR since 2011 • 80% reduction in LTIFR since 2011 17
Slide 18: 2014 Premier's Community Excellence Awards
2014 Premier’s Community Excellence Awards Jacinth-Ambrosia’s Nick Travers accepting the award from the Minister for Resources Iluka’s environmental excellence award recognises: • A demonstrated commitment to maintain and improve environmental outcomes for all • Environmental excellence beyond minim
Slide 19: Mineral Sands Project Development
Mineral Sands Project Development Project Location Characteristics Pre-execute Hickory Virginia, USA • Chloride ilmenite with associated zircon • Utilisation of existing mineral separation plant (MSP) • ~ 9 year mine life Definitive Feasibility Study Balranald Murray Basin, NSW • High grade rutile,
Slide 20: Project Development Overview
Project Development Overview Gavin Swart, General Manager Major Projects
Slide 21: Project Management in Iluka
Project Management in Iluka • Project management within Resources Development – Doug Warden, Head of Resources Development • Cross disciplinary team working in close association with: – Innovation and Development – Exploration – Operations (integration with existing infrastructure and project delive
Slide 22: Project Development
Project Development GAVIN SWART Dip. Project Management, B. Eng, B. Bus. Mgmt, AUSIMM General Manager Major Projects - Australia Anglo American, Namakwa Sands, KZN Sands, Bemax Resources VICTOR ARAUJO WAYNE MITCHELL DON ACKERMANN YVONNE GREEN TOM BLACKWELL Dip. Project Mgmt, Dip. Bus B. Mechanical E
Slide 23: Project Development – Iluka Context
Project Development – Iluka Context • Gated approach and commitment to various internal production options – dependent on portfolio optimisation – market demand considerations • Capital-efficient focus – utilisation of existing assets, infrastructure and “spare” kit • Capital estimates not provided
Slide 24: Overarching Schedule
Overarching Schedule Front End Loading Assess Select Develop Execute Operate Define project Develop Finalise project Produce operating Operate the opportunity and options and scope, schedule, asset/business asset/business alignment with determine estimate, funding consistent with to maximise strateg
Slide 25: The Value of Front End Loading
The Value of Front End Loading Effect of change and opportunity to add value PROJECT LIFE CYCLE Plan/ Feasibility Realisation Close Assess Select Develop - Execute Opportunity Decreasing Out Constructive Destructive Cost Increasing Opportunity Intervention OPPORTUNITY TIME 25
Slide 26: Iluka Project Management System
Iluka Project Management System • Gated approach to project delivery • Outsourcing of study packages • Integrated Engineering, Procurement, Construction and Management (EPCM) teams 26
Slide 27: Projects
Projects Project Progress Next Steps • DFS Phase 1 works continuing on schedule • Site activities for hydrogeological Trial phase 3 (HP3) • Revised hydrogeological model update with drilling completed with long term test commenced • DFS phase 2 MEP Balranald • Environmental Scope (to complete EIS) a
Slide 28: Projects – United States
Projects – United States Project Progress Next Steps • DFS completed in December 2012 • Pre-execute stage – progress dependent on • Secure appropriate commercial arrangements Hickory appropriate commercial arrangements • Construction timeframe – 15 months • Design completed and initial vendor bids r
Slide 29: Areas of Investigation – STA Deposits
Areas of Investigation – STA Deposits • In mid-2012 the Major Projects team began looking at potential new production options in the Eucla Basin including the following satellite deposits: – Sonoran-Typhoon; and – Atacama. • These deposits are immediately adjacent to the Jacinth-Ambrosia mine, and c
Slide 30: Proposed STA Mining Leases
Proposed STA Mining Leases 30
Slide 31: Sonoran, Typhoon, Atacama Innovative Mining Method
Sonoran, Typhoon, Atacama Innovative Mining Method 31
Slide 32: Jacinth-Ambrosia Operation
