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| Slide 2
The last ten years have seen some of the greatest ups and downs in the mining industry due to the global economy
2011 showed record profits for the Top 40 mining companies of $133B but market capitalization fell 25%
European debt crisis lingered and the market questioned the long-term growth of developing countries Net profits increased but net profit margins remained steady reflecting a change in cost base. Costs increased 25% on previous year
The industry invested a record $98B in capital projects and plan for $140B in investment for 2012 in an effort to increase supply Structural change seen in mining: higher average commodity prices with higher production costs and lower ore grades - - therefore, increasing gross margins not guaranteed
ABB Confidential - - Internal Use Only
The mining industry is considered an indicator of the global economy and as a result, mining stocks have been volatile. Mining stocks are more volatile than the general market but uncertainties of the global economic has added uncertainty 2011 financial results for Top 40
Miners must balance pressure to expand supply requiring development of new projects, and investors demanding capital discipline to increase shareholder returns Mining companies also required to develop resources sustainably
ABB Confidential - - Internal Use Only
Primary gold companies represent the single largest commodity group at 21% (up from 16% 2010) include Barrick Gold, Newmont, Randgold and Kinross)
Source: PWC Mine 2012: The growing disconnect
ABB Group 1/14/2013 | Slide 5
Mexico
S Africa Mexico Canada China/HK Canada Russia India
Source: PriceWaterhouseCooper Mine 2012: The growing disconnect. Country refers to primary listing site.
ABB Group 1/14/2013 | Slide 6
*Group Accounts
PWC submits that though demand has been the headline story over the last five years, the main story for the next will be supply. Issues facing supply include
Structural changes to cost bases caused by decreasing grades and increasing input costs Changes in fiscal structures (government) and resource nationalism
Disruption to production
Remoteness of mining locations and increasing capital expenditure required to bring supply to market
The industry has struggled to bring new mines online on time and in budget. Remote locations lack infrastructure to support mining activities and miners
Capital investment and time required to bring projects online is immense, especially for iron ore and coal
ABB Confidential - - Internal Use Only
Mines are remote hard to get to locations Large capital investment required for mining equipment, personnel, infrastructure.
Mining sites are like their own cities requiring power, remote facilities, water treatment, transportation (rail, etc.) to ports or utility sites
Cost inflation is higher (cost of doing business) cost of equipment, electricity to labor demands. Taxes & royalties to hauling truck tires Fiscal governmental policy changing increased unpredictability, associated costs, volume Commodity price volatility greater than ever driven my market uncertainty
Ernst & Youngs global mining and metals division recently published a report stating the top business risks in mining for 2012
1. 2. 3. 4. 5. 6. 7.
8.
9. 10.
Cost management
Interruptions to supply Fraud and corruption
ABB Confidential - - Internal Use Only
| Slide 10
Revenues by commodity Iron ore, coal and copper are 57% of Top 40 revenue
Top 40 posted revenues of $700B for 2011. Iron ore increased the most. Aluminium revenues the only to decrease.
Traditional markets are those with bulk of operations in Australia, Canada, S. Africa or USA.
Venezuela
Mauritania Other countries
14
11 48
16
11 50
4,000
1,100 12,000
*Million tons
Coal Statistics 2011 - coal provides 29.6% of global primary energy needs and generates 42% of the world's electricity
Top Hard Coal Producers (2010e) Top Brown Coal Producers (2010e) PR China USA India 3162Mt 932Mt 538Mt Germany Indonesia 169Mt 163Mt
Russia
Turkey Australia USA
76Mt
69Mt 67Mt 65Mt
Australia
South Africa Russia Indonesia
353Mt
255Mt 248Mt 173Mt
Greece
Poland Czech Republic Serbia
56Mt
56Mt 44Mt 37Mt
Kazakhstan
Poland Colombia
105Mt
77Mt 74Mt
Country
Chile
5420
Peru
China USA
1250
1190 1110
1220
1190 1120
90,000
30,000 35,000
Australia
Zambia Russia Indonesia Canada Congo (Kinshasa) Poland Mexico Kazakhstan Other countries
870
690 703 872 525 343 425 260 380 1900
1120
715 710 625 550 440 425 365 360 2000
86,000
20,000 30,000 28,000 7,000 20,000 26,000 38,000 7,000 80,000
*Million tons
Chinese 2011 production grew 11.4% from 2010 Total gold output at 2789 tonnes, a 5.7% increase from 2010 production of 2638 tonnes
Country China Australia USA South Africa Russia Peru Ghana Canada Indonesia Mexico 2011 Production (tonnes) 380 272 243 221 205 156 102 101 97 82 2010 Production (tonnes) 341 260 236 209 197 163 92 91 128 72
Mining process
| Slide 17
Minerals Processing
(Leaching, electro winning)
Ore Preparation
(Screening, classification, pelletizing Ore Concentration (beneficiation, blending, concentration, agglomerating)
ABB Group 1/14/2013 | Slide 18
Mining development
Exploration or prospecting discovery of ore body Development create access to ore body, power, accommodations, processing plants, equipment obtained. Mine the mineral Reclamation Once ore cannot be produced profitability, process to make land used by mine suitable for future use
| Slide 19
Open pit (cast) surface mining Underground or sub-surface mining Gravity-dependent methods of separation such as panning, hydraulicking or sluice boxes
Crushing or pulverizing such as for iron ore valuable mineral extracted aster crushing by mechanical and chemical techniques
Leaching is a less common method that may be used for target minerals that are soluble, eg., potash, potassium chloride, sodium chloride, sodium sulfate and uranium oxide which dissolve in water. No digging in process.
