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Melbourne Mining Club
 

Melbourne Mining Club

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Chief executive, Mark Cutifani, talks to the Melbourne Mining Club in London.

Chief executive, Mark Cutifani, talks to the Melbourne Mining Club in London.

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    Melbourne Mining Club Melbourne Mining Club Presentation Transcript

    • “FIRST THE ASHES… AND NOW THE RESOURCES” Melbourne Mining Club – 5th June 2014
    • 2 ESTABLISHING MY CREDENTIALS I am also a mining engineer… …that has traded his Baggy Green Cap for a Hard Hat.
    • 3 ESTABLISHING MY CREDENTIALS I come from Wollongong…the intellectual capital of Australia… …where we like to dress up…and wear colourful hats.
    • 4 ESTABLISHING MY CREDENTIALS A more accurate photo taken with a “special movie star” lens… ….
    • 5 ESTABLISHING MY CREDENTIALS A more accurate photo taken with a “special movie star” lens… ….
    • 6 TRANSFORMATION STARTS WITH LEADERSHIP What changed…a loss in 2013…to a 5 nil whitewash 6 months later… …but can they take it forward and create a new dynasty? What changed? • Home ground advantage? • Darren Lehman? • The colour of their underwear? Is winning sustainable? • Leadership & Talent…do they have the leadership and talent to take success forward…possibly but not yet convinced? • Systems and processes…are they technically superior…batting looks brittle. • Innovation…still lagging the India T20 transformation! Learning from the past? • A dynasty requires all three…
    • 7 THE AUSTRALIAN CRICKET STORY A chronology of events helps to paint a picture… …the “Invincibles” set the standard…but a rapid decline follows. 1948 – The “Invincibles”…62%  Don Bradman & a great side  Brilliance on all technical elements × The tradition continues… 1950s – A Good Team…….42%  Richie Benaud & a good side × A strong technical side, but not brilliant × The tradition continues… 1960s – The Slide …………36% × Bill Lawry takes boredom to a new level × A solid team…but… × The tradition continues…
    • 8 THE AUSTRALIAN CRICKET STORY A rebirth begins with a brash new captain… …and the seeds of “disruptive innovation” are sown. 1971 – The New Era………..50%  Ian Chappell captains his first test  Technically competent…DK Lillee et al × The tradition continues… 1976 – The Montreal Olympics • Australia wins 1 silver medal • Malcolm Fraser announces Royal Commission into “decline of sport” • Australia demands a new vision 1977 – The Packer Circus • Chappell leads team into WSC • Shakes the core of the establishment • Australia becomes “professional”
    • 9 THE AUSTRALIAN CRICKET STORY A brave captain rebuilds from the ruins of unguided disruption… …leadership meets “disruptive innovation”. 1980s – Border Years…….32%  Rebuilds the foundations • 1987 CRICKET ACADEMY established • Australia rebuilds – wins World Cup and starts to believe in possibilities 1994 – Mark Taylor………..52%  Intelligent leadership  Talent emerges and is nurtured • Innovation starting to impact 1999 – Steve Waugh………72%  The science of leadership…with talent  A new standard in technical application  The end product of disruptive innovation
    • 10 THE AUSTRALIAN CRICKET STORY A leadership forged in a new world…a “dynasty” emerges… …and dominates the sport for more than 15 years. Leadership  The power of symbols…  Understanding structure and processes…  Setting new expectations on delivery Structure and Processes  Building on science…technical focus  Strengthening the weakest links  Every session had to be won Disruptive Innovation  The Packer changes…winning is the game  Institute of Sport – science meets cricket  Organisation and deliberate leadership strategies become a winning edge
    • 11 MINING: PATHWAY TO VALUE The lessons we can learn are universal… …and our performance is only constrained by our imagination. Leadership  What is possible…  The power of symbols…  Capable people doing the right work… Structure and Processes  Resources define potential…  Mining strategies focus on potential…  Managing processes delivers potential… Disruptive Innovation  People approaches drive productivity…  Technologies step-change costs…  Market demand can be created…
