Mzila Mthenjane Sustainability in the resource industry post 2015 - an Exxaro perspective - Exxaro Resources Limited
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Mzila Mthenjane
Sustainability in the resource industry post 2015 – an
Exxaro perspective
Exxaro Resources Limited
@mimthenjane
@ExxaroResources
27 October 2014 Sustainability in the resource industry post 2015 – an Exxaro perspective Mzila Mthenjane Executive Head, Strategy and Corporate Affairs
Our
business
philosophy
3
3
Sustainability
=
strategic
objec7ves
4
4
Invest in energy, metal & mineral
resource commodities that generate
Invest sustainable economic returns of
1.5xWACC
Develop market insights for our
products & appropriate innovations,
Develop throughout the value chain for
added value & competitive
advantage
Extract industrial application energy,
metal & mineral resource
Grow commodities from diverse
geographies by using our own
capabilities & relevant partnerships
Exxaro
group
structure
5
5
NON-CONTROLLED
OWNER-CONTROLLED OPERATIONS
OPERATIONS
Coal Ferrous Energy • 19,98% in SIOC##
• Third largest coal • Mayoko Project • Underground coal • 44,18% in Tronox
producer in RSA • AlloyStream™ project gasification • 26% in Black Mountain
• Three tied operations • FerroAlloys • 50:50 JV^ :Mafube JV
• Six commercial operations with Anglo
• Acquisition of TCSA* • Cennergi JV with Tata
Power
• GMEP** commissioned
• Secure supply to Eskom • Review Mayoko Project • Explore and • Maintain SIOC
• Increase domestic supply • Review alloy business integrate investment
opportunities in • Analyse and review the
• Manage mines in closure • Apply UHDMS# in lower Africa’s energy
responsibly grade iron ore long-term fundamentals
markets of the titanium dioxide
• Increase exports beneficiation
• Manage emerging industry
• Increase productivity carbon related risks • Divest from Black
• Optimise the operating Mountain and Chifeng
model
Enabled by human resources, sustainable development and innovation processes
* Total Coal South Africa Pty Ltd ** Grootegeluk Medupi Expansion Project #Ultra high dense medium separation ## Sishen Iron Ore Company Pty Ltd ^ Joint venture
Outlook
for
mining
5
6
MAC DEM
RO ENV Subd AND
• Sub
E dued IR dem ued cycli OUTL
AT ng, • Slo econ ONME and OOK
w conf cal and
E R i ck unem improve omic gro NT ron stru
CY Y men ting
s t bulk
u la t ploy m
men ent in po th
w com ting indu ctural
OPde ho re - men t and verty N T
mod
ity m strial an
, E n fi
TO rovi ruct impl
u e ineq
ualit R LI lig ne
y R TI rea be
arke
ts
d
SEe to frast y to
p
CU LA ency entl
y
N
E ur in cit VO curr cur
r
RE PRDA iation pprov
C ss ity pa
Sel rienc cess c
LI • Pre mun n, ca l
EX com pact o acity
s
exp
• M enefic and a
ba et
GU : str
ect
• Li
m er lo ark
e
CE mod f bu
G
co gov
ed
b
• m
LA ateg pressu l delays
cen
M
of
SS itie ll m
•E
sin
TO ic re res
e im
ex
g
CA s sta arket
RY sou
PA rting
RE rces,
ap
• EM growth concerns: post China
• Water and electricity challenges
C
growth down, increasing India/
FO
ITY
INFRASTRUCTURE
• Rail infrastructure delays
a
RM
EM GROWTH
containing growth
Brazil concerns
to
SA MINING GLOBAL
s
itie ry
r
on
s fo
a
ann T
ris ew
som por ivers
egi
L
nti RDA EN
OUTLOOK
n
ies orebo RA
MINING
kr
tun
igh ies -
M
rtu uring CTU
rs p 014 M ER
d
er
OUTLOOK
p
• O ay 2 POW
al o
e
Ma TRU
P
in h
C DE
• A OS V
• M EM
ote
S
•M •U E
cr T
nit
S L
t
os P • J ixe - Q OP
• S ele s th RE ap d/w E
an ea tap ED
ffe
po
tr ctr e b S
SU
op
uc ic
it oa - A k E er W
t