| Slide 20
Objective is to extract ore of a predetermined grade or higher, leave behind as much lower grade ore and barren rock Open pit (cast) surface mining
Dragline removing mountain top or in pit Dozer along contour Auger mining Strip mining (example: over bridge with bucket wheel excavator to remove overburden then extract coal)
Overburden is removed, blasting may be required to break up the rocks or excavating with digging / scraping machinery
ABB Confidential - - Internal Use Only
| Slide 21
Sub-surface or underground mining in slopes or rooms, materials left to support the ceiling is called a pillar and may be recovered and used later
Shaft mine (hoist) Slope mine Drift mine Long walling (coal)
Less disruption to surface (unless cave in due to vacant materials) More expensive Mine drainage water can require significant costs
| Slide 22
Mining methods
Heavy equipments such as draglines, shovers, bucketwheel excavators, trucks, large drills, cranes, conveyors, etc. used to remove materials. Sometimes minerals have to be broken up via blasting. Materials are sometimes processed or crushed before transporting via truck or conveyor.
ABB Group 1/14/2013 | Slide 23
Mining steps
Mining wastes
Large quantity of rock and water wastes generated by extraction operations Another waste is overburden generated by surface mines
| Slide 24
Exploration and development to remove and stockpile overburden Breaking and removing rocks of various hardness (blasting) Processing the ore Reclamation efforts after the mine is closed Example equipment
Draglines Shovels Bulldozers Front-end loaders Bucket wheel excavators Drills Cranes Conveyors Hoists Blasting equipment Trucks (diesel or electric)
| Slide 25
ABB Group
Following the initial mining step, often content of valuable mineral in mining ore is too low to allow for efficient processing. Therefore the ore must be beneficiated.
Goal is to ship highest quality A concentrator is the factory to beneficiate the ore
Comminution is the function of crushing or grinding the ore to physically liberate the target mineral. Concentration is separation of mineral values Milling consists of several steps. Concentrator normally located next to mine to minimize shipping costs. Milling steps for beneficiation start with
Screening
Primary crushing Secondary crushing
ABB Confidential - - Internal Use Only
| Slide 26
Grinding usually two stages (water added at SAG / ball mill) Separation Flotation (often primary and secondary steps) Thickener, tailings pond and waste water treatment plant Electrolytic filtration Drying Concentrate shipping
| Slide 27
After materials go through primary and secondary crushing, grinding is the next operation
Dry grinding prevails where materials will react with water (cement, iron ores)
| Slide 28
Balls forged from steel Cast balls, cylinders (cylpebs), truncated cones Steel rods (63 to 115 mm in diameter, up to 6 meters in length) Ball mills range from 25-100 mm in diameter SAG mills from 100 150 mm Tower, verti and stirred mills are 15-30 mm
Grinding balls
Grinding liners are custom made from high chromium white cast irons. Wear resistant but brittle (crack). Multiple segments for a complete set.
ABB Confidential - - Internal Use Only
| Slide 29
Tumbling mills have horizontal cylindrical shell with changeable inner liners. The cylinder rotates on trunnions are either end. Incoming materials continuously fed through one trunnion while the ground materials leave via the other trunnion or ports around the shell. Course fraction is returned to the mill this is called re-circulating load and can be up to 3 times
AG mill
Hardinge mill
Tube mill
ABB Group 1/14/2013
| Slide 30
Thickener
Tailings Pond
| Slide 31
Some ores can be extracted via a technique called leaching (example: bauxite (source of aluminum). The process includes
Primary crushing Secondary crushing Agglomeration curing Leaching by acid or alkaline solution to leach solution Solvent extraction Electro winning Electro refining Leachate regeneration Product to market
ABB Confidential - - Internal Use Only
| Slide 32
Leached Solution
Leaching
Product to Market
Primary Crushing
| Slide 33
Ore preparation
Ore preparation / dressing
(Screening, classification, pelletizing)
To market
| Slide 34
Coal is a soft rock found in large seams either just below the surface or at deeper sites
Coal breaker
Underground coal mine coal extracted through tunnels and shafts. Coal is broken into a size that is easily moved and stored
Long wall mining is a technique where about 200m of the coal face is mined at one time via a Anderton shearer that claws coal from the face and loads it into a conveyor After mining, processing is not as extensive as other mineral processing. Coal separated from rock using specific gravity and size and sometimes ground
Coal washing
| Slide 35
Processing
(breaker, washing, drying)
| Slide 36
Pyro-metallurgy (smelting, refining, roasting): The next step is usually smelting which liberates metals form the concentrate - which means it happens above the melting point of the concentrate.
