Agenda. Slurry Pipelines. October

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2 Agenda Introduction to slurry pipelines Status of Slurry pipelines in India Economics and cost savings Advances in technology Ausenco Leader in Slurry Pipeline Design The History of slurry pipelines October

3 Ausenco is the world leader in long-distance slurry pipeline system design Introduction to Slurry Pipelines October

4 A critical link in the chain Mining Washing/Grinding Slurry Pipeline Transportation Filtration Pelletization October

5 Transport options Truck low tonnage, long distances Conveyor low tonnage, short to medium distances Rail medium/high tonnage, long distances, infrastructure exists Pipeline medium/high tonnage, long distances, limited infrastructure October

6 Advantages of slurry pipeline transport Cost-effective Lower Net Present Cost (NPC) Higher capital costs, lower operating costs Lower risk of cost escalation Environmental impact minimized Buried pipelines (invisible and silent) Reduced carbon footprint No dust, noise Risk, reliability and safety Higher availability (+98%) Fewer impacts from weather, traffic, strikes, social unrest Incident rate is consistently 90% lower than other transport methods October

7 Status of Slurry Pipelines in India October

8 India s 300 million ton Crude Steel Target The target The Indian government has set a target to increase India s steel output to 300 million tons per year by The challenges The proposed projected growth of steel industry would impart tremendous pressure on railways. Poor quality of roads, inadequate network and low road density remain are a limitation. Ore resources in India are located in environmentally fragile zones. The solution is slurry pipelines! The Indian steel ministry has been emphasizing on development and usage of slurry pipelines for iron ore transportation. October

9 Indian Operating pipelines in India Essar s Kirandul (2006) BRPL s Tanto Jajpur Pipeline (2013) Essar s Dabuna-Paradeep Pipeline (2014) Planned pipelines (Basic Engineering Complete) NMDC s Bacheli - Nagarnar Pipeline JSPL s Barbil Angul Pipeline JSW s Joda Paradip Pipeline Potential Pipelines Many more pipelines are at earlier planning stages. Steel 360 Magazine Dec 16 Issue October

10 Special Conditions for Success There currently exist in India special conditions that will increase the success of slurry pipelines: Railroads are owned by the government, already at capacity, and possibly support pipeline construction ROW permitting streamlined by routing along national highways single permitting agency is pipeline-friendly government A deduction of 100% is available for capital expenditure (other than expenditure incurred on the acquisition of land, goodwill or financial instruments) incurred by specific businesses including laying and operating a slurry pipeline for the transportation of iron ore (Source: Steel 360 Magazine Dec 16 Issue) October

11 The Economic Case for Slurry Pipelines October

12 Iron pipeline - CAPEX 10 Mt/y 100 km, 18 inch Facilities Cost (INR) Pump Station Slurry Tank Foundations 15,40,00,000 Slurry Tanks 33,80,00,000 Slurry Agitators 18,20,00,000 Pump Station Building and Foundation 21,18,00,000 Pump Station Piping 21,18,00,000 Slurry Charge Pumps 1,95,00,000 PD Slurry Pumps 84,70,00,000 SCADA 9,75,00,000 Spare Parts 4,19,00,000 Pipeline Telecom 5,54,00,000 Slurry Pipeline Construction 56,39,00,000 Slurry Pipeline Materials 88,63,00,000 Choke Station Piping 16,94,00,000 EPCM 20,00,00,000 Commissioning 2,93,00,000 Total 400,78,00,000 October

13 Iron pipeline OPEX 10 Mt/y 100 km, 18 inch Item Value Power Mainline Pumps 6300 kw Slurry Agitators 224 kw Other Loads 652 kw Total Operating Power 7176 kw Annual kwh kwh Operating Costs Power 28,41,38,000 Labor 65,00,000 Power costs were estimated at 5 INR/kWh Total 29,06,38, per t 0.29 per t per km October