    • 12 LEADERSHIP… ORGANIZATION • Strategy defined to rebuild value………………………...“Driving Value” • Business groupings reflect strategy elements……..global market mix • Focus on rebuilding “core skills”...........................mining and markets TALENT POOL • Levels of work…………………………………......managing complexity • Top 3 levels • At start, 50% capable…………………………………now at +70% • 141 now down to 99…….............................clear accountabilities SYMBOLS • Selling the jet and other “corporate conveniences”……..value focus • Focus on delivering……….......................................11% now at 48% • Asset reviews identify the 5 key issues.…………………...what to fix An “Organization Model” is more than job descriptions… …and the organisation is the STARTING POINT for driving change.
    • 13 1 2 3 54 9% 2% 71% 15% 4% LEADERSHIP... Sishen Kolomela Capcoal Los Bronces Mogalakwena Collahuasi Jwaneng Orapa (1) Total of 52 assets at Q1 2014 versus 55 assets at Q1 2013. Excludes both Khomanani and Khuseleka (no longer in production) and Union North and Union South are now reported as Union mine Moranbah CerrejónSnap Lake Bathopele 40% 8% 48% 0% 4% Collahuasi Jwaneng Orapa Sishen Kolomela Moranbah Capcoal Los Bronces Mogalakwena Cerrejón Kimberley Bathopele 1 2 3 54 4 Quarters to Q1 2013 Q1 2014 Only Failure to deliver can become a habit…it can become the culture… Q1 2014 …where delivery must be an expectation. 2012/2013 Performance Delivery • 19% of operations under budget with no plan for recovery • 71% of operations under budget with a plan to recover • 9% on budget 2014 Performance Delivery • 4% of operations under budget with no recovery plan • 48% of operations under budget with a validated recovery plan • 48% of operations on budget. …and delivering a $1.2bn EBIT run rate improvement per Driving Value.
    • 14 “THE CRITICAL PROCESSES” Note: Assets mapped to curve based on largest impact for improvement Valuecreation Pathway to Value Ore body Capability Methods & Design Operating Parameters Planning & Scheduling Continuous Improvement Best Practices Resource-to- market Resource Potential Understand Operating Options and Value Configuration Driving Performance Endowment
    • 15 PATHWAY TO VALUE: “THE CRITICAL PROCESSES” Note: Assets mapped to curve based on largest impact for improvement Valuecreation Pathway to Value Ore body Capability Methods & Design Operating Parameters Planning & Scheduling Continuous Improvement Best Practices Resource-to- market Resource Potential Understand Operating Options and Value Configuration Driving Performance Endowment 1 2 3
    • 16 RESOURCE POTENTIAL: MOGALAKWENA Recognising resource potential is the starting point… Daily tonnes mined 2013 – 2014 YTD (including contractors) New shovel …pushing from 300kozs to 360kozs…to 420kozs…to ???. +50%
    • 17 PATHWAY TO VALUE: “THE CRITICAL PROCESSES” Note: Assets mapped to curve based on largest impact for improvement Valuecreation Pathway to Value Ore body Capability Methods & Design Operating Parameters Planning & Scheduling Continuous Improvement Best Practices Resource-to- market Resource Potential Understand Operating Options and Value Configuration Driving Performance Endowment 1 2 3
    • 18 Original cut back sequence New cut back sequence Method and design changes Mined out Futurecut Currentwastecut 30Mt (1Year) New wastecut 30Mt (1Year) Future cut Mined out PLAN PLAN SECTION SECTION Waste mined in 1 year does not expose the ore Waste mined in 1 year exposes the ore in the New Plan MINING METHODS: MOGALAKWENA
    • 19 0 100000 200000 300000 400000 500000 600000 700000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 Eq.refinedPtoz BP14 (L1) Step 1 MINING METHODS: MOGALAKWENA 1. MSC = Mogalakwena South Concentrator; 2. MNC = Mogalakwena North Concentrator; 3. MCC = Mogalakwena Central Concentrator Total Tonnes Mined Platinum Ounces - 50 100 150 200 250 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100 Totaltonnesmined[Mt] BP14 Step 1 Step 1 Step 1
    • 20 0 100000 200000 300000 400000 500000 600000 700000 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 Eq.refinedPtoz BP14 (L1) Step 1 Step 2 MINING METHODS: MOGALAKWENA 1. MSC = Mogalakwena South Concentrator; 2. MNC = Mogalakwena North Concentrator; 3. MCC = Mogalakwena Central Concentrator Total Tonnes Mined Platinum Ounces - 50 100 150 200 250 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100 Totaltonnesmined[Mt] Step 1 Step 2 Step 2 Step 2