For oxide concentrates like iron ore, a carbon is added and the product is molten metal and slag. Sulfide oxides are also smelted, but an oxidant (air) is blown in to liberate copper, zinc lead and similar metals The molten metal is impure and at least another smelting process follows for further refining. Metals is then cast into billets, blooms, slabs, or other shapes.
| Slide 37
Energy efficiency
| Slide 38
Mining industry uses 3% of industry energy in the U.S. making it # 6 in primary energy use, fuel and electricity use and onsite losses**
South Africas Department of Minerals and Energy (DME) estimates the mining industry uses 6% of all energy consumed in South Africa Vale, mining giant in Brazil, is the single largest energy consumer accounting for around 4% of all energy used
In the U.S., it is calculated that the mining industry uses 3% of industry energy.
Energy cost is estimated to represent more than 15% of the total cost of production (USA) - yet still minimal focus on energy efficiency
Source: *Cleantech magazine Fuel Cell Special, Sept/Oct 2010. **Energy Use and Loss Analysis, U.S. Manufacturing and Mining April 2004
| Slide 39
According to the U.S. EPA, 400 mines operate 8,300 diesel powered vehicles creating greenhouse gas emissions and exposure to particulate matter.
The industry is working to address sustainability issues such as carbon emissions, finite availability of resources, water quality Mines working on low emissions technology either directly or through funding research
Advanced management techniques and technologies are increasing productivity to permit exploration, extraction and processing to occur with minimal environmental impact
Mines considering power generation for their own mine distribution and use of renewables
Though energy is estimated at about 15% of cost of production (USA number, Cleantech magazine Fuel Cell Special, Sept/Oct 2010), little attention spent on EE Increase on EE due to global recession and decline in commodity prices or in regions where there is a shortage of energy (example: Mines in northern Chile have reduced power use to avoid introduction of rationing). Regulatory pressure is a stronger driver to mining companies to take action Governments, especially in countries with large mining sectors, are imposing standards for EE
Australias miners obliged to comply with the Equipment Energy Efficiency (E3) program for EE.
S Africa, The DME set a target in 2007 for mining industry to reduce energy demand by 15% by 2015. 32 S African mining and industrial companies have signed up on a voluntary basis
Reduce cost of production energy efficiency is a lowcost opportunity to enhance profits Reduce carbon emissions thereby supporting environmental concerns Improve productivity and availability as a byproduct of actions Maintain competitive position
| Slide 42
Exploration
Blasting
Drilling
Extraction Extraction
Digging
Ventilation Dewatering
Diesel
Materials Handling
Electric
Finished Product
ABB Confidential - - Internal Use Only
Type of energy used at a mine site will depend on the mine type (surface or underground) and processes used The exhibit shows energy used in mining industry for coal, metals (iron, lead, gold, zinc, copper) and minerals (phosphate, stone, sand, etc.) (U.S. example) Each mined product has a different recovery ratio which can significantly impact energy required per ton of product
Diesel 34%
Source: U.S. DOE Industrial Technologies Program Mining Industry Energy Bandwidth Study, 2007
Separations 4%
Blasting 2%
Digging 6%
% Crushing 4%
ABB Group 1/14/2013 | Slide 45
Source: U.S. DOE Industrial Technologies Program Mining Industry Energy Bandwidth Study, 2007
Mining and energy efficiency Energy loss profile - motors represent 29% of onsite losses
Losses occur in equipment and distribution systems that are converting energy into work or supplying energy to process operations
42% of the energy that enters the plant is lost prior to use in processes 62% of energy lost in energy conversion systems
Source: U.S. DOE, Energy Use and Loss Analysis April 2004
ABB Group 1/14/2013 | Slide 46
Mining and energy efficiency Mining industry motor system loss profile
Almost 50% of the energy input for motor driven systems is lost through subcomponent inefficiency Materials processing systems can have inefficiencies as high as 90% Pump systems inefficiencies are considerable at 40% Highest motor system losses occur during energy conversion Fuel mix for motor systems is 82% electricity and 18% fuel
Losses ~40%
Source: U.S. DOE, Energy Use and Loss Analysis April 2004
ABB Group 1/14/2013 | Slide 47
Grinding and diesel equipment for materials handling offer the greatest savings potential of 37%
Savings achieved by implementing best practices and new advances in R&D Incentives to innovate upstream becomes greater as processing plant becomes more tuned. Quality of feed becomes more important to meet productivity, emissions and quality targets
The study reports energy savings independent of each other. Improving savings in one area could increase savings in another. Study based on average energy use for a process, energy use by above average EE mines,
Source: U.S. DOE Industrial Technologies Program Mining Industry Energy Bandwidth Study, 2007
ABB Group 1/14/2013 | Slide 48
U.S. mining industry (excluding O&G) consumes ~ 1,246 Trillion Btu/year (TBtu/yr) DOE bandwidth analysis estimates that investments in state-of-the-art equipment and best practices could reduce energy use by over 50% TBtu/yr 258 TBtu/yr by implementing best practices Additional 409 TBtu/yr from R&D to improve mining technologies
~20%
CO2 emission reduction achievable from total practical energy savings estimated at 40.6 million tonnes
Study based on 8 commodities mined by the U.S. Coal Potash. soda ash & borate Iron Copper Lead & zinc Gold & silver Phosphate rock Limestone These commodities used to define average Btu/ton for coal, metals & industrial minerals.
