BHP Billiton Iron Ore – Western Australia Iron
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BHP Billiton Iron Ore – Western Australia Port & Rail Operations Mick Evans – Vice President Port & Rail Iron Ore Continuous Improvement in Safety Performance • Continued development of One Business approach to HSEC systems and processes. • Focus areas: -Leadership -Behavioural based systems • Programs & actions: -Take 5/JHA’s Safety - 12 M onth Rolling TRIFR 25 Actual - Stop for safety 22 21 20 2006 YTD - Risk assessments 20 16 -Fit for work/life (fatigue 15 management) 12 -15 HSEC Standards 10 • 40% reduction in TRIFR during 5 FY06 – last quarter was a 0 record low of 7.9. 2004 2005Jul-05 Sep-05 Nov-05 Jan-06 M ar-06 M ay-06 Page 2 17 July 2006 Summary Port Operations: • Final stage of production process; • Crushing, screening & blending to create on- grade products; • Nelson Point & Finucane Island. Rail Operations: • Service nine separate mine/loading facilities; OB 18 • Service two separate port facilities; • Integrated system: mine/rail/port. Page 3 17 July 2006 Railroad Overview Page 4 17 July 2006 BHP Billiton Iron Ore Railroad • Safety focused • Highest axle loads in the world • Emphasis on research • History of innovation Page 5 17 July 2006 Operating Improvements Have Increased Axle Loads Axle Load 37.5t/40.0t 37.5t 35.0t 32.5t 30.0t 28.5t Max. Wet tonnes 89 96 107 116 126 130 per wagon 1970 1974 1986 1996 99-04 05-06 Page 6 17 July 2006 Employee Productivity Tripled in the Past 10 Years Million Tonnes Railed Per Employee 0.301 0.31 0.258 0.245 0.216 0.179 0.167 0.148 0.151 0.126 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 Page 7 17 July 2006 Increasing Operational Flexibility – Rail Sequencing Project • Implemented in November 2005 • Sequentially-based dispatching method that allows trains to depart as soon as they are made up after dumping • The sequence of destinations reflects the required blend ratio for the business (including satellite orebodies) • Computer modeling indicated sequentially based dispatching increases productivity by around 3.5% • Improvements have been consistently delivered around this mark Page 8 17 July 2006 Environment & Efficiency Improvements Contributing Factors 1.45 ¾ Rail / Wheel profile ¾ Aerodynamic Ore Cars ¾ Efficient Locomotives ¾ Distributed Power 0.72 Fuel Savings ¾ Higher Axle Load Litres of diesel per wet tonne ¾ Longer Trains 1978 2006* ¾ Driver Strategy * Q3 FY06 Page 9 17 July 2006 World’s Longest and Heaviest Train • 682 wagons = 7.353kms • eight GE AC6000 locomotives • 99,732 gross tonnes • 82,262.5 tonnes of iron ore • distributed power / 5 locations • single driver Page 10 17 July 2006 BHP Billiton Rail Lines - Among the Best in the World Track Productivity Locomotive Productivity Gross Tonne Railed per Route Km Million Net Tonne-Kilometres / Loco / Year 757 200,283 192,095 573 140,338 421 327 83,402 70,408 247 63,593 185 43,466 134 BHPB GJV BHPB NJV Coal Line Brazil 1 Brazil 2 Sweden Ore Line BHPB GJV BHPB NJV Coal Line Brazil 1 Brazil 2 Sweden Ore Line Wagon Productivity Labour Productivity (Including Contractors) Million Net Tonne-Kilometres / Wagon / Year Million Net Tonne-Kilometres / Person / Year 76.90 11.26 11.57 7.84 6.27 39.10 5.96 5.46 4.35 23.60 13.70 18.20 10.30 7.30 BHPB GJV BHPB NJV Coal Line Brazil 1 Brazil 2 Sweden Ore Line BHPB GJV BHPB NJV Coal Line Brazil 1 Brazil 2 Sweden Ore Line Source: BHP Billiton, P.L. Ross Consultants Ltd Page 11 17 July 2006 Current Train Operations Newman Line • Up to 14 trains per day to port & same back to mines (pass via sidings) • Flexibility of one / two / three Rake Trains • Train configuration: 1 rake = 104 ore cars = 12,480 tonnes of ore 2 rakes = 208 ore cars = 24,960 tonnes of ore 3 rakes = 312 ore cars = 37,440 tonnes of ore Goldsworthy Line • 4 ore trains per day • Train configuration: 90 ore cars = 7,650 tonnes of ore Page 12 17 July 2006 Operational Delays Flow Through Entire System Xbar-R Chart of Dumper Effectiveness by Group ) 37 5 5 UCL=5304 ay d / 5000 _ _ • Delay at Port tph ( 4500 X=4533 n ea 4000 6 Hedland M 5 e LCL=3763 l p 3500 1 am 1 S 3000 15 19 23 27 31 35 39 43 47 Weekly Sub-group • Increased rail Xbar – R Chart of Rake trip Time by Group 28 37 1 cycle time 28 1 1 1 24 1 UCL=23.35 1 _ • Less trains arrive X= 21.41 20 LCL=19.47 at mines SampleMean(hrs/rake) 15 19 23 27 