NEW HORIZONS IN BLASTING

THE INNOVATION IMPERATIVE

11th International Symposium on Rock Fragmentation by Blasting
24-26 August 2015
Nick Bowen
Executive Global Head, Mining Services
DISCLAIMER
Forward Looking Statements

This presentation has been prepared by Orica Limited. The information contained in this presentation is for
informational purposes only. The information contained in this presentation is not investment or financial
product advice and is not intended to be used as the basis for making an investment decision. This
presentation has been prepared without taking into account the investment objectives, financial situation or
particular needs of any particular person.

No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or

correctness of the information, opinions and conclusions contained in this presentation. To the maximum
extent permitted by law, none of Orica Limited, its directors, employees or agents, nor any other person
accepts any liability, including, without limitation, any liability arising out of fault or negligence, for any loss
arising from the use of the information contained in this presentation. In particular, no representation or
warranty, express or implied, is given as to the accuracy, completeness or correctness, likelihood of
achievement or reasonableness of any forecasts, prospects or returns contained in this presentation. Such
forecasts, prospects or returns are by their nature subject to significant uncertainties and contingencies.

Before making an investment decision, you should consider, with or without the assistance of a financial
adviser, whether an investment is appropriate in light of your particular investment needs, objectives and
financial circumstances. Past performance is no guarantee of future performance.

Acknowledgements

This presentation draws from a number of industry publications, research papers and reports.
Acknowledgements are listed on the final page of this presentation.

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COMMODITY PRICE VOLATILITY
USD terms
RBA Index of Resource Commodity Prices
AUD & USD terms, 2013-14 average = 100 USD terms
160 160

140 140

120 120

100 100

80 80

60 60
AUD terms
40 40
USD terms
20 20
Source: RBA
0 0
Jan-1983 Jan-1988 Jan-1993 Jan-1998 Jan-2003 Jan-2008 Jan-2013

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HEADLINES OF A CHALLENGING TIME

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SAFETY AND LICENCE TO OPERATE MUST
BE OUR NUMBER ONE PRIORITY
Manufacturing and supply optimisation
and risk management

Mine safety

Management of blast outcomes

Vibration, airblast and dust
Fume risk reduction
Nitrates in ground water

Local community engagement to

strengthen social licence to operate
and meet expectations on
environmental impact

Energy and water consumption

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IMPROVING PRODUCTIVITY AND
REDUCING TOTAL COST OF MINING
Multi year cost reductions delivered and
ongoing include:
Deferred capital projects
Divestments of non core assets
Headcount reductions
Operational efficiencies
Supply chain inputs
Mine planning changes

Assisted by macro drivers:

Exchange rate movements
Fall in crude oil prices

Initiatives ongoing, but have we truly

enabled blasting to drive long term
sustainable value through the value chain?

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VOLUMES UP AND PRICE DOWN THE
CRITICAL PRODUCTIVITY CHALLENGE
Australian Iron Ore Exports
70 $210
volume Iron Ore Price (AUD$/t)
60 $180

50 $150

40 $120
Millions

30 $90

20 $60

10 $30

0 $0
Jan-10 Jun-10 Nov-10 Apr-11 Sep-11 Feb-12 Jul-12 Dec-12 May-13 Oct-13 Mar-14 Aug-14 Jan-15 Jun-15
Source: Bloomberg

Australian Metallurgical Coal Exports

18 $450
volume Aus Hard Coking Coal (A$/t)
16 $400
14 $350
12 $300
10 $250
Millions

8 $200
6 $150
4 $100
2 $50
0 $0
Nov-10
Apr-11 Sep-11 Feb-12 Jul-12 Dec-12 May-13 Oct-13 Mar-14 Aug-14 Jan-15 Jun-15 Nov-15
Source: Bloomberg

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 SOLUTIONS APPROACH IS NEEDED TO
TRULY OPTIMISE RESULTS
Understand
Geology &
Objectives
Learn &
Design &
Invest in
R&D Model

Measure & Optimised Bulk

Report Blasting Energy
Outcomes Solutions Selection

Value unlocked for the mining industry

Load &
Fire
Drill QC to REDUCED COST
Design
Quality IMPROVED PRODUCTIVITY
Initiation ENHANCED LTO
Timing
Control

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ORICAS COLLABORATION IN
TECHNOLOGY DEVELOPMENT
Customer led innovation

Multiple fields of ongoing R&D:

Emerging Technology
Product Extensions & Support
Incremental Product & Process
Development
Advanced Mining Applications
Explosive Hazards Research
Manufacturing & Delivery Systems

Collaborative partnerships globally

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OPPORTUNITY TO UTILISE THE
EFFICIENCY OF CHEMICAL ENERGY
Hard Rock Mining & Processing Costs
5%
5%

Mill
23%
Load & Haul
Grade Control
Drill & Blast
67%

Energy Consumption
10% 2%

Mill
Infrastructure
53% Load & Haul
35%
Drill & Blast

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SPEED OF ADOPTING NEW TECHNOLOGY
IS A CHALLENGE IN MINING
Barriers to Innovation:

Source: AustMine National Australian METS Survey released July 2015

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DATA AND AUTOMATION: STRATEGIC
PRIORITIES FOR OUR INDUSTRY
Data capture and analysis to enable
performance improvement
Design & modelling
Blast execution
Measurement & analysis
Reporting & improvement

Integration with customer information

drives systemic change
Mining equipment productivity
Mill productivity

Automation (both partial and full) offers

advantages in safety and productivity

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SUMMARY: IMPORTANCE OF INNOVATION
AND COLLABORATION
After the boom - this is our new normal

Mining fundamentals remain constant and

with challenge we also have opportunity

Safety & LTO must remain our first priority

Blasting must innovate to deliver long term

sustainable changes in productivity
throughout the value chain

A solutions approach is enhanced when all

inputs are managed in one system

Collaborative partnerships and knowledge

sharing will inspire new innovation

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ACKNOWLEDGEMENTS

AustMine AustMine National METS Survey (2015)

Bloomberg Average weekly commodity price indexes

CEEC http://www.ceecthefuture.org/why-smart-companies-are-focusing-on-comminution/

CSIRO The Future of Mining in Chile (2014)

Deloitte Tracking the Trends 2014 The top 10 issues mining companies will face in the coming year

EY Productivity in Mining Now comes the hard part (2014)

PWC Mine 2015 The Glovers are Off - A review of global trends in the mining industry (2015)

The effect of the Mining Boom on the Australian Economy, RBA Research Discussion Paper
Reserve Bank of Australia
(2014)

Wood Mackenzie Global Copper Long Term Outlook Q2 2015

World Bank World Bank GDP Data: http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG

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