Source: U.S. DOE Industrial Technologies Program Mining Industry Energy Bandwidth Study, 2007
ABB Group 1/14/2013 | Slide 49
Mining operations are typically remote and some processes are highly energy intensive. Rock crushing, drilling and grinding require considerable mechanical forces and subsequently large amounts of energy. Energy use increases as ore grade declines It is estimated that approximately 90% of the electricity for mining is used by motor driven systems such as fans, compressed air and pumps (Xenergy, 1998). A large portion of this is to drive fans for mine ventilation (Xenergy, 1997) Energy efficiency measure can also lead to non-energy benefits such as better equipment reliability, longer equipment life, reduction in maintenance costs and downtime and improved work environments (mine ventilation, lighting, etc.)
ABB Confidential - - Internal Use Only
Source: Energy Use, Loss and Opportunities Analysis: U.S. Manufacuturing and Mining
ABB Group 1/14/2013 | Slide 50
Non-invasive technologies such as remotely-operated sensors and ground-based technologies to minimize exploratory digging and drilling*
Advanced techniques for characterizing mineral content at exploration site* (reduce waste transport) Efficiency of separation or liberation at the mine face reduces waste
| Slide 51
Source: Multiple. *Energy Efficiency Guide for Colorado Businesses. **Energy & Sustainable Development in Mining and Minerals Industries Jan 2001). ABB Energy Consultancy studies. ABB Confidential - - Internal Use Only
Reduce handling of materials. Every movement of materials adds costs - reduce waste transported to processing facilities, investigate stockpile management Consider alternative materials handling solutions such as conveyor systems versus truck haulage where feasible may use less energy Large number of motors and pumps are used in excavation process (drilling, excavation and ventilation)*
Correctly size motors and pumps Select premium-efficiency units Employee variable speed drives in applications with highly varying load requirements and gearless drive systems (gearless mill drives; AC for shovels, drag lines, bucket wheel excavators, conveyors, hoists, etc.)
ABB Confidential - - Internal Use Only
Source: Multiple. *Energy Efficiency Guide for Colorado Businesses. Colorado Governor's Energy Office. ABB Energy Consultancy studies
ABB Group 1/14/2013 | Slide 52
Systems approach to mine ventilation that takes into account parameters from the point power enters the motor to required function. Ventilation system automation to constantly analyze requirements with smart sensors to determine air quality and adjusts flow (power supply, flow control devices, ducks, sensors / meters, high-efficiency motors and fans, variable speed drives). Additional benefit of improved power factor and reduce penalties. For cooling, consider moving air via insulated pipes and pumps to fan/coil heat exchanges located in the mine itself versus moving cool air from the surface to the underground mine via fans and ducts. The closed loop used to pipe chilled water takes advantage of gravity to move water into and out of the mine.*
Source:. *Energy Efficiency Guide for Colorado Businesses. Colorado Governor's Energy Office. Increasing Energy Efficiency of Mine Ventilation Systems. multiple authors, Lawrence Berkeley National Laboratory, ABB Energy Consultancy studies
| Slide 53
Refueling underground versus bringing trucks up top Use drives with regenerative capability when braking or downhill operation (hoisting, conveyors) Use spinning battery reserve on hoists reduce diesel operation required when reducing peak load of system*
| Slide 54
Large numbers of motors are used for moving and handling ore and other materials. Energy can be saved through
Alternative materials handling systems including electric solutions versus diesel trucks / front-end loaders (conveyors, electric trucks)
Automated controls for optimizing materials handling adjustable conveyor speeds to ensure consistent optimum hauling loads (VSDs required) Remote control of automated hauling cycles employing sensors to identify fill, quality, etc. Optimization of start up process for conveyors
ABB Confidential - - Internal Use Only
Source: Multiple. *Energy Efficiency Guide for Colorado Businesses. Colorado Governor's Energy Office. ABB Energy Consultancy studies
| Slide 55
Stockpile management reconfiguration of stockpile patterns / storage arrangement can reduce energy use. Consider loading areas and minimize re-piling
Use drives with regenerative capability when braking or downhill operation (hoisting, conveyors)
Optimize all loads. Reduce unloaded or wasteful fixed loads. Always fill to optimum capacity