or ura y, s rd: R be ur ing O E TO
eb : m to lab ES
l LABOURur no op im R
m e p L LICENS
od a res ou abo ic rec act D E
ie tur
s r, • Tense L
n io n rivalry si o OPER T
A
alism
in
environm
ent, u m v
pa ery e nation
g
ivity issu
es
ct • Resourc nmental,
• Product • Socia l, e nvi ro
creasing
ssures in
fiscal pre w id e
worl d
Source: Exxaro Strategy Analysis and Analysts Reports
Emerging
trends
7
7
Massive
Mega produc;on
of
Increased
coal
Mega-‐energy
Corridors automobiles,
consump;on
projects
Mega
Urbanisation appliances
Regions
Energy
lndustrialisation
Demand
for
Diversified
energy
electricity,
mix-‐
renewable
&
housing,
Modern
nuclear
Mega transporta;on
Integrated
Cities roads
&
water
solu;ons
economies
Commodity
Massive
Geography
Infrastructure infrastructure
Diversification
budgets
by
Reduce
Mega
consump;on
geopoli;cal
government
of
steel,
copper,
risk
Niche
markets
&
iron
ore
&
coal
stable
income
Energy
and
streams
Compe;;on
water
efficient
for
skills
Social
Sustainability
technologies
Beneficiation Coal
to
Liquids
&
license
to
Power
Plants
New operate
Fully
automated
Business
and
integrated
Models Environment,
health
&
safety
Market
char
mines
Intelligent
logis;cs
issues
&
coke
and
transporta;on
systems
Technology
Intelligent
Human
machinery
and
Remote
Controlled
Capital
equipment
Opera;ons
Impacts
Climate
change
8
8
400
CO2
380
360
340
320
300
280
DATE
260
1000 1200 1400 1600 1800 2000
Source: Promethium Carbon 2006
More
from
less
9
9
Going,
going...
gone?
Urbanisa7on
10
10Emerging
shiI
in
economic
power
11
11
2004 2025 2050
China + India = 6% 20% 45%
US = 28% 27% 26%
EU = 34% 25% 15%
Japan = 12% 7% 4%
10%
20% 21%
28% 26%
27%
17%
2%
5%
4%
15%
12% 15%
25% 28%
34% 7%
4%
2004 2004 EST. 2050 EST.
Other U.S. Japan China E.U. India
“Chindia” - Almost half the global economy by 2050Smart
and
nano
technology
12
12Innova7ng
to
Zero
13
13Increased
life
expectancy
14
14An7cipated
impact
on
commodity
life
cycles
15
15
Ø Steel (iron ore, coking coal, v Light metals (Al, Ti, Mg) ü Organically produced
manganese) v Base metals (Cu) materials
Ø Base metals (Al, Cu, Zn, Ni, v Uranium, Thorium ü Memory materials
Pb, Sn) v Rare Earths and Metals (incl ü Molecular engineering
PGMs)
Ø Steam coal ü Sci-fi materials and energy*
v Nano-materials
Ø Industrial minerals
v Industrial minerals
Ø (TiO2, zircon) v Carbon
v Composite materials
* An acknowledged source for
foresight thinking
2010 2025-2030 2040-2050 2100 2200
Gradual and overlapping evolution Source: Exxaro AnalysisExxaro’s
NXXT
(New
Exxaro
Tomorrow)
journey
16
16
ü Exxaro’s sustainability plan into the future
ü Innovation is embedded in the strategy
ü Fully resourced with people and budget
ü Multi-dimensional: triple bottom line perspectives
Benchmarking
visits
and
conferences
scou7ng
Update
technology
thrusts
and
roadmaps
STREAM 1
Develop
value
proposi7ons,
prioro7se
World in 2030
INDUSTRY RESEARCH
Global “DRIVERS”
Execute
R&D
projects
STREAM 2
Resource Industry 2030
Industry “DRIVERS”
STREAM 3
Exxaro NXXT Programme 2030
Exxaro “ STRATEGIC
THRUSTS”Traits
of
a
future
resources
extrac7on
industry
17
17
10 Strategic Thrusts
2013 2030
2030
Smart Exploration
1. Increasing Shareholder expectations 1. Sustainable License to Operate (LTO):
(Profits) • Creating inclusive wealth for all
2. Extreme escalation in operating costs New Mining Technologies Stakeholders
• Balanced and sustainable partnership
3. Rapid Technological Innovation i.e. IT/
between government, community and
Com’s..
