Roberto Darouiche & Miguel Angel Duran. Joint CEOs October

Transcription

1 Roberto Darouiche & Miguel Angel Duran Joint CEOs October

2 Business Strategy: Creating long term value Our Focus Strive for excellence in Sustainable Development Maximize our shareholders returns through our operating performance Maximize the NPV of our business through the execution of value adding projects Continue to improve our C1 cash cost position Leverage our strategic regional position 2

3 Collahuasi Overview 2,600 employees, 2,800 permanent contractors, 4,000 project contractors Consists of two major porphyry copper deposits, Ujina and Rosario Mine life +50 years Ownership: Xstrata Plc (44%) Anglo American Plc (44%) Japan Inc (led by Mitsui & Co) (12%) Facilities include: Open pits at Ujina, Rosario, Capella Accommodation complex Concentrator plant SX-EW plant 200km pipeline to transport concentrate from the mine to port Filter Plant, Molybdenum Plant and Port Loading Facilities 3

4 Process Overview 4

5 Strategic solutions during a difficult year 5

6 2012 a difficult year Safety 3 fatalities and 11 LTIs in H1 Planned temporary Ore Grade drop to 0.77% compared to 1.02% in 2011 Rainfall during the winter was 350% higher than normal, severely impacting productivity at the mine Continued underperformance in mining fleet Concentrator plant performance impacted by multiple unplanned outages including an extended outage in Ball Mill % 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% Sulphide Head Grade % H Copper Production KT H

7 Strategic intervention Shareholder Intervention Team entered the Business in July 2012 Xstrata and Anglo American management jointly assumed leadership of Collahuasi for an initial 3-month period Multi-disciplinary task force with shareholder representatives, directly implementing targeted improvement plans 7

8 The intervention process To transform Collahuasi into an organisation that can effectively and reliably set and achieve Sustainable Development and business plans against key targets 1. Stabilise production 2. Improved planning & reporting 3. Ensure that effective systems & processes are in place 4. Key people in key roles 5. Effective leadership 8

9 Intervention progress to date Interim CEOs in place and search for permanent CEO in progress Key senior management appointed Revised Organisational Structure agreed with Board of Directors Quick Wins identified and implemented Safety Communication & Engagement Strategy in execution Revised Roster Pattern under implementation ensuring 24/7 supervision and senior management coverage 9

10 Revised Organisational Structure CEO (Interim) Roberto Darouiche Miguel Duran VP Finance & Sales VP HR VP Admin VP VP Sustainability Development VP Projects VP Mining VP Concentrator VP Services Manager Safety Michael Farrelly Fernando Hernandez Tomas Martinez Juan Carlos Palma Mario Quiñones (Interim) Deepak Bhasin Alejandro Vasquez Fabian Perez (Interim) Ana Salazar Alvaro Soto (Interim) Revised Organisational Structure has been implemented with key new management from shareholder companies Recruitment for interim positions under way Safety support now more directly linked to line management Increased focus on resolution of near term issues with establishment of VP Mining, VP Concentrator and VP Operational Services Skills gaps in project execution rectified with recruitment of experienced VP Projects

11 Corporate Governance Review Independent review of Governance Structure being coordinated by Chairman of the Audit Committee Complete review of purpose and operating guidelines of all committees is underway Input being provided by directors, shareholders & management Risk Management process has been amended to include physical independent tests of control effectiveness on a regular basis 11

12 Human Resources Review New roster implemented for operations Superintendents and recruitment process commenced Additional mine operators recruited Long term absenteeism has been addressed Improvements in turnover being achieved Before Intervention Monthly Labour Turnover Intervention Forecast 5,0% 4,0% 3,0% Total Supervisors 2,0% 1,0% Jan 12 mar-12 may-12 jul-12 sep-12 nov-12 0,0% 12

13 Safety Review Existing safety program effectiveness has been analysed and amended where necessary PASS, Visible Leadership, 5 Steps, Fatality Prevention Standards Workforce confidence in management s commitment to these programs and to building a positive safety culture has been rebuilt Root causes of recent incidents have been identified and effective corrective actions have been implemented resulting in decreased likelihood of recurrence Operational areas now have effective resources to develop and execute their safety improvement plans Improved understanding of the Risk Management system 13

