Productivity improvements in a changing world

Size: px

Start display at page:

Download "Productivity improvements in a changing world"

Martha Cummings
6 years ago
Views:

1 Productivity improvements in a changing world Michael Gollschewski Managing director Pilbara Mines 13 July 2015

2 Cautionary statement General This presentation has been prepared by Rio Tinto plc and Rio Tinto Limited ( Rio Tinto ). By accessing/attending this presentation you acknowledge that you have read and understood the following statement. In this presentation all figures are US dollars unless stated otherwise. Forward-looking statements This document contains certain forward-looking statements with respect to the financial condition, results of operations and business of the Rio Tinto Group. These statements are forward-looking statements within the meaning of Section 27A of the US Securities Act of 1933, and Section 21E of the US Securities Exchange Act of The words intend, aim, project, anticipate, estimate, plan, believes, expects, may, should, will, target, set to or similar expressions, commonly identify such forward-looking statements. Examples of forward-looking statements include those regarding estimated ore reserves, anticipated production or construction dates, costs, outputs and productive lives of assets or similar factors. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors set forth in this presentation. For example, future ore reserves will be based in part on market prices that may vary significantly from current levels. These may materially affect the timing and feasibility of particular developments. Other factors include the ability to produce and transport products profitably, demand for our products, changes to the assumptions regarding the recoverable value of our tangible and intangible assets, the effect of foreign currency exchange rates on market prices and operating costs, and activities by governmental authorities, such as changes in taxation or regulation, and political uncertainty. In light of these risks, uncertainties and assumptions, actual results could be materially different from projected future results expressed or implied by these forwardlooking statements which speak only as to the date of this presentation. Except as required by applicable regulations or by law, the Rio Tinto Group does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events. The Group cannot guarantee that its forward-looking statements will not differ materially from actual results. Disclaimer Neither this presentation, nor the question and answer session, nor any part thereof, may be recorded, transcribed, distributed, published or reproduced in any form, except as permitted by Rio Tinto. By accessing/ attending this presentation, you agree with the foregoing and, upon request, you will promptly return any records or transcripts at the presentation without retaining any copies. This presentation contains a number of non-ifrs financial measures. Rio Tinto management considers these to be key financial performance indicators of the business and they are defined and/or reconciled in Rio Tinto s annual results press release and/or Annual report.

Productivity is at the heart of our strategy Rio Tinto Iron Ore VALUES

want to be A trusted partner that is admired and respected for delivering

there Long-life, low-cost, expandable operations in the most attractive

3 Productivity is at the heart of our strategy Rio Tinto Iron Ore VALUES Behaviours ZERO HARM Accountability Teamwork Integrity Respect VISION Where we want to be A trusted partner that is admired and respected for delivering superior value The best iron ore producer in the world STRATEGY How we will get there Long-life, low-cost, expandable operations in the most attractive industry sectors 1. Production at the right cost 2. Value driven growth 3. Maximising portfolio value

Safety is fundamental to our business Iron Ore injury frequency rate (Injuries per 200,000 hours worked) 2.0 1.8 1.6 1.4 1.2 1.0 0.

4 Safety is fundamental to our business Iron Ore injury frequency rate (Injuries per 200,000 hours worked) Notes: 1 Year to date (January to May) All Injuries Lost Time Injuries

About Rio Tinto Iron Ore Pilbara operations City Town Road Mine Port Rail Perth

Karratha Pannawonica Cape Lambert (A+B) Wickham Roebourne Port Hedland Mesa A

Nammuldi Brockman 2 Brockman 4 Western Turner Tom Price Paraburdoo Paraburdoo

5 About Rio Tinto Iron Ore Pilbara operations City Town Road Mine Port Rail Perth Pilbara Operations Australia Onslow Parker Point East Intercourse Dampier Karratha Pannawonica Cape Lambert (A+B) Wickham Roebourne Port Hedland Mesa A Mesa J 15 mines 360 haul trucks 4 ports 1700 km of rail 190 locomotives 100 km Nammuldi Brockman 2 Brockman 4 Western Turner Tom Price Paraburdoo Paraburdoo Eastern Range Channar Tom Price Marandoo Hope Downs 1 Hope Downs 4 Yandi West Angeles Newman