New Processing Technologies resources industry
4. Increased pressure on Social and
• Small footprint / limited environmental
Regulatory Compliance.
impact
5. Un-balanced relationship between Asset Management/Logistics • Self-sustaining economically viable
government, community and mining. community > Beyond a Life of Mine (LOM)
6. Current core processes are sub-optimized 2. Smart Exploration: Accurate, predictable,
(exploration, geology, mining processing Clean Coal Technologies instant, information and models
and logistics) 3. 100% resource extraction
7. High levels of waste and discard materials 4. Zero Waste
Innovation to Zero Harm 5. Zero Harm - safety/health
from production.
8. High Impact on Environment and in- 6. Energy, carbon and water neutral
7. Workforce equipped to support the 2030
sufficient Rehabilitation Social Responsibility
business
9. Fossil Fuel based Economy / Carbon
8. Hybrid/renewable/alternative energy
Emissions
solutions
10. Energy Supply / Cost constraints Sustainable Energy
9. Capitalise on trend of advanced / light
11. Limited focus on downstream beneficiation Materials /Metals
12. Current workforce ill-equipped for the 10. Integrated, optimised and redefined value
Automation
future (High levels of semi-skilled chain
employees and shortage of highly
skilled employees) Integrate/Redefine Value Chain
13. Communities dependant on Mining
ActivitiesThrust
1:
Smart
explora7on
18
18
Drone exploration Next generation geo- Next generation drilling
physics technologies technologies
• Solar powered drones
can fly for long durations Will make geology more effective • Sonic Drilling
without major and accurate, reducing costs, • Intense vibration/liquefaction
maintenance
increasing yields and enabling • Automated resonance
• UAVs can be fitted with
magnetometers or full extraction of the reserve’s (waterless and energy
multispectral equipment. potential. efficient)
• Oil & Gas industry
Geometallurgy technologies applied in
Titan Aerospace Drone
exploration drilling
Integration of geology and • Automated, multidirectional
metallurgy data for optimum
drilling
plant design.
• Real-time ore
characterisation influencing
drill plan in real-time
• Integrated geological,
mining, environmental and
survey data for improved
interpretation of geological
conditionsThrust
2:
New
mining
technologies
19
19
Autonomous hauling Fully autonomous mining In-pit crushing and
beneficiation
Trucks are controlled entirely • Geology to market data used to
using a supervisory computer integrate planning and control Eliminates truck haulage.
at an operations centre, for effective resource and asset Less sensitive to commodity prices.
contributing to surface management. Less dependant on human factor.
collision avoidance, fuel • Selective mining will allow Reduce operating costs.
savings, increased safety, optimal extraction of the reserve Increase productivity.
less maintenance and and in turn realise less waste. Improve safety.
uninterrupted production. • New blasting technologies. Reduce environmental impact.
• Wireless equipment.
Minestar Automation by CATThrust
3:
New
processing
technologies
20
20
Ultra High Dense
AlloyStream TM Medium Separation (UHDMS)
Continuous surface miner
• In-house developed In-house developed technology • Extract, crush and load material in
technology to process enabling iron ore separation at one continuous process.
certain alloys at lower costs RD >4. Project is in • Selective mining of coal and
and with lower feed grades demonstration phase interburden results in:
than conventional furnaces. • Increased calorific value and
• Patented and tested for
Dry processing lower ash contents.
commercial viability in • Improved ROM quality
• Waterless processing offers • Reduced processing effort
2012/2013.
significant environmental and • Reduced volume of overburden
cost benefits in a water scarce
Fines processing future scenario.
