PI System at Its Most Updated Version

Drastically Reducing Specific Water and Energy In Large Industrial Complexes

Presented by Osvaldo A. Bascur Metals and Mining Industry Principal

Overview of the Large Industrial Complexes

Sustainability Strategies are good business

Real Time Information Integration and Standardization

SouthernPeru, CAP Steel, AngloAmerican, RioTinto, Glencore Coal

Further work and Conclusions

“We are rewarded when we deliver superior value. This means delivering and implementing an infrastructure through which our customers can continuously improve their business performance” Dr. J. Patrick Kennedy CEO & Founder

“OSIsoft has released continuous upgrades for over 20 years and we have never had to repurchase PI software. Even though we have a 20 year old system, we currently run our PI System at its most updated version. I know of no other software company that has this kind of commitment to its products and its customers.” WEYERHAEUSER CORPORATION

Increasing Mergers and Acquisitions Increasing Production Volume and Costs Industry consolidation requires more flexibility in information systems to When operations are running at combine business processes max capacity, operating costs increase and need to be managed

Increasing Demand Growth Tightening Labor Market Increased industrialization as the world economy recovers will drive Lack of expert workforce to fill vacant demand for commodities (copper, jobs, high staff turnover leads to nickel, aluminum, iron, coal, steel, knowledge drain etc.), in addition to lake of resources. Corporate Sustainability

Market & Price Volatility Managing and publicly reporting on the impact of mining activities on the Volatility of commodity prices requires community, the environment and on greater control to manage sales the safety of employees and public revenue and cash flow to ensure profitability Increasingly Constrained Supply Chains

Shipping volumes create heavy demand on ports, low stock levels drive need for constraint-based scheduling

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Coal & Iron Ore Copper Nickel, PGM & Diversified and other Energy Zinc, Lead, Gold Mining Silver Companies

PI Visualization and Collaboration

PI Analytics and Notifications

PI Server and Data Services

Jigsaw

© Copyright 2013 OSIsoft, LLC. 11 Non integrated processes and silo systems result in low visibility and inability to adapt and scale for growth 1 7 Operational Benchmarking High Safety Risk & CEO Sustainability VP Health, Lack of transparency Safety & Poor operational health & safety Compliance procedures, poor compliance management and reporting Regional CFO President 6 COO Low Visibility of Operational Low visibility to operational data across the Performance • 2 company results in poor decisions and sub- Poor Asset Plant floor and business Performance Iron ore users with low visibility Gold Nickel, Zinc, optimal performance.Lead on one version of the Silver High ratio of unplanned vs. planned maintenance truth for all facets of Coal the operations, resulting in lower production rates and availability and higher qualities, no ability to maintenance cost benchmark between regional and global operations

5 Ineffective Sourcing & 4 Spend Mgt Lack of Supply Chain 3 Visibility Poor Transportation Scheduling Inefficient sourcing process and poor spend visibility leading to stock outs No visibility on supply chain constraints • No integration of transportation scheduling with sales and of critical supplies and high costs leading to inability to manage production increasing thoughput rates • No visibility of short term changes in ship and train arrivals • High demurrage costs

•Smelter

Concentr ator•Mine •Refinery

• Tailings • Concentrator Concentrator •Power Plants Headquarter s

Mining Mineral Processing Smelter Refinery

EnergyEnergy AssetsAssets ConsumablReagentses Safety EnvironmentalEnvironmental

INTEGRATE- FIND – ANALYZE- DELIVER-VISUALIZE

© Copyright 2013 OSIsoft, LLC. 14 © Copyright 2013 OSIsoft, LLC. 15 What If Scenarios 1. could you reduce operational energy costs? 20-40% of the cost of steel comes from energy costs. 50-+ of cost of copper comes from energy costs. 70 + of costs of cement comes from energy costs 2. could you save resources and money by reusing water? 62,000 gallons of water are required to produce 1 ton of steel using traditional methods 3. could you utilize alternative energy sources? 68% of steel produced uses coal as the main input 4. could you rapidly adjust for demand change? change in percentage of hot rolled steel coil prices