    • 21 0 100000 200000 300000 400000 500000 600000 700000 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 Eq.refinedPtoz BP14 (L1) Step 1 Step 2 Step 3 MINING METHODS: MOGALAKWENA 1. MSC = Mogalakwena South Concentrator; 2. MNC = Mogalakwena North Concentrator; 3. MCC = Mogalakwena Central Concentrator Total Tonnes Mined Platinum Ounces - 50 100 150 200 250 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100 Totaltonnesmined[Mt] Step 1 Step 2 Step 3 Step 3 Step 3
    • 22 PATHWAY TO VALUE: “THE CRITICAL PROCESSES” Note: Assets mapped to curve based on largest impact for improvement Valuecreation Pathway to Value Ore body Capability Methods & Design Operating Parameters Planning & Scheduling Continuous Improvement Best Practices Resource-to- market Resource Potential Understand Operating Options and Value Configuration Driving Performance Endowment 1 2 3
    • 23 DRIVING VALUE…IMPROVING THE PROCESS So what does an F1 car have in common with a box?
    • 24 DRIVING VALUE…IMPROVING THE PROCESS So what does an F1 car have in common with a box? …it is about people…and the desire to achieve a better outcome.
    • 25 DRIVING VALUE…IMPROVING THE PROCESS So what does an F1 car have in common with a box? …it is about people…and the desire to achieve a better outcome. Six Sigma Lean Manufacturing Integrated Asset Planning
    • 26 Strong productivity increases…100%... at Moranbah… 0 20 40 60 80 100 120 Jan 12 Jan 14 Jul 13 Jan 13 Jul 12 Moranbah 0 50 100 Jul- 12 Jan- 13 Jan- 12 Jul- 13 Jan- 14 Grasstree Longwall move Longwall move Longwall move/Drift collapse Longwall move Longwall move Longwall move LW hours LW hours …Grasstree starting to show…+30%...encouraging performance. IMPROVING THE PROCESS…MORANBAH
    • 27 PATHWAY TO VALUE: THE MORANBAH JOURNEY Note: Assets mapped to curve based on largest impact for improvement Valuecreation Pathway to Value Ore body Capability Methods & Design Operating Parameters Planning & Scheduling Continuous Improvement Best Practices Resource-to- market Resource Potential Understand Operating Options and Value Configuration Driving Performance Endowment MET. COAL MN- 2014 MN- 2013 MN- 2012 3.5mtpa 5.5mtpa 7.0mtpa
    • 28 Focus on operating strategy and consistency and control… …delivers a 30% production improvement and 20% cost reduction. IMPROVING THE PROCESS…BARRO ALTO 29-05-201408-04-201418-02-201429-12-201310-11-201326-09-201312-08-201328-06-201314-05-201301-04-2013 7000 6000 5000 4000 3000 2000 1000 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 1 1 22 22 2 1 1 1 2 2 2 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 22 2 2 2 2 1 1 11 1 1 1 2 2 2 2 2 22 2 1 1 22 22 2 2 2 3 3 2 2 2 1 2 1 1 1 1 1 1 1111 1 1 1 1 1 1 2 2 2 2 1 1 2 2 2 11 1 2 2 22 2 2 2 2 2 11 1 1 11 1 111122 2 2 2 2 2 2 2 1 2 2 2 2 1 1 11 2 2 2 Control Charter Q2-13 to Q2-14 Throughput (tms) _ X = 4520 UCL = 6805 _ X = 5151 _ X = 5392 _ X = 4956 UCL = 7062 UCL = 6573 UCL = 6474 LCL = 2566 LCL = 5018 UCL = 7162 _ X = 6090 BARRO ALTO CONTROL CHART – YTD MAY Strategy Intervention
    • 29 PATHWAY TO VALUE…KEY ASSETS Note: Assets mapped to curve based on largest impact for improvement Valuecreation Pathway to Value Ore body Capability Methods & Design Operating Parameters Planning & Scheduling Continuous Improvement Best Practices Resource-to- market Resource Potential Understand Operating Options and Value Configuration Driving Performance Endowment MET. COAL IRON ORE PLATINUM COPPER NICKEL THERM. COAL M PH T S L BA K O COL LB J MN GT N C DIAMONDS Nb&P
    • 30 DISRUPTIVE INNOVATION The face of mining is radically changing…because it has to… …and those that get it right will lead the industry in returns. Technologies  New mining methods  Open technology platforms  Application of material sciences People  Managerial leadership  Engagement drives practices  Learning from the “restless innovators” Projects and construction  Digital design and construction  Modular configuration  Communities and the MOTF
    • 31 WHAT’S IN A HAT? Leadership is a journey…and every step is into the unknown… …its not the outcome we debate…it’s the pathway to get there.
    • 32 ANGLO AMERICAN REAL MINING. REAL PEOPLE. REAL DIFFERENCE.
    • THANK YOU