• For slimes handling, drying
Utilisation of fines in power technology, paste technology,
stations and reductants electro-kinetic drying,
markets through briquetting/ absorbent polymers and hgh
agglomeration of fines density slurry pumping.
material.Thrust
7:
Societal
responsibility
&
accountability
21
21
Environment:
Social License
to operate stewardship
through effective
Community
involvement rehab & mine
closure
Health & Safety
Protect & Water & energy
promote health, consumption
safety & Energy efficient
wellbeing of equipment
living organisms
Source:
Frost
&
Sullivan
The
challenge
-‐
innovate
to
remain
relevant
22
“Tweaking
exis;ng
processes
cannot
deliver
the
massive
shiRs
mining
companies
need
in
today’s
capital-‐constrained
environment.
To
build
true
compe;;ve
advantage,
companies
‘Exxaro
will
be
required
to
must
look
beyond
incremental
performance
improvement
to
determine
how
they
can
revise
enhance
its
internal
their
systems
to
embrace
the
broad
theme
of
innova;on.”
innova7on
and
project
~
Jürgen
Beier,
Mining
Leader,
Canada
execu7on
capabili7es
in
the
coming
years
in
order
to
“We,
as
an
industry,
are
woefully
under-‐ meet
stakeholder
spending
on
innova;on
and
business-‐
improvement
programmes
given
the
state
of
expecta7ons’
extrac;on
challenges.
On
a
revenue
to
revenue
basis,
the
mining
industry
spends
80
per
cent
~
Sipho
Nkosi,
less
on
technology
and
innova;on
compared
to
CEO
Exxaro
Resources
Limited
the
petroleum
sector.”
~
Mark
Cu=fani,
Anglo
American
(WRC)
Exxaro’s
vision
of
the
future
23
2324 24
Exxaro’s
vision
of
the
future
25
2526 26
Thrust 4: Asset management/logistics 27
Logistics business (multi-modal) Inland blending facilities
An in-house logistics business will provide • Cost effective distribution inter-modal
competitive advantage, reduce costs and open up transportation model and allocation
new revenue streams. A multi-modal solution decisions.
provides the greatest opportunities in conjunction • Minimise total logistics costs, procurement
with an inland blending facility, ensuring supply to all cost, shipping cost, and inland delivery cost
take-off opportunities. • Blending of products according to customer
needs (VIU).
Bulk Transport by air...
Carbon nano tube structures...mega planesThrust 5: Clean coal technologies 28
Gasification plant Fluidised bed combustion
A refinery process to convert gas into longer-chain • Suspend solid fuels in upward-blowing jets of
hydrocarbons such as gasoline or diesel fuel. air during the combustion process.
Methane from UCG could be converted by gas • Provides more effective chemical reactions
and heat transfer
synthesis, Fisher-Tropsch process and cracking.
• Suited to burning fuels that are difficult to
ignite such as high ash coals and coal mine
Other technologies wastes, and fuels with highly variable heat
content, including biomass
• Underground coal gasification – Waste stream and Dried tailings are suitable
• Carbon sequestration sources for this power generation
methodology.
• Energy from Coal Waste (CFB)
• Coal Bed Methane
• Energy generation from low grade coal
• Biofuels
Outotec – FBC FacilitySustainability 29
29
Sustainability is the single biggest business opportunity of 21st century…
it will be the next source of competitive advantage.
~ Lee Scott
Wal-Mart CEOThrust 6: Innovation to zero harm 30
30
Floating/constructed Continuous rehabilitation-
Waste re processing wetlands restoration
• New technology will make the • Man-made ecosystem • Restoration planning from core
re-processing of waste • Provides an efficient, natural way logging to design to ensure
to improve water quality and optimal material usage.
economically viable
• Continuous restoration during
• Unlock value inside what is buffer habitats against surges in
operation activities.
currently regarded as waste. nutrients and pollution.