31 35 39 43 47 WeeklySub-group Xbar-R Chart of NJV ROM Production (OFR) ) 5 UCL=126109 120000/day • Full stockpiles _ _ (tonnes100000 X=105028 n Mea 1 1 LB=85526 • Lower mine e 80000 1 production Sa mp l 15 19 23 27 31 35 39 43 47 Weekly Sub-group Page 13 17 July 2006 Infrastructure Access – Key Issue for Continued Growth • The integrity of our rail network is vital to the efficient operation and expansion of one of the country’s leading export industries; • Track access (ie: Part IIIA imposed) is inefficient due to: – Loss of operational flexibility – Decreased rail & system capacity – Delays to future expansions • And will result in: – Very high access charges – Subsidies from BHP Billiton – Reduced investment incentives • Better solutions exist (safer & far more efficient): – Haulage agreements (ie: State Based RTA) – Mine gate sales • We strongly believe in our position and will continue to vigorously defend it. Page 14 17 July 2006 Port Hedland Nelson Point Finucane Island Page 15 17 July 2006 Port Operations Overview • Nelson Point & Finucane Island • 365 days per year operation • Crushing, screening & blending • Plan is for four ports (2 x Nelson Point and 2 x Finucane Island) with stockyard dedicated to each • Average maximum sailing draft (MSD) 17.94m • A dynamic underkeel clearance program (DUKC) is utilised to calculate vessel maximum sailing draughts • Port is serviced by 7 tugs (5 X 50 tonne & 2 X 65 bollard pull) Page 16 17 July 2006 Nelson Point Site Layout Page 17 17 July 2006 Finucane Island Site Layout Page 18 17 July 2006 Stockpiling – Key to On-Grade Production • Stockpiles are blended (homogenised) as they are built – ‘Chevron Ply’ stacking • Homogenising ensures grade Top Bench deviations are decreased, compared to original Middle Bench ore stream • Crucial to producing on-grade products Bottom Bench Typical stockpile cross-section, showing the chevron ply pattern. Taking a cross-section when the stockpile is reclaimed yields a composition that is close to the average for the whole stockpile. Page 19 17 July 2006 Demand for Products is Dynamic… Demand Variability by Product Weekly values and 4 weekly moving averages of vessel arrivals 1,600,000 1,500,000 1,400,000 1,300,000 1,200,000 1,100,000 1,000,000 900,000 800,000 700,000 tonnes per week 600,000 500,000 400,000 300,000 200,000 100,000 0 Jul-03 Jul-04 Jul-05 Jun-05 Mar-0 4 Jun-04 Jan-04 Oct-03 Apr-05 Feb-04 Nov-03 Dec-03 Sep-03 Sep-04 Oct-04 Nov-04 Dec-04 Jan-05 Feb-05 Mar-0 5 Apr-04 May-04 Aug-03 Aug-04 May-05 NHGL NHGF YNDL YNDF MACL MACF F:\Projects\J0102 -BHPBIO - IP Support\Data\Analysis\Shipping\[ShipDataMaster a.XLS]ProductVariability Page 20 17 July 2006 …and Has Always Been Demand Variability Weekly values, 4 weekly and 6 monthly moving averages of sum of all products on vessel arrivals 3.0 2.5 2.0 1.5 mt/week 1.0 0.5 0.0 Jul-92 Jul-93 Jul-94 Jul-95 Jul-96 Jul-97 Jul-98 Jul-99 Jul-00 Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Weekly Values 4 Week Moving Average 6 Month Moving Average F:\Projects\J0102 - BHPBIO - IP Support\Data\Analysis\Shipping\[ShipDataMaster a.XLS]Variability Page 21 17 July 2006 Port Hedland Shipping • Entry to port by inwards route located to the East of main channel • Exit from port by 43kms marked dredged channel • Parameters affecting vessel movements: ― Under keel clearance ― Vessel handling ― Tides • Target gross loading rate 5,850 tph • Target turn around time 85 hours Page 22 17 July 2006 Port Hedland Channel Overview Page 23 17 July 2006 Vessel Movements - Limited Windows of Opportunity Page 24 17 July 2006 Developing Partnerships to Enhance Port Hedland • Expect to invest more than A$100 million in the Pilbara over next decade – based on internationally recognised social research • Service Delivery: – Developed MOUs with WA Government to address service issues (>A$12 million) • Local Infrastructure: – Greening & cultural/tourism developments – A$3 million to improve local infrastructure, ie: playgrounds, parks, footpaths, etc (in addition to A$4.5 million for coastal upgrades) • Alternative Economic Development & Capacity Building: – Indigenous arts skills program – developing retail businesses and export opportunities – Curtin University campus in Port Hedland Page 25 17 July 2006 The End Product 225,000 tonne ore carrier leaving Port Hedland Page 26 17 July 2006 Page 28 17 July 2006.