Adjust conveyor speeds to optimize loading and unloading (w/ or w/o VSDs) Evaluate equipment used to load and unload perhaps mobile conveyor more cost effective to front-end loader Idle equipment when not in use
Improve road conditions consider road traffic design Source: Multiple. *Energy Efficiency Guide for Colorado Businesses. Colorado Governor's Energy Office. ABB Energy Consultancy studies
| Slide 56
Large numbers of motors, pumps and blowers are used for moving, crushing, handling, fans and dewatering ore and other materials. Energy can be saved through*
Proper sizing and maintenance of motor systems Use of premium-efficiency motors Variable speed drives for applications with varying load requirements
Improved techniques for characterizing ore Preparation and processing proximity to mining (reduced materials transport energy use)
Consider gearless drive (ring-motor) for grinding with VSD where ore is various hardness allowing mill to slow when soft ore encountered**
ABB Confidential - - Internal Use Only
Preparation and beneficiation & processing (smelting, refining and coal preparation) smelting and refining not discussed
Source: Multiple. *Energy Efficiency Guide for Colorado Businesses. Colorado Governor's Energy Office, ABB Energy Consultancy studies
| Slide 57
Remove scats (non-spherical ball fragments) that take energy but dont have enough energy to grind*
Preparation and beneficiation & processing (smelting, refining and coal preparation) smelting and refining not discussed
Source: Multiple. *Mining Registry (Australia Review), **Energy Efficiency Guide for Colorado Businesses. Colorado Governor's Energy Office, ABB Energy Consultancy studies
ABB Group 1/14/2013 | Slide 58
Most mines both consume and produce water. Energy is used to pump the water
Water used in mining for drilling, transportation ( materials slurried near mine and transported through pipeline suspended in water (size reduction facilities)), and processing (grinding, washing, separated via screening or other gravity separation). Water is also used to suppress dust when crushing and on hauling roads, etc.
Often water produced during exploration or operation and must be removed to prevent flooding and may need to be treated before discharge
Coal Mining: Water might be used for cooling the cutting surfaces of mining machinery (coal mining) and to inhibit frictioninduced ignition of coal fines or gas
Significant energy can be used to remove water due not only to amount but it must be lifted to the surface
Sometimes water must be imported or transferred as surplus mine water to treatment or discharge locations
Source: Industrial Water Management: A Systems Approach, CH2M HILL for Center of Waste Reduction Technologies, American Institute of Chemical Engineering, ABB Energy Consultancy
| Slide 59
Right size motors / pumps for water sources Replace motors with more efficient solutions Use VSDs to adjust pressure / flow to meet requirements (turn off when not needed) Other pump optimization measures (buy based on life cycle costs, maintenance programs, intelligent pump systems for multipumps)
Turn off water pumping equipment when idle Physically position machinery required for less distance pumping Consider reducing water to just meet requirements when possible: boiler water for steam generation, heat generation, flotation, to transport ore (coal) where possible
Source: Industrial Water Management: A Systems Approach, CH2M HILL for Center of Waste Reduction Technologies, American Institute of Chemical Engineering, ABB Energy Consultancy
| Slide 60
Evaluate dewatering process to reduce energy needed Recover water when possible (condensate from air heater) Optimize steam use at air heaters Reduce water leakage (maintenance strategy)
Source: Industrial Water Management: A Systems Approach, CH2M HILL for Center of Waste Reduction Technologies, American Institute of Chemical Engineering, ABB Energy Consultancy
| Slide 61
Invest in system to provide information on energy use so behaviors can be modified for efficiency, cost negotiated
Holistic approach: Energy management software for monitoring energy use throughout the plant and visualize reporting in real time
Install meters to provide energy use information identify what will be measured Integrate systems into other systems (EM with MES Manufacturing Execution Systems) Remotely monitor across multiple location to compare use, efficiencies
Reduce lighting costs with new lighting technologies, control systems including timers, sensors to turn off lights when not in use.
ABB Confidential - - Internal Use Only
Source: Mining Registry (Austrialia Review), Mining IQ, ABB Energy Consultancy studies
ABB Group 1/14/2013 | Slide 62
Optimized HVAC systems timers, variable speed drives, efficient fans, high efficiency motors Best practice training change behaviors educate team to look for energy efficiencies.