• Integrating the whole chain to reduce ENERGY Consumption, increase Equipment Availability and REDUCE the environmental management and Reporting. • Anglo American Platinum, South Africa • Anglo American Base Metals, Chile • Alcoa, Deschambeaux, others sites, Canada • Allouette, (Rio Tinto Alcan/Alcoa), Canada • ArcelorMittal, Hamilton, Canada, 4.8 Millions of Steel per year • ArcelorMittal Mining, Quebec, Canada • BHP Billiton Coal, Australia. • CSN, Brazil, 5.6 Millions Tons Steel per year • CSH, Chile, 1.2 Millions Tons Steel per year • Glencore Coal, 10 Underground Mines, • Glencore Nickel Canada. • USIMINAS, Brazil, 4.5 Millions Tons Steel per year • Rio Tinto, Copper Process Excellence Center, OyuTolgoi, KUCC, NP, • SouthernPeru Copper, Cuajone • Tata Steel, Netherlands, England, 10 Millions Tons Steel per year • Tangshan Iron and Steel, China. Energy Savings US$ 200,000,000 Per Year • VALE Inco, Canada • VALE Iron Ore Brazil

Results Long term PROFITS With Sustainability E M N P Opportunities $ A V R I Q I S O C N U R A D Mr. Porter O T A O F U S E L Shared VALUE M E C T N I E T T Strategy for S A T N Y I N Y SUSTAINABILITY T O C A N E L

Systems Real Time Integrated Plant Systems

ISA S95 PI Visualization and Diagnostic Tools Level 4: ERP PI System

Data Access PI Data Access

Referenced Electronic Work Level 3: MES Data Instructions PI PI AF PI EF Real-Time Data Infrastructure Server Common Data Presentation Layer Downtime Analog Level 2 Batch Process data, Event Frames Building automation data, Batch Continuous Discrete& Batch Events Alarm & EventsControl Control Control Startup Level 1 SCADA / SCADA PLC / DCS PLC / All Assets Event Variables & Frames & Attributes Level 0: Equipment Attributes Calculation Consolidatio Real Time sInterfaces © nCopyright 2013 OSIsoft, LLC. 21 © Copyright 2013 OSIsoft, LLC. 22 TransformingEVENTS CAPTURE Datato get into Information Operating Conditions Directly from SCADA Systems or from PI-PE or PI Event Frames Zero Span Datasubsystem Acquisition Communications

ACTION Low High H Data Validation PI Filtering tools to aggregate and tranform data I Use Calculations, Visualization, Flow Compensation into Information, Alerts, Data Mining E Events, Data Mining Tools Use PI AF Data references calculations R Classification & Or use PI ACE if a recursive calculation is If ( F>200 and T>100 Then ST=OK A Analysisto generate ACTION If ( F < 200) Then ST = Trouble required. R And Collaborate at the C Enterprise H Model Selection Model Calculation Y

Coordination DeBottleneck

KPI Examples: Production, Quality, Costs, Equipment Availability, Environmental and Safety alerts with fast resolution and improved decision making.

Continuous Improvement and Innovation

MONITOR IMPROVE MONITOR

In Control? Yes YesSatisfied? Yes KPIs -> In Control? No No No Identify Root Establish Causes Alternatives Identify Root Causes Operations/Maintenance

Strategic Competence Centers Local Operations/Maintenance Maintenance/Engineering/Management

Most Arid Region in the World

Large Energy Requirements

Chile

Objective of the CMD • Technological Center with a future vision oriented to strategic business objectives • Maximize Efficiency, Availability and Confidence • Support the generating plants in: • Operational and Maintenance in an Optimal manner • Reduce to a minimum costs (Production and Technology) • Focus the CMD on the people ( Training of the new technological tools) • Unify the Technological Management (Convergence of IT, Control and Automation)

• Benefits of the CMD • Common Model for the Operational and Maintenance of the Power Plants • On-line expert support distributed for the Operations and Maintenance • Transmitting core Best Practices to the operations • Maintain Internal Know How • CMD Technological Center of Operational Excellence improve the image of ENDESA

© Copyright 2013 OSIsoft, LLC. 29 CAP Acero Huachipato Steel Mill PI System Seminar Y2009 • Fully Integrated Steel Company • Reduction of Pellets in Blast Furnaces to produce Iron • Steel produced in BOF then casted into Slabs • 1.2 Tones of Steel per Year.

