The age of the innovators Sandeep Biswas Managing Director and Chief Executive Officer
Melbourne Mining Club, 9 February 2017 Innovation on the frontline
CASE STUDY Block cave Finding a safer way drawpoint layout to conduct secondary break activities
Water cannon operated from inside cab
Remote drilling and charging
1 Mining industry has consistently adapted
$8
Copper price (US$/lb) v Operating cost over time (US$/lb) Operating Cost Copper Price
$6
$4
$2
Pre-1975 data is estimated
$0 1900 1920 1940 1960 1980 2000
Source: R.Schodde, MinEx Consulting, 2010, The key drivers behind resource growth: an analysis of the copper industry over the last 100 years, supplemented by data from Wood Mackenzie Y axis represents US$/lb C1 costs (in real 2016$ terms) for period 1900 – 2016. Data prior to 1975 is estimated 2 Innovations have driven ~70% of reduction in cost base ~30% from increased scale
Liberation Finding Big Scale-up Optimisation Control Digital Age
• Flotation • Big deposits • Bulk explosives • Flash smelting • Process control • Automation • Leaching • Depression • Bulk pit mining • Geo-models • Optimisation • Remote operations • Smelting • WWII • Large mills • HPGRs • Deep caving • Artificial intelligence • Transport • Float cells • Copper SXEW • Instrumentation • Drones • Gravity • Caving • CIP • Bacterial oxidisation • Surface miners Innovations • Mineral scanners
$200 US$/tonne of ore $160
$120 -70% $80 -60% -60% $40 Pre-1975 data is estimated $0 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
Source: R.Schodde, MinEx Consulting, 2010, The key drivers behind resource growth: an analysis of the copper industry over the last 100 years Y Axis represents estimated average operating costs (US$/tonne of ore) for copper mines in the Western World: 1900-2009 including transportation, smelting & refining and marketing costs Trendline is a order 4 polynomial, projecting data to 2016 3 But we are slow to apply innovations
Application regularly lags ‘invention’ by many years Australian development
Nominal industry innovation adoption time in year
Jameson flotation cell, 1987 8
Fine grind IsaMills, 1994 9
Flotation, 1905 10
Large scale open stoping, 1960s 15
Bulk explosives & 30 mechanised mining, 1950s
Digital process control, 1980s 36 Still progressing
High pressure grinding rolls, 1972 45 Still progressing
Sources: University of Queensland Professors Napier-Munn, McKee, Johnson, Knights, Chitombo Rising to the challenge: Productivity & grades in decline
2004 to 2013 index CAGR Total Factor Productivity (MPI) Global mine productivity (Calculated)
-3.5% p.a. -6.2% p.a. Average grade estimate -2.7% p.a.
Source: McKinsey Basic Materials Institute (BMI Mining Model) 5 Processing innovations tackling declining grade
CASE STUDY Selective 20% Telfer processing at Telfer throughput
Levers
Selective 1 processing
Modern 2 process control
6 Rising to the challenge: Increasing equipment utilisation
Average Overall Equipment Efficiency (OEE)
85% 88% 92% 69%
39% 27%
Underground Open pit Crushing Paper Oil and Oil mining mining & grinding mill Gas refining
Source: McKinsey research and analytics 7 Mining companies use just a fraction of their data
Data Data Visualisation capture management Execution Analytics & Infrastructure Automation
<1%
Operational information Data not used Data not in decision Data not Data not communicated making analyzed Data not accessible Failure Data not streamed points captured or stored
Source: McKinsey Basic Materials Practice Open collaboration on big data delivering results
CASE STUDY SAG mill surge events Unearthed Hackathons This slide is not complete,Insights so deliverdon’t worry about it, but I wantimproved the icon to ‘emphasise’ the experimental,performance collaborative and the fast adoption (and have ‘transformative vision’ as a secondary focus only).
July 2016 Dec 2016 Hackathon
9 Rising to the challenge: More new mines will be deeper
We are progressively exploring under deeper cover -500 Base metal deposits found in the world between 1900-2013
0
500
1000 Depth (metres)Depth Copper 1500 Nickel Zinc/Lead
2000 1900 1920 1940 1960 1980 2000 2020 10 N = 1034. NB. Size of bubble refers to ‘Moderate’, ‘Major’ and ‘Giant’ sized deposits. Excludes Nickel Laterite deposits. Source: R. Schodde, MinEx Consulting, The Global Shift to Undercover Exploration, 2014 Innovation key to making deep, low-grade deposits viable
CASE STUDY Bulk underground mining at Cadia East Cadia
11 The age of the innovators
Ben, here we want to bring it all together. The main message at the end is that the future belongs to the innovators. And that we need to increase our level of innovation to deal with the challenges we face. I don’t yet know what the best way to finish it is, will continue to think about this as you work on the other stuff. If you have any ideas though – an infographic, a metaphor, a collage of elements of previous slides - please send them my way.
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