Procedural changes: example is to turn off light in pit once sufficient natural light. Consider total life cycle cost of energy use versus just initial costs
Source: Mining Registry (Austrialia Review), Mining IQ, ABB Energy Consultancy studies
ABB Group 1/14/2013 | Slide 63
Preventative maintenance practices also improving availability along with saving energy
Example: truck tire pressure management, steam trap maintenance / leak repairs, conveyor roller maintenance to reduce friction
Mine site electricity generation - reduce energy associated with use for transmission or transport (of fuels) Tune generic systems
Fired heaters
Boilers steam leaks repaired, steam distribution insulation
ABB Confidential - - Internal Use Only
Source: Mining Registry (Austrialia Review), Mining IQ, ABB Energy Consultancy studies
ABB Group 1/14/2013 | Slide 64
Robotics as automation solutions to improve efficiency, improve productivity and increase safety
Power quality power factor correction to ensure operating within intended performance reduce reactive power use and charges
Second power line to UG mine decreased overall resistance through transmission lines and therefore losses were lower and power plant load reduced Consider using any heat generated by a process to be used for other requirements Consider peak electricity costs reduce loads during periods of high cost Institute an overall motor repair / replacement policy to ensure efficiencies (rewind vs high efficiency)
ABB Confidential - - Internal Use Only
Source: Mining Registry (Austrialia Review), Mining IQ, ABB Energy Consultancy studies
ABB Group 1/14/2013 | Slide 65
Implement an energy program with management and employees responsible for meeting energy goals
Develop a clear energy policy with KPIs and an identified leader and team
Clearly communicate energy policy Adapt techniques used in successful safety improvement programs to raise awareness and importance of energy efficiency Develop a process for bringing forward opportunities for energy savings
| Slide 66
Invest in most efficient technology consider total life cycle costs (VSDs, high-efficiency motors, etc.)
Consider new blasting methods the reduce impact on mineral seam and reduce contamination - waste
Improve process controls, introduce equipment automation Improve hauling efficiencies consider alternative materials transport throughout mine, optimized stockpile management processes, location of process circuits Optimization of auxiliary systems: HVAC, water, lighting Mine automation intelligent software
| Slide 68
ABBs approach to energy efficiency Doing more while lowering costs and emissions
ABB has technologies for the entire energy value chain to squeeze the most value from each unit of energy used
ABB contributes to energy efficiency improvements in two ways: Specialist Equipment, systems & solutions
Technologies
By reducing energy losses, ABB technologies mitigate demand for new power generation, make better use of natural resources, and help make industries more efficient and competitive.
Energy efficiency solutions aligned with mining productivity and profitability objectives
Variable speed drives and premiumefficiency motors systems for underground and open pit mining, ventilation, materials transport, materials crushing and grinding and auxiliary systems ( fans, water pumps, compressors, etc.)
Energy efficiency solutions aligned with mining productivity and profitability objectives
Improving efficiency and reducing costs associated with underground air handling Underground materials transport systems that increases capacity, improves air quality, and reduces energy requirements Enhanced energy efficiency for underground materials handling systems while boosting capacity and productivity
Hoists with regenerative braking and energy storage systems to use energy efficiently and reduce peak impact on network. Services to upgrade to AC drive system
Energy efficiency solutions aligned with mining productivity and profitability objectives
AC drives and premium-efficiency motors, Active Front End to recover braking energy Integrated electrification and automation Optimized conveyor load / Inverse Start Route systems Gearless drive alternative Gearless mill drives Ring-geared mill drives Drives for high-pressure grinding rolls
Energy efficiency solutions aligned with mining productivity and profitability objectives
Increasing availability and efficiency of mining assets such as shovels and drag lines
AC drives for energy efficiency, excellent power quality and better control of current and torque
Integrated process control and automation, drive and electrical systems. Substation automation integration
Solutions that are aligned with your mining processes and energy efficiency objectives
Improve reactive power compensation and power factor correction Lower total cost of ownership and improve efficiency of transformers (large load or low load losses) Energy efficiency enablers
Site assessment services and solutions such as active filters, capacitors for power factor Low loss green distribution transformers
Measurement products, emergency power supply / UPS, gas insulated switchgear, substations Shovel and dragline retrofit services Lifecycle services Engineering services Full Service
Services
Solutions that are aligned with your mining processes and energy efficiency objectives
Related solutions for mining operations
Mines are often remotely located and require infrastructure for power generation and materials transport such as rail. Water is also a limited resource required for multiple mining operations as well as removal or transference ABB offers energy efficiency expertise and products associated with power generation, transportation, water usage and building automation energy efficiencies. Efficient management of water resources used for mining processes or requiring removal or transference On-site power generation Site assessment services including pump system optimization
| Slide 75
Solutions that are aligned with your mining processes and energy efficiency objectives
Related solutions for mining operations
Turbochargers to boost performance of diesel engines to regenerative braking systems and efficient grid to railway power efficiency solutions i-Bus KNX automation systems for monitoring and control of lighting, HVAC, etc.* High-power electrical port connections (turn off ship diesel engines) and coal terminal and general stockpile management
*Not available in the Americas
Energy efficient port / ship power management that reduces air and noise pollution. Coal terminal electrification / automation optimization
| Slide 76
Go-to-market strategy
Target offerings Key messages Target market / audience Obstacles to sales Sales strategy concept
Marketing materials
| Slide 77
Target offerings
Services ABB Energy Solutions to accelerate energy savings including performance-based contracting
1. 2.