• Raw Materials • Select Major Process Areas • Input - Output Production Streams Consumption (Energy, Water, Materials) Targets, requirements, Standard Quality Inventories • Products + (Emissions, Waste) Output • Smooth Factor Indicator Input ConsumptionAsset Waste (Module) – WHAT ABOUT THE PEOPLE????

Availability Safety

Y2001 Bascur and Kennedy, RTI Infrastructure -Asset Optimization, SME Plant Design and Operations Optimization, www.smenet.org

Production

Startup Shutdown

Operating Production time States Running = Key Variables within acceptable range Down = Equipment broke Stopped = Equipment idle Trouble = Equipment not meeting Production target, Environmental, Quality Maintenance = Scheduled Maintenance

Real-time Values Real-time Values • Inlet pressure • Exhaust temperature • Inlet flow • Exhaust flow • Ambient temperature • Measured MW output

Asset Details •Name Notifications •Make • Performance excursions • Model • Temperature difference • High temperature

External Databases • Performance curves Business Calculations Events • Last service date • Performance calculations • Downtime • Design documents • KPI’s • Inspection best •Startup practice • Excursions

3 © Copyright8 2013 OSIsoft, LLC. 38 One element template called UNIT

• Quantified in dollars if possible • ROI •Etc.

PI Cubes and PI Slicers

 Cuajone  Production 87,000 MT fine Copper per day.  Conventional open-pit mine  Concentrator - 10 Grinding Lines.

43% Energy Water 5M3/Ton Cu

Doug Fuerstenau,UC Berkeley Study, 2001

GRADE RECOVERY MAP GRADE

Optimize Grade Ore Type 1 Optimize Efficiency

Ore Type 2

Optimize Recovery and Optimize Recovery Grade RECOVERY

Production

Startup Shutdown

Slicers

Production Benefits:

Economic Benefits:

Integration of Mine Feed Knowledge with Milling, Flotation and Dewatering.

• Anglo American Platinum is the world’s premier PGM producer, supplying approximately 40% of the world’s newly refined Platinum. • Process Division: – 14 Concentrators – 3 Smelters – 2 Refineries – 9 geographic operating areas

Multiple Energy Sources: Electrical, Diesel, Steam from Coal Fired Boilers Electrical energy is key focus Anglo Platinum is a large consumer of electricity

• Distributed Architecture - Limited Network Bandwidth • Local Calculations • Select Data Rolled-up to Central PI System • Master PI AF Replicated to Sites

• “Implementing high level metrics and analyses linked to production clearly shows were the power is used allowing focused energy reduction initiatives. A roll out to the concentrators is in the planning stages. Due to the scale of the concentrator operations the potential benefits are enormous.”

• Thobile Mukuna • Process Engineer

• Business Challenge • Results and Benefits •Large electricity consumption • Solution •Enterprise visibility of all - 450 GWh/month •Use PI AF - granularity and roll- electrical consumption •Target 15% reduction in up •Significant time reduction for electricity consumption 2008 •Visibility - power use at every analysis to 2014 level •Easy construction of BI cubes • PI WebParts and SharePoint, Silverlight •Company-wide integrated •High level metrics - KPIs •Just making the data visible approach to energy saving is resulted in a 1% reduction in required •Provided ability for users to drill down to every level of granularity electrical power use.

• “Started out with condition based maintenance in mind. The resulting “Process Diary” can be used for Downtime, Slowtime, KPI’s, basically anything that can be configured.”