Jacinth-Ambrosia Operation Scott McQueen, General Manager Commercial, Mineral Sands Jamie McDonald, Jacinth-Ambrosia Site Manager Dave Wright, Jacinth-Ambrosia Site Manager
Slide 33: Jacinth-Ambrosia Ore Reserves
Jacinth-Ambrosia Ore Reserves JORC 2012 Status (Dec-13) Ore HM In-Situ Zircon Ilmenite Rutile (Mt) (Mt) (%) (%) (%) Ore Reserve - proved 119.7 5.1 51 27 4 Ore Reserve - probable 3.4 0.1 51 20 5 Total 123.1 5.2 51 27 4 Note: Refer to Iluka’s Ore Reserves and Mineral Resources Statement 2013, Iluka An
Slide 34: Jacinth-Ambrosia Satellite Mineral Resources
Jacinth-Ambrosia Satellite Mineral Resources JORC 2012 Status (Dec-13) Ore HM In-Situ Zircon Ilmenite Rutile (Mt) (Mt) (%) (%) (%) Typhoon – measured 23.7 1.5 13.2 62.7 0.9 Sonoran – indicated 27.0 1.9 17.1 64.2 2.3 Sonoran – inferred 0.5 0.1 35.4 49.4 4.7 Atacama – inferred 110.0 9.9 13.2 68.9 1.8
Slide 35: Jacinth-Ambrosia Overview
Jacinth-Ambrosia Overview • Located within Yellabinna and Nullarbor regional reserves • First operation approved for mining in mixed use reserves within South Australia • Development capital expenditure: $390 million (74% in SA / 26% elsewhere) • Sealed air strip and haul road upgrade: $10 million •
Slide 36: Production Overview – to end June 2014
Production Overview – to end June 2014 Metrics YTD Ore mined million tonnes 3.9 Ore grade % HM 7.5 HMC produced kt 265 HMC Assemblage % • Zircon 55.2 • Rutile 6.3 • Ilmenite 26.5 36
Slide 37: Scope of Operation
Scope of Operation Jacinth-Ambrosia Processing Facility Operational • Ore body 900m wide by 5 km long • Low in moisture, no groundwater, strip ratio 0.5:1 • Ore at average thickness of 20 metres • Mining unit plant in-pit ~1,300tph • Wet Concentrator ~1,000tph • HMC transported 270km by sealed road
Slide 38: Mining Method
Mining Method Slice - 5 Red Slice - 4 Red Slice - 3 White Grey mix Slice - 2 White Grey Slice - 1 Floor • 150m x 100m ore blocks • Ore pushed by dozers into mobile mining unit plant dozer trap • Primary geological grade maintained via blending ‘slices’ at various grades across ore block • Mining uni
Slide 39: Wet Concentrator
Wet Concentrator Red loam White strand • Cyclones remove slimes from ore slurry (sent to thickener) • Ore to constant density tank to ensure steady feed to the spiral circuit • Spiral circuit separates heavy mineral from the sand • Heavy mineral concentrate stacked for further processing (MSPs) • Sa
Slide 40: Operational Performance
Operational Performance • Risk: MUP downtime WCP downtime • Downtime equals inefficiency • Consistently high MUP/WCP availability >95% • Includes maintenance and MUP moves outages White strand • Risk: sudden large orebody grade variations • Focus on in-pit blending for stable WCP feed grade • Maximi
Slide 41: Logistics
Logistics • HMC transported by road to Port of Thevenard • Fully sealed journey, including 94km mine access • Utilising purpose built B-Triple 96 tonnes trucks • Transport provider – Kalari • 40,000 tonnes HMC storage facility at Port • Long term contract to utilise ABB / Viterra ship loading facili
Slide 42: Jacinth-Ambrosia HMC Processing
Jacinth-Ambrosia HMC Processing • Processed at both Australian separation plants to optimise throughputs, recovery, quality & unit costs • Narngulu MSP primarily J-A feed, Hamilton MSP primarily Murray Basin feed with ~30% J-A blend • J-A HMC processing capacity- ~700 ktpa Narngulu and ~200ktpa Hami
Slide 43: Jacinth-Ambrosia Production Cash Costs
Jacinth-Ambrosia Production Cash Costs • Jacinth-Ambrosia annual cash cost of production (including downstream separation and support) ~ $140 million • Higher proportion of cash production costs incurred post mine gate • Annual cash production cost levels vary dependent on strip ratio, grade, throug
Slide 44: Sustainability Performance
Sustainability Performance 44
Slide 45: Workforce Development and Diversity