14 Indian Rail Tariffs (Rupee per ton per km) Slurry pipeline operation 0.29 /t/km Slurry pipeline operating cost is only 1 5 the cost of rail transportation! Rail costs increase by an average of +9% every year from 2006 to October

15 Pipeline ROI (Return on Investment) October

16 The Effects of Inflation Effects shown for 3% annual escalation. (Only 20% of pipeline OPEX is impacted by escalation.) October

17 Economy of Scale Estimates based on a 500 km coal pipeline. October

18 Advances in Technology October

19 Pipeline Advisor and Leak Detection Pipeline Visualization Batch Tracking Pipeline inventory Arrival alarms Production history logging Pig tracking Leak Detection Pressure wave Volume balance Remote data analysis Cloud-based monitoring Pipeline historical data retention Expert System employing IEC (standard for PLC programming) and IEC (function block programming) for ease of rule creation and editing October

20 Pipeline Advisor and Leak Detection Pipeline Hydraulic Profile 3D pressure difference visualization October

21 Fiberoptic Pipeline Monitoring Pipeline Integrity Monitoring Based on Sound and Vibration Leaks Digging Traffic Soil Disturbance October

22 Aerial Pipeline Surveillance Periodic aerial inspections can detect Leaks Soil erosion or shifting Exposed pipe Encroachments Missing or damaged signs & markers October

23 UAV or Drone (Unmanned Aerial Vehicle) Lower capital and operating cost compared to traditional aerial inspection Low altitude and low speed for a close look Increased operator safety October

24 Erosion Sensor Pipe Wear Monitoring On-demand Extend Pipe Life Reduce Process Risk Proactive Schedule and Maintenance 0.1mm Resolution Various Pipe Materials Carbon Steel Alloy Clad Pipe HDPE* Stainless Steel -40ºC to 85º C October

25 Pipeline Integrity Offering Integrate CP & Erosion Sensors every 1-2km along the pipeline with SCADA & Pipeline Advisor. Use Solar and Radio Mesh network IoT devices to report back to a Radio Gateway. October

26 Ausenco is the in long-distance slurry pipeline system design Ausenco October

27 Ausenco has been involved in the study, design, and implementation of 80% of all long-distance slurry pipelines installed worldwide 35% 20% 45% Ausenco Involvement Others October

28 A reputation for taking on new challenges World s longest and largest tonnage iron concentrate pipeline in the world Minas-Rio One of the longest pipelines in China with the highest operating pressure of any slurry pipeline Da Hong Shan iron concentrate One of the world s longest and largest capacity tailings pipelines Minera Los Pelambres copper tailings, Chile India s first long-distance slurry pipeline Essar iron concentrate The largest throughput of any slurry pipeline in China BaoTou iron concentrate The first bauxite ore slurry pipeline in the world MBP, Brazil World s first nickel laterite slurry pipeline Ambatovy, Madagascar The largest tonnage phosphate pipeline in the world OCP, Morocco October

29 Worldwide long-distance iron concentrate slurry pipeline systems Project Name Product Location Tata Noamundi - Jamshedpur Length (km) Diameter (inch) Throughput (Mt/y) Year of Operation Iron Concentrate (Hematite) India Engineering Ausenco JSW Joda - Paradip Iron Concentrate (Hematite) India Engineering Ausenco JSPL Barbil - Angul Iron Concentrate (Hematite) India Engineering Ausenco NMDC Bacheli - Nagarnar Iron Concentrate (Magnetite) India Engineering Ausenco Samarco 3rd Pipeline Iron Concentrate (Hematite) Brazil / Ausenco Minas-Rio Iron Concentrate (Hematite) Brazil / Ausenco By Essar 2nd Pipeline Dabuna-Paradeep Iron Concentrate (Hematite) India Ausenco BRPL Tanto-Jajpur Iron Concentrate (Hematite) India Ausenco CP Mining Iron Concentrate (Magnetite) Australia Ausenco Pan Zhi Hua Baima (PZH) Iron Concentrate (Magnetite) China Ausenco October