14 Planning Review Complete review of the planning process has been carried out by the shareholder review team Improved integration between short term and long term planning with long term planning resources being redeployed to site Complete analysis of short term planning process has been carried out. Short term plans are now realistic and achievable with key drivers representing reality of current performance Changes have been made to underperforming staff in this critical area 14

15 Operational Review Implemented on site training facilities to ensure personnel have the capacity to operate multiple pieces of equipment Improved the shift change process Installation of heating systems in pre-splitting drill equipment to prevent freezing Changed to synthetic oil extending time between oil changes (250 to 500 hours) Implemented changes to the truck body contract Implemented condition monitoring for the hoist transmissions on the Bucyrus 73yd3 shovels 15

16 Operational Review Improvement in ore blending fed to plant, reducing percentage of oxidized stocks Better ph control - Improvement in lime plant availability Industrial trials with Hostaflot collector producing a better selectivity in flotation Increase in mined oxide ore, improving the blending of fresh ore Maximize ball mill capacity during the shutdown of Ball Mill No. 3 (modify material transfer system configuration) Improved the planned maintenance by 50% Re-engineered the liner replacement strategy 16

17 Intervention success to date Embedded existing safety systems in the organisation PASS, Visible Leadership 13% increase in shovel availability 4% increase in truck availability 5% increase in both truck & shovel utilisation 15% improvement in monthly material mined 16.2% improvement in copper recovery 4.1% increase in monthly copper in concentrate production 3.7% decrease in employee absenteeism 17

18 2013 Outlook Intervention improvement initiatives bedded in New management & governance structure in place Sustainable improvements in safety performance Planned SAG 3 stator replacement in Quarter 1 Ball mill repairs completed Head grade circa 1% Restore annualised copper production rates above 400kt per annum Next labour negotiations in

19 A world class resource 19

20 A world class resource with huge potential ROSARIO Total Mineral Resources 0.78% CuT. EXTENSIÓN ROSARIO ROSARIO OESTE ROSARIO SUR Ore Reserves 0.80% CuT. UJINA 20

21 And continuous growth % % 0.60% 0.40% 0.20% % Resources Growth (kt) 1.00% Proven Probable % Cu 0.00% % 0.60% % 60% Reserves Growth (kt) Measured Indicated Inferred % Cu 0.20% 0.00% 21

22 Resource Model Ujina Rosario Oeste Model 2012 Reserves Pit 2011 Rosario 22

23 Tita-Kika Successful bid for option to purchase Tita-Kika Mining concession from Enami Cost effective dump space to secure effective long term mine plan and possible additional oxide resources 23

24 Sustainable Development 24

25 Industry leader water efficiency Water Consumption and Recycling Total Raw Water Consumption Concentrator Plant Raw Water Consumption Water reused from Tailings Dam & Thickeners 000m 3 30,105 33,743 33, m 3 27,790 29,235 27, m 3 101, , ,988 Unit Water Consumption L/tonne Industry Leadership 4th consecutive year of reduction in concentrator plant water consumption per tonne of copper 78% water re-use on average over the past 3 years 25

26 Industry leader renewable energy 25MW power tender awarded to Solarpack Will supply 13% of daytime energy consumption from end 2013 Costing competitive with tradition power supply sources 26

27 Commitment to the community Collahuasi Educational Foundation Non-profit institution created by Collahuasi in 2008 Mission is to make a sustained long-term contribution to improving education in the Tarapacá Region Focuses on technical-professional education Applies educational practices of excellence and seeks to transmit its knowledge and experience to other primary and secondary schools throughout the Region Seeks primarily to serve the educational needs of children in the region s most vulnerable sectors and to foster their social integration 27

28 Commitment to the community Culture & the Arts Inauguration of Esmeralda Museum in Iquique Full-scale replica of historical and cultural importance to the country 28