Workforce Development and Diversity • Total workforce 156 (Iluka 67, contractors 89) • 20% Far West Coast indigenous employment target (reached and exceeded) • Strong indigenous and local components. Gender diversity remains a challenge • Development success stories - indigenous redeployment to othe
Slide 46: South Australian Regional Contribution
South Australian Regional Contribution • Jacinth-Ambrosia sole mining operation in region Iluka: 67 employees, 48% local Contractors: 89 employees (mining, logistics & services) • Economic contribution*: 292 jobs and $66.1 million in value add to region additional 646 jobs and $85 million va
Slide 47: Environmental Management
Environmental Management Heavy mineral concentrate containment • Stockpile management plan developed in 2013 • Containment fence installed Q4 2013 • Semi-permanent stabilisation undertaken routinely • Geo-bituminous membrane trial in Q3 2014 47
Slide 48: Environmental Management
Environmental Management Dust emissions from mining • Three water trucks at site • RO plant for non-saline water on topsoil areas • Slimes (clay fines) used to stabilise inactive area’s Port of Thevenard containment • Sprinkler system installed around enclosed bund • Continuous improvement regime th
Slide 49: Land Rehabilitation
Land Rehabilitation Pre-Mining Cell 1 East 2012 Disturbance complete, tails and soil return • Cell 1 East site represents the initial mining void • Cell void initial fill with tailings • Completed backfill, stabilisation, seeding and stick replacement • Area rehabilitation completed in-line with SA
Slide 50: Land Rehabilitation
Land Rehabilitation 2013/2014 Active Rehabilitation • Favourable rainfall events in 2013 winter have aided plant germination • Research and study programs targeted at validating alternative profiles to MARP commitments 50
Slide 51: Supplementary Information
Supplementary Information
Slide 52: Physical flow data
Physical flow data Iluka Operating Mines - Physical Data 6 Months to 30 June 2014 Jacinth- Murray Western Australia Group Ambrosia Basin Australia Total Virginia Total Mining Overburden Moved kbcm 830.0 8,354.4 - 9,184.4 - 9,184.4 Ore Mined kt 3,923.1 1,719.5 - 5,642.6 1,841.6 7,484.2 Ore Grade HM %
Slide 53: Mineral Separation Process
Mineral Separation Process MSPs separate minerals based on differences in conductivity and magnetism 53
Slide 54: Mineral Separation Plant - Separation Process
Mineral Separation Plant - Separation Process Hamilton Mineral Separation Plant example: • Divided into seven circuits • Gravity, electrostatic and magnetic separations repeated throughout to achieve quality targets • Finished products: – zircon premium – zircon standard – rutile 95 – rutile 92 – il
Slide 55: Western Australian Operations - Overview
Western Australian Operations - Overview • Two sites (Geraldton and Capel) • Narngulu MSP processes J-A HMC producing – premium zircon – zircon in concentrate – chloride ilmenite – HyTi 91 • 4 synthetic rutile kilns capacity – 2 Mid West – 2 South West • Tutunup South mine (currently idled) • Additi
Slide 56: Narngulu MSP Logistics Overview
Narngulu MSP Logistics Overview (Feed stock and finished goods) 56
Slide 57: Narngulu MSP Plant 1 and Plant 2
Narngulu MSP Plant 1 and Plant 2 57
Slide 58: Narngulu Zircon Finishing Plant (ZFP)
Narngulu Zircon Finishing Plant (ZFP) 58
Slide 59: Murray Basin - Overview
Murray Basin - Overview • Hamilton Mineral Separation Plant processes WRP/J-A HMC producing – premium zircon – standard zircon – rutile 95 – ilmenite • Woornack, Rownack, Pirro mine • Additional deposits – Balranald, Nepean, Euston 59
Slide 60: Northern Murray Basin Deposits, Victoria
Northern Murray Basin Deposits, Victoria • Kulwin commenced mining June 2009 /completed June 2012 • Woornack, Rownack, and Pirro (WRP) mining commenced October 2011 Mine Length Average Average ore (km) width (m) thickness (m) Woornack 16.5 115 – 130 5-6 Rownack 8.0 50 - 85 2-4 Pirro 10.5 70 – 90 4-5
Slide 61: Murray Basin: WRP - Scope of Operations