Software
3.
| Slide 78
Key messages
Global energy use predicted to increase by 96% by 2035 compared to 2008 levels The IEA estimates that energy efficiency measures can deliver half of the cuts in emission that are needed over the next 25 years
In a 2011 global survey by the Economist Intelligence Unit, almost 90% of manufacturers said that improvements in their energy efficiency will be critical for business success in the next two decades The mining industry faces a number of challenges from higher costs of doing business, fiscal governmental policy becoming increasingly unpredictable, the advent of carbon emission penalties, commodity price volatility, and the struggle to bring new mines online on time and within budget, to increased requirement for infrastructure capital expenditures due to remote location of mines
| Slide 79
Key messages
Energy efficiency
Decreases operational costs Reduces greenhouse gas emissions Improves productivity Makes the mine site more sustainable And - results in improved competitiveness
Improving energy efficiency worldwide is the fastest, the most sustainable and the cheapest way to reduce greenhouse gas emissions and enhance energy security. (Final statement of G-8 summit, Germany, June 2007)
| Slide 80
Key messages
ABB has been in the energy business for over 120 years and pioneered many innovations such as HVDC, variable speed drives and gearless mill drives ABB has the experience and tools for helping customers implement energy efficiency solutions along with the success stories
| Slide 81
Target market
Target market
Mining installations
Top mining countries Key countries with BU Minerals and GAM / SAM coverage
What Who
How
Primary target
As high up as possible CEO, CFO, CTO, Energy Officer Mine manager Mine superintendent or process superintendent Environmental officer Business improvement officer
| Slide 82
Source: Australian Government: Department of Energy and Tourism. Driving EE in the Mining Sector: The Business Case and Beyond
ABB Group 1/14/2013 | Slide 83
Common obstacles to promoting and bringing energy efficiency awareness in mining companies
There are many obstacles to implementing energy efficiency in the mining industry due to historically low energy market prices, focus on rapid expansion of production driven by market demand, and fear that energy efficiency projects are expensive and impact productivity - or that they are often small scale and discretionary in nature
| Slide 84
Common obstacles to promoting and bringing energy efficiency awareness in mining companies
Strong trend toward increasing electricity and diesel fuel prices - which continue to fluctuate. Increased production opportunity in energy efficiency projects along with the substantial impact on operating costs
May not have good information on energy efficiency projects need cost and benefits analysis including financial or operational risks identified. Need to link broader benefits projects must achieve important business priorities
EE projects can be identified through assessments but need skilled support in particular technologies for implementation
Robust financial analysis required along with the right expertise to complete projects ABB Confidential - - Internal Use Only
Source: Patrick Crittenden presenting at Mining IOs Energy Efficiency in Mining 2011 Australia
ABB Group 1/14/2013 | Slide 85
Know the business align energy efficiency business case with core business objectives
What
Link benefits of energy efficiency projects to production benefits, cost containment and maintaining safe working conditions
Understand customer interests so you can promote energy efficiency as helping to achieve their goals
Who How
Understand who makes decisions and target communications on how project supports their role, interest or understanding of the issues
Talk to site financial officer to find out current investment policies. Make sure the financial officer is aware of energy issues and costs and potential price increases in the future
Enlist the business improvement managers by discussion potential energy efficiency projects and relating to productivity and other business improvement priorities
Source: Patrick Crittenden presenting at Mining IOs Energy Efficiency in Mining 2011 Australia
ABB Group 1/14/2013 | Slide 86
Enlist BU Minerals team to expand share of wallet with mining customers and make introductions for EE solutions offered not only in PAMI but other divisions take a systems approach Leverage ABB Energy Solutions HUBS Work with the ABB Energy Solutions (PASV) team to identify opportunities for conducting EE assessments that will pull through other ABB solutions Work with EE Champions in key countries to pull together team to focus on Mining Industry
Employ GAMs, SAMs, BU Minerals to identify targets and introduce team to key accounts
| Slide 87
BU Minerals focused on mining assets (shovels, conveyors, grinding solutions) many other motor / drive auxiliary systems to consider Capability to assess auxiliary systems available in more countries
BU Minerals organization
GAMs
| Slide 88
Marketing materials
Training materials
Mining industry process Mining industry market / trends Mining industry energy efficiency opportunities ABB energy efficiency solutions
| Slide 89
Marketing materials
Presentations
Mining Energy Efficiency Value Proposition ABB Overview (Complete) ABB Overview (Summary) Energy Efficiency Trends
Flyer Summary of Mining Value Proposition (2-pager) Group EE Overview Brochure EE Trends Reference Document Web portal to hold content
| Slide 90
Marketing materials
Print-on-demand pieces
ABB Energy Solutions for the Mining Industry (consultancy) cpmPlus Energy Manager Conveyor Systems (Materials Handling PAMI)
LV Soft Starters
LV Contactors Baldor Cooling Tower Motor & Drive Assessments
ABB Confidential - - Internal Use Only
| Slide 91
Marketing materials
Print-on-demand pieces
Full Service Instrumentation / Measurement Products Power Generation Energy Efficiency Assessments Success stories
Pea Colorado Iron Ore Variable Speed Drives Dragline Retrofit Mine Hoist Grid Reliability Vigier Cement Conveyer
Brochures
| Slide 92
Marketing materials
Key messages Elevator pitch Clip art images Roll up and poster templates
All items available as InDesign file for local translation or a high resolution, print ready PDF
| Slide 93
www.abb.com/energyefficiency
http://inside.abb.com/cawp/db0003db004341/ccbbd25c30a117b3c12578ed005 6a851.aspx?