• Minimal Impact and Liability
• Open up new revenue streams, • More efficient mine closure
• Lower environmental liability
• Increase life of mine.
Fatigue sensors
• Installed in equipment - can
detect fatigue levels of the
operator then sound an alarm
or immobilise equipment if it
is safe to do so.
• Collision avoidance and
proximity detection systems.Thrust 8: Sustainable energy 31
31
Biomass Co-generation
• Fuel production for remote Generate electricity using off-
operations. gases, excess heat and other
• Plantations combat soil waste energy streams in the value
degradation and chain to reduce energy costs and
deforestation ensure security of supply.
• Employment opportunities
• Downstream processes
(flooring, furniture )
beyond LOM.
• Carbon sequestration.
Modular Thorium Nuclear
• Could support electricity needs of remote locations as they
are usually small and highly variable, can operate for 4 years
without refuelling and can be combined into a power station
of any size.
• Technology in demonstration phase.
• Construction times estimated to be around 3 years.Thrust 8 cont: Sustainable energy 32
32
Concentrated solar power Hybrid energy - Smartgrids
• For thermal energy and base load using • Modernised electrical grid automated to improve
molten salt storage the efficiency, reliability, flexibility, economics,
production and distribution of electricity through
• It is the highest performance, lowest-cost
load adjustment
utility-scale solar power system in the world
• Next-generation transmission and distribution
• Smooth and Predicable Output
infrastructure will be better able to handle bi-
• Solar Carports pay back 5 years direction energy flows
• Suitable for remote areas
Skyfuel’s CSP TechnologyThrust 9: Automation 33
33
Integrated and automated
management control centre Robotic sampling plants
Effective integration of management information Automated sample preparation. All processes
offers benefits such as integrated mine planning including sample dividing and splitting, crushing
and execution, warehouse and workshop and pulverising, density measurement, sieve
automation, real-time online monitoring of assets analysis, moisture analysis, building of
And wifi availability throughout the business. composites for subsequent fusion and XRF
analysis.
Virtual training, modelling and
simulation
• Visual modelling of new operations facilitates
buy-in from local communities and
governments and License to Operate, assists
with mine and environmental planning,
supports safety and operational activities.
• Simulating new concepts and plansThrust 10: Integrate/redefine the value chain 34
34
UCGThrust 10: Integrate/redefine the value chain 35
35
Nano-materials UCG
• Carbon nanotubes and Graphene are lighter, • New mining method redefining the value chain.
stronger than stainless steel and titanium • nvolves horizontal drilling into a coal seam, oxygen
and have a reported intrinsic injection and ignition of the seam which acts as a
superconductivity greater than copper cable. gasifier.
• Mitshibushi Royan Resin – BMA . • Syngas used in power generation or to produce gas
to liquid fuels.
• Exxaro is in a JV with Linc Energy to evaluate
3-D printing development of UCG applications in Southern Africa.
• The process of making a three-dimensional
solid object of virtually any shape from a digital
model using an additive process.
• Metal alloys, stainless steel, aluminium,
photopolymers and thermoplastics can be
used.
• Graphene (Carbon nanotubes) already printed.
• Downstream industries such as electronics will
be a major market in the future.In summary – future resources industry characteristics 36
36
1. Sustainabale License to Operate (LTO):
• Creating inclusive wealth-all Stakeholders
• Balanced and sustainable partnership between
government, community and resources
industry
• Small footprint / limited environmental impact
• Self-sustaining economically viable community
> Beyond a Life of Mine (LOM)
2. Smart Exploration: Accurate, predictable, instant,
information and models
3. 100% resource extraction
4. Zero Waste
5. Zero Harm - safety/health
6. Energy, carbon and water neutral
7. Workforce equipped to support the 2030
business
8. Hybrid/renewable/alternative energy solutions
9. Capitalise on trend of advanced / light Materials /
Metals
10. Integrated, optimised and redefined value chainYou can also read
