Greg Ashe - Glencore Queensland Limited - Glencore Zinc Operations


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Greg Ashe delivered the presentation at the 2014 Mining the Territory Conference.

With record year on year investment in mining developments and exploration in the Northern Territory, the 8th Annual Mining the Territory Conference is perfectly placed to hear latest information on this booming region.

For more information about the event, please visit:

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Greg Ashe - Glencore Queensland Limited - Glencore Zinc Operations

  1. 1. Mining the Territory Darwin, 20 August 2014
  2. 2. Agenda 2 1 2 3 Introduction to Glencore – one of the world’s largest diversified natural resource companies and a leading integrated global zinc producer Zinc Assets in Australia – overview of the performance of our assets in the Northern Territory and Queensland with a particular focus on health and safety and community Developing the North – some thoughts on the priorities outlined by the Northern Territory and Australian Governments in developing the Northern Australia region
  3. 3. Introducing Glencore 3 • One of the world’s largest global diversified natural resource companies • Leading integrated producer and marketer of more than 90 commodities • Well-balanced portfolio of diverse industrial assets • Uniquely positioned to capture value at every stage of the supply chain FAST FACTS • Provide work for more than 200,000 people around the world with 18,000 people in Australia • Over 150 mining and metallurgical sites, offshore oil production assets, farms and agricultural facilities • Global network of more than 90 offices • Located in over 50 countries
  4. 4. Glencore zinc business A leading integrated zinc producer • Unique business model combining mining, metal production, logistics and marketing • Supported with a global network of offices to provide superior service to an international customer base A leading trader of lead/zinc metal and concentrates • 2013 marketed volumes of 3.9Mt zinc/lead metal and concentrates • 2013 produced 1.4Mt of zinc metal (43% produced in Australia) Positive zinc market outlook • Zinc metal market went into deficit in 2013 for the first time in 5 years • Driven by the continuing appetite from China for imported metal (record of 600,000 tonnes in 2013) and the recovery in physical demand in the US/South East Asia • Our commodities are transformed into products used in everyday life: • Zinc - galvanised steel, vitamin supplements, consumer goods, fertilizer • Lead - batteries, roof flashing and cladding, underwater cables 4
  5. 5. Glencore zinc assets (global map from investor day presentation to come) 5
  6. 6. Zinc Assets in Australia
  7. 7. Australian Zinc Assets 7 McArthur River Mine • Open pit mine • Zinc-lead concentrator • Bing Bong loading facility Lady Loretta • Underground zinc-lead mining Mount Isa Mines • George Fisher underground zinc- lead mine • Black Star and Handlebar Hill open cut mines • Zinc-lead concentrator, lead smelter and zinc filter plant Bowen Coke • Coking coal for smelting
  8. 8. 2014 Production 8 • In first half of 2014, Australian zinc production was in line with comparable period in 2013 • Relates to higher production at Mount Isa (growth from the Lady Loretta expansion) • Partially offset by a reduction at MRM as a result of lower head grades due to mine sequencing and minor disruptions associated with the expansion project • Lead production was 9% higher than the comparable period in 2013 • Increase relates to the expansion at Lady Loretta and strong production at Black Star offset by lower production at MRM Production Unit H1 2014 H1 2013 2013 2012 Australia Total zinc in concentrates Total lead in concentrates Total silver in concentrates kt kt koz 302.2 107.0 4,149 298.4 97.8 3,740 608.4 213.6 8,450 529.5 193.5 7,975 MRM Zinc in concentrates Lead in concentrates Silver in concentrates kt kt koz 98.5 20.8 634 102.4 23.3 854 203.3 45.8 1,580 202.1 40.4 1,820
  9. 9. Capital Projects 9 • In 2013, Australian zinc assets invested $1.18 billion in expansionary and sustaining capital • Includes 3 major, multi-year projects McArthur River Mine Phase 3 Development Project • $360 million development project • Increases annual production from 2.5Mt to over 5.0Mt • Extends life of mine by 9 years to 2036 Lady Loretta Mine Development • Total of $362 million • Greenfield development of underground mine and all surface facilities • Expanding production to 1.6Mt by 2016 George Fisher Mine Expansion • $274 million, 3 year project • Increases annual production from 3.5Mt to 4.5Mt • Required development of second shaft at George Fisher North, underground mine development and crusher