29 Awards and recognitions Prize Awarded by Date Prize for the Best Carbon Footprint 2011 in Large Company Category Best Corporate Citizen Prize in Innovation Category Climate Change Committee, British Chamner of Commerce Chilean-North American Chamber of Commerce October 2011 October nd Place in Best Company in Regional Development for launch of the Corbeta Esmeralda Museum in Iquique Diario Financiero Business Newspaper December 2011 Prize for the Best Annual Report in Non-Listed Companies Category Estrategia Business Newspaper & Price Waterhouse Coopers December

30 Future growth 30

31 Phase 3 project overview The Phase 3 project involves the construction of a new concentrator plant near Rosario mine with either one additional line (Case A) or two additional lines (Case B) Existing infrastructure Concentrator plant located at Ujina 3 grinding lines Life of mine of +50 years Case A New concentrator plant located at Rosario 1 grinding line Incremental copper production of 300ktpa (first ten years) + or Case B New concentrator plant located at Rosario 2 grinding lines Incremental copper production of 500ktpa (first ten years) 31

32 Phase 3 - Industry context Phase 3 is one of the largest unapproved copper projects in the world Scale 600 All Unapproved Global Copper projects Cu ktpa Pulang Junin Radomiro Tomic Relincho Telegrafo Buenavista Haquira Aynak El Abra Galeno Quebrada Blanca Source: Wood Mackenzie Long Term Outlook June 2012 Notes: Includes all copper projects in Highly Probable, Probable, and Possible categories with production levels greater than 150ktpa which start-up by Analysis therefore excludes potential third phase of Olympic Dam expansion to 730kt/a which would deliver incremental copper of 550kt. Production levels shown are the first three year average production once ramp up is completed Quellaveco Agua Rica El Pachon Michiquillay La Granja Cobre Panama Cerro Verde Andina Collahuasi Case A Olympic Dam Golpu Escondida Phase VI Collahuasi Case B 32

33 Phase 3 - Industry context Scale Low Cost Long Life Low Risk A Tier One project One of the world s largest unapproved copper projects Competitive capital intensity Operation maintains mid cost-curve position LOM > 25 years with significant upside potential Brownfield project in a lower risk environment 33

34 Phase 3 - Engineering progress 3D Model View Case B Water Recovery Pond m3 Tailings Thickeners(3) 125 m. Diam. Pebbles Crushing Emergency Ponds Pumping Station Flotation Concentrator Thickeners Milling Reactives Plant Stockpile Ton. vivas 16 feeders 34

35 Phase 3 - Engineering progress 3D Model View Case B STOCK PILE CONCENTRA DO N 2 CARGADOR DE BARCO EXISTENTE STOCK PILE CONCENTRA DO N 1 ESPESADOR ES CONCENTRA DO PISCINA EMERGENCIA ESTACION DE BOMBEO CARGADOR DE BARCO PROYECTADO OFICINAS Y SALA DE CONTROL SENTINA DESALADOR A CAPTACION AGUA DE MAR 35

36 Phase 3 - Incremental copper production Copper production is around 800ktpa in Case A and 1,000ktpa in Case B Fine Copper production (t) 600, ,000 Case B incremental production Case A incremental production Contained tonnes 400, , , ,000 0 Year 1 Year 2 Year 3 Year 4 Year 5 36

37 Rosario Oeste Tunnel development has continued during 2012 Decision on whether to move to conceptual study expected in 2013 Current indications show production fully utilising existing leaching facilities Potential to increase production by up to 200kpta 37

38 Power and water Power and water availability are key strategic issues for any expansion of the Collahuasi Operation Tender process to supply MW per annum commenced in October 2011 Expansion of the concentrator facilities would include a desalination plant located at the Patache Port operations 38

39 Conclusions 1. Shareholder strategic intervention is already producing results 2. Reliable safety and operational performance is key goal prior to any further major investment decisions 3. The Collahuasi Resource is world class and has enormous potential 4. Evaluation of Phase 3 project pre-feasibility is ongoing with a decision on next steps expected in

40 Questions? 40