6 About Rio Tinto Iron Ore 1 Drill & Blast 2 Load & Haul 3 Process 4 Rail 5 Ship > 12,000 kilometres drilled each year > 1 billion tonnes rock moved per year 5 gigawatt hours electricity per day > 20,000 kilometres rail travel per day > 300 million tonnes ore shipped annually RUSSIA Equivalent to the diameter of the earth Enough to fill the MCG every day Able to power city of Newcastle Return trip on the Trans-Siberian railway Cargo shipped through the Panama Canal

7 Productivity drives value in current market conditions Iron Ore price composite (2015$/dmt excl. freight) 200 Historical China Expansion Transition New Normal Cost curve (Mtpa; $/dmt CFR China 62% Equivalent; 2014 Q4) Rio Tinto Pilbara Source: Wood Mackenzie, Rio Tinto

specific Value chain improvements Mine of the Future TM Autonomous technology Remote

8 Relentless focus on productivity Production at the right cost Continuous Improvement Technology and Innovation Improvement Culture System wide High value initiatives Site specific Value chain improvements Mine of the Future TM Autonomous technology Remote operations centre Real time information Make a difference Improving the workplace Make it count Eliminating waste

System-wide improvement High value initiatives Bilinnium Rock

that deliver significant improvements Rehandle Reduction

Further 25 Mt planned for 2015 Belt life increased by 30% Belt

9 System-wide improvement High value initiatives Bilinnium Rock star System-wide projects with dedicated cross-functional teams that deliver significant improvements Rehandle Reduction Conveyor Frenzy Bilinium Rockstar Reduction of 16 Mt in 2014 Further 25 Mt planned for 2015 Belt life increased by 30% Belt up-time improved by 30% Departure conformance up by 40% Cycle time reduced by 18%

Site-specific improvement Value chain improvements

bottlenecks at specific sites Stacker capacity (kt per

0 Wait for trucks (t lost per day) 300 Truck

10 Site-specific improvement Value chain improvements Assisted improvement projects targeting value chain bottlenecks at specific sites Stacker capacity (kt per hour) 9.0 Wait for trucks (t lost per day) 300 Truck productivity (t per truck hrs) 600 TMM Ex-pit

8 Autonomous site Best manned site Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Autonomous

11 Autonomous technology delivering results Autonomous trucks (Effective utilisation indexed to best manned site) Autonomous site Best manned site Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Autonomous drills (Use of availability versus manned fleet) 100% Autonomous (West Angelas) 80% 60% Manned (West Angelas) 40% Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15

12 Real-time information delivers better decisions Operations Centre State of the art mission control that remotely oversees our entire value chain in real-time Cutting-edge approach Remote operations Real-time information Better, smarter, faster decisions

13 Embedding an improvement culture Health & safety Identifying and rectifying hazards 1800 nominations in 2014 Productivity & cost Make it count Small changes make a big difference Improving efficiency and eliminating waste Costs reduced by tens of millions in 2014

Conclusion Strategy The safety and wellbeing of our people is paramount Our strategy has remained constant and clear Market Market conditions have changed but fundamentals remain robust Maintaining a

14 Conclusion Strategy The safety and wellbeing of our people is paramount Our strategy has remained constant and clear Market Market conditions have changed but fundamentals remain robust Maintaining a low first quartile cost position is critical Productivity Relentless focus on continuous improvement Technology and innovation is a competitive advantage Safety and productivity culture drives performance

15 Questions

Mining s innovation imperative

Mining s innovation imperative Chris Salisbury Chief executive Iron Ore Cautionary statements This presentation has been prepared by Rio Tinto plc and Rio Tinto Limited ( Rio Tinto ). By accessing/attending