30 Worldwide long-distance iron concentrate slurry pipeline systems Project Name Product Location Da Hong Shan 1 st Expansion Bao Tou Mineracoes Brasileiras Reunidas (MBR) Samarco 2 nd Pipeline Length (km) Diameter (inch) Throughput (Mt/y) Year of Operation Iron Concentrate (Magnetite) China Ausenco Iron Concentrate (Magnetite) China Ausenco Iron Concentrate (Hematite) Brazil Ausenco Iron Concentrate (Hematite) Brazil / Ausenco Da Hong Shan Iron Concentrate (Magnetite) China Ausenco By Campania Minera Pacifico (CMP) One Steel Whyalla Iron Concentrate (Magnetite) Chile Others Iron Concentrate (Hematite) Papua New Guinea Others Essar Iron Concentrate (Hematite) India / Ausenco Jian Shan Iron Concentrate (Magnetite) China Ausenco Samarco Iron Concentrate (Hematite) Brazil Ausenco October

31 Worldwide long-distance iron concentrate slurry pipeline systems Project Name Product Location New Zealand Steel La Perla-Hercules Iron Concentrate (Iron Sands-Magnetite) Iron Concentrate (Hematite & Magnetite) Length (km) Diameter (inch) Throughput (Mt/y) Year of Operation New Zealand Involvement Mexico 85/295 8/ Ausenco Kudremukh Iron Concentrate (Magnetite) India Involvement Samarco Iron Concentrate (Hematite) Brazil Involvement Las Truchas Iron Concentrate (Magnetite) Mexico Involvement Sierra Grande Iron Concentrate (Magnetite) Argentina Involvement Chongin Iron Concentrate (Magnetite) North Korea Others Peña Colorada Iron Concentrate (Magnetite) Mexico 48 8/ Involvement Savage River Iron Concentrate (Magnetite) Tasmania Involvement By October

32 The History of Slurry Pipelines October

33 The first commercial slurry pipeline In response to high rail tariffs, Consolidation Coal Company launched an extensive effort to develop technology to move coal long distances by pipeline Consolidation Coal Slurry Pipeline Operation in mile, 10-inch diameter steel line 3 pump stations 98% availability Shutdown 6 years later due to radical tariff reduction solution is not in the selection of exotic materials or the design of special equipment, but in the understanding and control of the slurry environment. Ed Wasp October

34 The Savage River Iron Concentrate Pipeline The world s first iron concentrate pipeline is still operating after more than 50 years! Operation in mi, 9 diameter steel pipeline Still operating New equipment selections and maintenance procedures were developed October

35 The Black Mesa Coal Slurry Pipeline Based on the feasibility of the Consolidation Coal Pipeline, a more ambition pipeline was designed, constructed, and operated: the Black Mesa Pipeline Operation in km, 18 /12 diameter steel pipeline 4 pump stations Shut down after more than 35 years of operation In 1995, BM reported a cost of 1.2 cents per ton-km (0.35 INR/t/km). the incremental cost of moving Black Mesa coal from the mine by rail is about 5 cents per ton-km, or nearly 400 percent greater than the current cost of transporting coal [by pipeline] October

36 The bright future and sudden death of coal pipelines A network of coal slurry pipelines were planned based on the technical and economic success of the Black Mesa pipeline The planned ETSI pipeline advanced the technology with pilot plants and design Private railroads illegally denied crossing permits to prevent competition by pipelines ETSI won all lawsuit against the railroads for 65 crossings, but investors abandoned the project as too risky October

37 Slurry pipeline expand to base metals and minerals Iron Copper Zinc Various tailings Nickel Laterite Phosphate Bauxite Kilometers of Long-Distance Constructed Cumulative October

38 Pipe Dreams Do Come True October

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