Mining portal
http://inside.abb.com/cawp/db0003db004341/94ff432377791fc6c12579bb0035 bd30.aspx
Trends report
http://www.abb.com/cawp/gad02465/b9225505ced8f7d7c1257853004a7a00.a spx?
ABB Group 1/14/2013
| Slide 97
Appendix
Mining ranks 6th in primary energy use, fuel and electricity use and onside losses in the U.S.
Direct use of purchased energy. Top six industrial consumers in the U.S. Mining energy use impact varies by country. Comparison numbers are hard to acquire. South Africa mining is estimated to use 25% of the electricity
Mining
Source: U.S. DOE, Energy Use and Loss Analysis April 2004
ABB Group January 14, 2013 | Slide 100
Source: U.S. DOE, Energy Use and Loss Analysis April 2004
ABB Group January 14, 2013 | Slide 101
Source: U.S. DOE, Energy Use and Loss Analysis April 2004
ABB Group January 14, 2013 | Slide 102
Best practice energy use based on various reports of topperforming mining equipment
Theoretical minimum energy minimum energy needed to complete a process in the absence of energy losses to heat, etc.
Practical Minimum Considered closest approach to the theoretical limit allowed by implementing best practices and technologies developed by ongoing R&D. This is a moving target since science and technology continue to improve energy efficiency Factors in electricity generation losses in analysis employed the tacit energy consumption values, i.e., energy used onsite plus the energy lost in generating and distributing the energy instead of onsite consumption. One Btu of electricity onsite requires a total energy use of 3.17 Btu. Conversely, saving 1 Btu translates to saving 3.17 Btu
Source: U.S. DOE Industrial Technologies Program Mining Industry Energy Bandwidth Study, 2007
ABB Group January 14, 2013 | Slide 103
Source: U.S. DOE Industrial Technologies Program Mining Industry Energy Bandwidth Study, 2007
ABB Group January 14, 2013 | Slide 104
Ore processing plant / electro-winning process Iron ore mine Coal mine Performance guarantee Conceptual design analysis
Modernization of coal mine fan station Mine ventilation automation system Modernization of copper mine
Dragline retrofit Conveyor regenerative power Shovel upgrade Optimized bucket wheel excavator Variable speed drives for high pressure grinding rolls (HPGR) Belts Conveyor automation, motors, variable speed drives Integrated electrification and automation of coal plant cpmPlus Energy Manager
Head of global Business Unit Minerals Giuseppe Di Marco Assistant Carla C. Castillo Marketing Communications Marion Hug
North America Gabriel Azeroual Mexico Fernando Cantu Brazil Renato Finoti Peru Adolfo Samaniego
Argentina
Egypt Nour Nassar Saudi Arabia George Kuruvilla Oman Sanjay Jog Kazakhstan Anuar Sakharkhanov South Africa Max Luedtke
India
Amogh Nawathe
China Stephen-JiHao Zhu Thailand Kitti Kangwalklai Vietnam JianPeng Fu Malaysia Mohan-Raj Paranjothy
Baltic States
Leho Kuusk Serbia tba Greece Yannis Happas
Peter Mhlbach
Norway Roger Nilsen
Chile
Gerardo Mendoza
Eduardo Botelho
Jari Koponen
HansHelmuth Jung
Barbara Obrist
Bengt Hedlund
PG MH&G
(Material handling and grinding)
PG ECIS
(Electrical, control & instrumentation systems)
PG UGM
(Underground mining)
Drives
MV motors
LV motors Variable speed drives Multi-drives
Automation
Process control Knowledge Manager Optimization packages Instrumentation
c Infrastructure
Cabling Grounding / Lightning protection Containerized e-room Lighting Ventilation air-condition Communication
Services
Installation Supervision of installation Training of personnel Commissioning Operations assistance Life cycle support
DC power
Emergency power
ABB Group January 14, 2013 | Slide 111
Rectifiers
Power factor correction
MCCs
Application software