Murray Basin: WRP - Scope of Operations • Three WRP deposits mined, 6 pits in total • Average dewatering rate of 18 ML/d (5 to 36ML/d) • Mining unit plant out of pit: 500tph • Wet concentrator (WCP): 250tph • HMC production: 60tph • Water transported from GWM pipeline to site 7km • Mains power • HMC
Slide 62: Murray Basin Operations - Mining
Murray Basin Operations - Mining • Mine 3.5mt of ore and 8.8 million cubic metres of waste per annum • Strip ratio - 9.4 • Scrapers on waste removal and truck and digger fleet primarily on ore • Planned area disturbed by mining and infrastructure – 1,330ha (incl. 205ha of native vegetation) 62
Slide 63: WRP Operations – Blending Ore
WRP Operations – Blending Ore Pirro ore Woornack West Pirro ore Mining Unit Plant Woornack East • Ore mined in discrete 100m long in pit blocks and sent to ROM as a specific parcel • Single Pirro stockpile (lower HM, higher clay), two Woornack stockpiles (higher HM, lower clay) • Ore loaded into min
Slide 64: WRP Operations - Processing
WRP Operations - Processing MU18- Mining Unit Plant Apron Drum Scrubber Feeder Trommel ROM Grizzly Feed Hopper Wet Concentrator Plant Mining WHIMS PCP Contractor WCP Building Building Workshop Building HMC stocks Thickener MU10 64
Slide 65: Mining and Concentrating Process
Mining and Concentrating Process Tailings Storage Facility (TSF) Non Magnetic Portland Heavy Mineral Concentrate (HMC) 65
Slide 66: Virginia USA – Overview
Virginia USA – Overview • Stony Creek MSP processes Brink HMC producing – ultra grade zircon – premium zircon – chloride ilmenite • Brink mine • Concord mine (idled) • Additional deposits – Hickory and Aurelian Springs 66
Slide 67: US Operations Overview
US Operations Overview Concord Mine Site (Sussex and Dinwiddie Counties) • Commissioned in 1997 • 3.3mt of ore mined per annum • Idled in April 2014, with ore remaining to be mined Brink Operations (Greensville County) • Commissioned in 2009 • 3.3Mt of ore mined per annum • Current ore reserves fore
Slide 68: US Operations - Mining Process
US Operations - Mining Process Mining Summary • Mining Unit (MUP) capacity of ~ 500tph • Unit designed around ease of mobility • Innovative shredder concept utilized • Low cost mining method • Minimal overburden removal Concentrating Summary • Concentrator capacity of ~260tph Rougher Head Feed (RHF)
Slide 69: US Operations – Mineral Separation Plant
US Operations – Mineral Separation Plant Mineral Separation Plant Summary • Feed rate of ~55tph • Feed capacity ~450kt HMC pa • Ilmenite production ~300kt pa • Zircon Production ~45kt pa 69
Slide 70: Jacinth-Ambrosia Land Rehabilitation
Jacinth-Ambrosia Land Rehabilitation Cell 1 West (in 2013) The Cell 1 Trial Cell 1 West (2014) rehab just completed Cell 1 East ( in 2013) Cell 1 East (2014) 70
Slide 71: Rehabilitation research
Rehabilitation research • Imperative to share research outcomes across the broader community to assist in rehabilitation efforts and promote open dialogue and learning within the mining industry • 2013 site visit to Jacinth-Ambrosia as part of the Australian Mining Rehabilitation Conference • Partne
Slide 72: Western Australia - Land Rehabilitation
Western Australia - Land Rehabilitation Rehabilitation at Tiger Gully River, Yoganup 72
Slide 73: Murray Basin - Land Rehabilitation
Murray Basin - Land Rehabilitation Rehabilitation at Douglas, Victoria 73
Slide 74: US – Virginia Land Rehabilitation
US – Virginia Land Rehabilitation • ~1,600 acres of reclamation completed over the life of Virginia Operations • ~2,000 acres of disturbed open area requiring rehabilitation • Long term partnership with Virginia Tech, with annual funding provided – focus on improving rehabilitation methods to improv
Slide 75: Iluka Resources Limited
Iluka Resources Limited For more information, contact: Robert Porter, General Manager Investor Relations robert.porter@iluka.com +61 3 9225 5008 / +61 (0) 407 391 829 www.iluka.com 75