Sandeep Biswas

Managing Director and Chief Executive Officer

Melbourne Mining Club, 9 February 2017

The age of the innovators

1

Remote

drilling and

charging

Block cave

drawpoint

layout

Water cannon

operated from

inside cab

CASE STUDY Finding a safer way

to conduct secondary

break activities

Innovation on the frontline

$0

$2

$4

$6

$8

1900 1920 1940 1960 1980 2000

Operating Cost

Copper Price

Mining industry has consistently adapted

2

Pre-1975 data is estimated

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

Copper price (US$/lb) v Operating cost over time (US$/lb)

Innovations have driven ~70% of reduction in cost base

3

Liberation Finding Big Scale-up Optimisation Control Digital

• Flotation

• Leaching

• Smelting

• Transport

• Gravity

• Big deposits

• Depression

• WWII

• Bulk explosives

• Bulk pit mining

• Large mills

• Float cells

• Caving

• Flash smelting

• Geo-models

• HPGRs

• Copper SXEW

• CIP

• Process control

• Optimisation

• Deep caving

• Instrumentation

• Bacterial oxidisation

• Automation

• Remote operations

• Artificial intelligence

• Drones

• Surface miners

• Mineral scanners

Ag

e

Inn

ova

tio

ns

$0

$40

$80

$120

$160

$200

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

US$/tonne of ore

-70%

-60% -60%

Pre-1975 data is estimated

~30% from increased scale

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

Application regularly lags ‘invention’ by many years

But we are slow to apply innovations

8

9

10

15

45

Jameson flotation cell, 1987

Fine grind IsaMills, 1994

Flotation, 1905

Large scale open stoping, 1960s

High pressure grinding rolls, 1972

Nominal industry innovation adoption time in year

Australian development

30 Bulk explosives &

mechanised mining, 1950s

Still progressing

36 Digital process control, 1980s Still progressing

Sources: University of Queensland Professors Napier-Munn, McKee, Johnson, Knights, Chitombo

5

Rising to the challenge: Productivity & grades in decline

5

Total Factor Productivity (MPI)

-3.5% p.a.

-2.7% p.a.

Average grade

estimate

Global mine productivity (Calculated)

-6.2% p.a.

2004 to 2013 index CAGR

Source: McKinsey Basic Materials Institute (BMI Mining Model)

Processing innovations tackling declining grade

6

Levers

Selective

processing

2 Modern

process control

1

Telfer 20%

throughput

CASE STUDY Selective

processing

at Telfer

27%

Rising to the challenge: Increasing equipment utilisation

7

Paper

mill

Oil

refining

Open pit

mining

Underground

mining

Oil and

Gas

Crushing

& grinding

Average Overall Equipment Efficiency (OEE)

39%

69%

85% 88% 92%

Source: McKinsey research and analytics

Mining companies use just a fraction of their data

<1%

Execution

Source: McKinsey Basic Materials Practice

Data

management

Data

capture

Analytics &

Automation

Visualisation

Infrastructure

Data not

captured

Data not

streamed

or stored

Data not

accessible

Data not

communicated

Data not used

in decision

making

Operational

information

Data not

analyzed

Failure

points

Open collaboration on big data delivering results

9

This slide is not complete, so don’t

worry about it, but I want the icon to

‘emphasise’ the experimental,

collaborative and the fast adoption

(and have ‘transformative vision’ as

a secondary focus only).

SAG mill surge events

July 2016 Dec 2016 Hackathon

Insights deliver

improved

performance

CASE STUDY Unearthed

Hackathons

-500

0

500

1000

1500

2000

1900 1920 1940 1960 1980 2000 2020

Dep

th (

me

tre

s)

Copper

Nickel

Zinc/Lead

10

Rising to the challenge: More new mines will be deeper

Base metal deposits found in the world between 1900-2013

We are progressively exploring under deeper cover

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

11

Cadia

CASE STUDY Bulk underground

mining at Cadia East

The age of the innovators

12

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.