• Michael Halhead • Lead Process Control Engineer

• Business Challenge • Solution • Results and Benefits •Non-standard methods •Time consuming •PI Event Frames and PI •Time savings •Replace Excel solution AF •Enterprise-wide •Provide Enterprise easily •PI ACE to create events standardization configurable solution •Flexibility – not just CBM •Custom Silverlight screens using PI AF •Compare years of data controls •User configurable

Safe Work Places and Full Compliance Safe Work Places and Full Compliance Pro-active and Real-Time CEO compliance management & VP Health, Safety & Pro-active and Real-Time reporting compliance management & Complianc • Increase yourCompetence ability toe better reporting Center manage production optimization,CFO Regional COO President Improved Operational asset utilization, energy efficiency Performance & High Asset Visibility and cost saving. Performance • High visibility to Iron ore Gold Nickel, • High ratio of planned operational Silver Zinc, Lead maintenance, low ratio performance • Data is shared across regions, the Coal of breakdown • Pro-active corporation, enabling enterprise maintenance benchmarking • Increased asset across different visibility—in real-time with RIGHT availability & utilization operations • Reduced maintenance Degree of detail. cost Effective Sourcing & Spend Mgt

• Improved Spend visibility Increased Supply enables better leverage of Chain Visibility & Throughput buying power, Adaptive Transportation Management • Efficient sourcing process • Full visibility on Supply Chain constraints ensuring in time supply of • Integrated supply chain planning enabling • Full integration of transportation scheduling with sales & Production critical items higher throughput • Dynamic rescheduling to react to short term changes in ship or train arrivals • Reduced demurrage cost

Process & Equipment States are: 1.- Running. ProcessFeedRate at target and Energy on 2.- Troubles. ProcessFeedRate lower and Energy on 3.- Stopped. ProcessFeedRate very low and Energy on 4.- Down. ProcessFeedRate very low and Energy medium 5.- Maintenance. ProcessFeedRate very low and Energy very low.

 Dynamic Performance Management Infrastructure with Centralized Operational Collaborative Services  PI Asset Framework standardization and cross-pollination at the local plant and at the Enterprise  PI Asset Notification and PI Real Time Process Analytics using Performance Metrics and Statistical Tools  Visibility Using Internet Web Services with standard BI tools.  RESULTS: Improvements in sustainability management with large operational cost reductions

© Copyright 2013 OSIsoft, LLC. 74 References Anglo American Platinum, Michael Halhead, Data Validation with PI AF, UC 2011 Anglo American Platinum, Michael Halhead, Energy Monitoring, OSIsoft Region Seminar South Africa, Y2011 Anglo American Platinum, Warren Armstrong, Downtime Reporting, OSIsoft Regional EMEA Seminar, Y2011 Southern Peru Copper, Nelver Benavides, Development and Implementation of the PI System at the Southern Peru Copper Cuajone Concentrator and Mine. UC2010 Endesa Latam, Jose Lobo, PI System Seminar Santiago, Chile, Y2007 Endesa Latam, Rodrigo Paredes, PI System Seminar Santiago, Chile, Y2009. Enel, Pestonesi, D., Scapeccia, Costarelli, and Franceschini, L, Remote Supervision Center for Enel Combined Cycle Plants, In Book, Modeling, Control, Simulation and Diagnosis of Complex Industrial and Energy Systems, Ferrarini L and Veber C. Editors. ISA, Y Cap Acero, Mario Flores y Rene Aroqui, Implementacion de PI en CAP Acero, Compania Siderurgica Huachipato, PI System Seminar Santiago, Chile, Y2009. Rio Tinto, Jake Mather, PI-Sigmafine Development at Kennecott Utah Copper (KUC), UC2007 Rio Tinto, Roger Roth, Kennecott Utah Copper Company PI Server, UC2007 DTE Energy, John Kapron and Sumanth Makunur, Fleet Optimization through PI, UC 2007 Iberdrola, Maria Martin, Miguel Chavero, Ignacio Perez,UC 2005, UC2011 OSIsoft, Plant Design and Operations Optimization Proceedings, Bascur and Kennedy, RTI Infrastructure – Asset Optimization, SME 2001

• Osvaldo Bascur • Global Metals and Mining Principal • OSIsoft, LLC. • Cel +1 936 443 6527 • Email: [email protected]