The age of the innovators - Newcrest Mining · PDF fileThe age of the innovators. 1 Remote...
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Sandeep Biswas
Managing Director and Chief Executive Officer
Melbourne Mining Club, 9 February 2017
The age of the innovators
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1
Remote
drilling and
charging
Block cave
drawpoint
layout
Water cannon
operated from
inside cab
CASE STUDYFinding a safer way
to conduct secondary
break activities
Innovation on the frontline
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$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)
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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
eIn
no
va
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
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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
30Bulk explosives &
mechanised mining, 1950s
Still progressing
36Digital process control, 1980s Still progressing
Sources: University of Queensland Professors Napier-Munn, McKee, Johnson, Knights, Chitombo
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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)
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Processing innovations tackling declining grade
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Levers
Selective
processing
2Modern
process control
1
Telfer20%
throughput
CASE STUDYSelective
processing
at Telfer
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27%
Rising to the challenge: Increasing equipment utilisation
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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
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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
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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 2016Hackathon
Insights deliver
improved
performance
CASE STUDYUnearthed
Hackathons
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-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
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Innovation key to making deep, low-grade deposits viable
11
Cadia
CASE STUDYBulk underground
mining at Cadia East
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The age of the innovators
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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.