  10. 10. Employment 10 • MRM employee numbers risen by 165% since conversion from underground to open pit operations from 137 in 2006 to 406 in June 2014 • Mount Isa employee numbers increased with development of Lady Loretta • Contractor numbers now declining as major capital projects are completed 0 200 400 600 800 1000 1200 1400 1600 1800 2000 2200 MRM Employees MRM Contractors MIM Employees MIM Contractors Years 2010 2011 2012 2013 2014
  11. 11. Health and Safety leadership • Number one priority is to provide a safe working environment • Improved performance against key indicators as workforce numbers increased • Major areas of leadership focus: • Contractor health and safety management systems • Fitness for work – eg MRM Healthy Living Program • Occupational health – hydration, noise, lead • Reviewing Hazmat, vertical work and other training • Reviewing, updating and enforcing procedures • Job safety analysis, inspections and risk assessments • Increasing emergency response capability with well trained and resourced Mines Rescue Teams • Leadership development to visibly lead safety 11 0.00 3.00 6.00 9.00 12.00 15.00 18.00 21.00 24.00 2007 2008 2009 2010 2011 2012 2013 LTIFR TRIFR Zinc Assets in Australia Safety Performance (2007-2013)
  12. 12. SafeWork • All assets implementing a Glencore program aimed at eliminating fatal workplace accidents globally • Specifically designed to instil life-saving behaviours among every person on site • Complemented by protocols to eliminate 12 fatal risks • Self assessment against Fatal Hazard Protocols underway • Leaders empowered to do what it takes to drive operations to ‘Zero Harm’ • Committed to delivering world class, health, safety performance 12 Life-saving Behaviours • Always come to work drug and alcohol free • Always use or wear critical safety equipment • Always wear appropriate fall protection equipment when working above 2m • Only operate equipment if trained and authorised • Always isolate and ‘test for dead’ prior to working on energy sources • Never modify or over-rise critical safety equipment without approval • Always seek and obtain clear approval before entering mobile equipment operating zones • Never enter danger zones • Always report injuries and HPRI’s
  13. 13. MRM - Associated community program • MRM supporting community based programs which echo workplace health and safety messages • Commenced in 2013 at the Borroloola Show with a focus on road safety • In 2014, focused on Life-Saving Behaviours in association with partners: • Supplier, George & Sons providing donations of fresh fruit to promote healthy eating • Cancer Council of the NT provided information on cancer risks from lifestyle choices • Skin Patrol clinic at mine and community in March for free skin checks • Community art competition asking residents to illustrate what the Life-Saving Behaviours mean to them attracted 107 entries • Art competition winners being developed into posters for display around the community 13
  14. 14. MRM community investments - $16m+ since 2007 • MRM Community Benefits Trust invested >$10 million in 60 programs to support socio-economic development of the gulf region since 2007 • Additional $1 million provided in sponsorships and donations supporting major community events eg Borroloola Amateur Rodeo, Borroloola Show, King Ash Bay Fishing Competition, Young Achievers • $3.5 million grant for the development of a Multipurpose Community Centre in Borroloola • Annual Golf Day raise money for NT charities - $80,000 in 2013, targeting more next week 14
  15. 15. Developing Northern Australia • We compliment the Australian Government initiative to plan for the development of Northern Australia and the NT Government’s establishment of the Northern Australia Development Office and Ministry • Around half of Glencore’s Australian workforce of 18,000 people is employed in 11 operations within the northern Australia region • Includes all of Glencore’s zinc assets in Australia • We recognise that developing sustainable remote and regional operations within this region relies upon the development of sustainable local communities and economies 15 Zinc assets support: - Indigenous employment and training - Local content in procurement - All levels of education including VET - Community liveability and development - Business and industry development - Infrastructure development - Collaborative water management
  16. 16. In conclusion • MRM in the NT is now part of the Glencore zinc business – a leading integrated global zinc producer • We are continuing to invest in our portfolio of zinc assets in Australia with three major projects all well advanced • Associated with our operational expansion has been: • Increase in employment • Improvement in safety • Extensive investments in the community • Australian Government and Northern Territory Government focus on Northern Australia is important to the sustainability of our assets in this region • We look forward to continuing to work with NT business and industry, government and the community to deliver benefits generated by our operations. 16
  17. 17. Mining the Territory Darwin, 20 August 2014