Upload
habao
View
215
Download
0
Embed Size (px)
Citation preview
Prepared for the Ministry of Energy, Industry & Minerals (MEIM) in Saudi Arabia
MEIM VRO Knowledge Sharing Session
Minerals & Mining: Basics, Global,
Regional and KSA-specific context
Document for discussion
March 20th, 2018
2
Agenda
1 Why we are here
2 Minerals & Mining landscape: Basics, Global, Regional and KSA-specific context
3
The objective of the M&M knowledge sharing session is to increase the
awareness level of this critical sector and its contribution to the economy
Source: MEIM VRO, Arthur D. Little analysis
Why we are here
“Minerals & Mining Landscape in Saudi Arabia”
MEIM VRO
Knowledge Sharing SessionM&M Sector OverviewBasics, key definitions, value chain
M&M Global / Regional TrendsMajor players, future trends, deep-dives on
selected commodities relevant to the Kingdom
M&M Landscape in Saudi ArabiaAmbition, GDP contribution, targets, initiatives,
quick wins, key considerations, success factors
Q&As / Panel DiscussionRecap of key messages, required support
50minutes
30minutes
30minutes
10minutes
4
Agenda
2 Minerals & Mining landscape: Basics, Global, Regional and KSA-specific context
2.1 M&M overview: basics, key definitions, value chain
2.2 M&M: Global and Regional trends
2.3 M&M landscape in Saudi Arabia: current state and Strategy 2035
2.4 Q&A: Recap of key messages
5
M&M overview: basics, key definitions, value chain
What do we plan to cover in this chapter?
M&M overview: basics, key definitions, value chain
Provide you with an overview of mining operations and overall Life Cycle
of a Mine
Discuss what we consider by the Minerals and Mining Landscape
Go through a deep-dive case study throughout the Mining Value Chain:
how to mine iron ore and produce iron ore pellets
Discuss examples of Mining Value Chains for other Metals / Minerals
6
Mining is a high impact, long-term and big business
M&M overview: basics, key definitions, value chain
Equipment this big.... in mines this big....to produce something
this big
$30m-$120m $$$$$$5m-$75m/yr
7
which can get very messy !
Note: Red Hills Lignite Mine in Choctaw County Mississippi
Source: Mississippi Development Authority
M&M overview: basics, key definitions, value chain
whilst doing this..... but leaving this
8
and is hardly the cleanest way to do business....
Note: Cerrejon site in colombia – picture on left shows multi-seam operation, picture on roght shows a reclaimed portion of the site
Source: Mining Technology; BHP
M&M overview: basics, key definitions, value chain
from noise and dirt..... to peace and tranquility
Beauty is in the eye of the beholder
9
Stages and Costs in the Life Cycle of a Mine
Source: Hartman & Mutmansky 'Introductory Mining Engineering' 2002; Behre Dolbear
M&M overview: basics, key definitions, value chain
Prior to Mining Actual Mining Post Mining
Prospecting Exploration Development Exploitation Reclamation
Search for Ore mineral
deposits
Direct or Indirect
Methods
Locate favorable
location
Air – aerial
photography, satellite
imagery
Surface – ground
geology, geophysics
Spot anomaly, analysis
and evaluate
Defining extent & value
of ore body
Sample (drilling or
excavation)
Estimate tonnage &
grade
Value Deposit
Feasibility study – make
decision to abandon or
develop
Opening up ore deposit
for production
get mining rights
file environmental
impact/ technology
assessment
construct
transportation access
system
locate surface plant,
construct facilities
excavate deposit
(strip or sink shaft)
Large scale production of
ore from mine
factor in choice of
method (geologic,
geographic, economic,
environmental, social,
safety)
type of mining
method (surface or
underground
monitor costs &
economic payback
Restoration of Site
removal of plant and
buildings
reclamation of waste
and tailing dumps
monitoring of
discharges
1-3 yr 2-5 yr 2-5 yr 10-30 yr 1-10 yr
$0.2m-$10m $1m-$15m $10m-$500m $5m-$75m/yr $1m-$20m
10
M & M landscape: key commodities
M&M overview: basics, key definitions, value chain
Final products – iron ore
fines, lumps and pellets
used in steelmaking
Iron ore Pellets are the
Focus of the following
detailed mining example
(excluding precious
metals)
Aluminum
Copper
Lead
Nickel
Tin
Titanium
Zinc
Gold
Silver
Platinum, including
Platinum Group
Metals:
– ruthenium
– rhodium
– palladium
– osmium
– iridium
17 elements / metals,
including:
Cerium (Ce)
Dysprosium (Dy)
Erbium (Er)
Europium (Eu)
Gadolinium (Gd)
Chemical raw
materials
– Apatite & Halite
Metallurgical raw
materials
– Refractory clays
& Limestone
Construction
materials
– Granite &
Ceramic
Non-metallic non-
ore raw materials
– Industrial
crystals, Precious
& Semiprecious
stones
Iron ore groupMajor non-
ferrous metalsPrecious metals
Rare-earth
elements / metals
Major non-
metallic minerals
11
Global Mining landscape: key numbers
M&M: Global and Regional trends
Iron Ore Alumínio
Copper Zinc Nickel Gold
0
4,000
2,000
6,000
Kt
Rusal
3,601
Rio Tinto
3,380 3,361
18% 25%40% 41%
13% 37%31% 40%25% 30%27% 40%
0
200
300
100
295
Mt
BHP
245
Rio TintoVale
Aluminum
2
0
1
3
Glencore
1.226
Mt
1.7371.831
Codelco Freeport-
McMoran
0
100
2,230 Mt
200
300
Kt
Vale
260
MMC Norilsk
Nickel
BHP
154
0.0
1.5
1.0
0.5
1,0731,100
350
Kt
Nyrstar
764
Hindustan
Zinc
Korea Zinc
Group
0.0
2
4
6
Anglogold
Ashanti
Moz
4.9
Barrick
Gold
Newmont
3.63
200
0
100 90
141
BHP
Current Capital Stock (US$ B) – November 2017
Rio TintoVale
53
57,600 Kt
3,100 t2,250 Kt11,900 Kt19,400 Kt
%
Top 3
EBITDA1
Margin
285
Worldwide
Production
Top global mining companies (2017)
5.52
Glencore
52Aluminum
Corp. of China
Top 3 companies per ore represented ~15-40% of the 2016 worldwide production depending on commodity
12
Iron and iron ore products
What is iron ore? Types of iron ore products
M&M overview: basics, key definitions, value chain
Source: ADL analysis
Iron ...
… is a metallic element found in rocks and
minerals
… shows a colour range from dark grey to
rusty red
… is usually extracted in open-cast mines
… is identified as Fe on periodic table of
elements
… composes ~ 5% of world's crust
… is ranked fourth in abundance in earth's
crust and
… is second most abundant metal (after
aluminium)
… makes up 0.006% of human body
(blood)
… is mainly mined by Vale, BHP and Rio
Tinto
Lumps with particles > 4.75mm
Fines and lumps separated from same ore by
screening and sorting
Higher-grade lumps can be directly fed into
blast furnace, in particular interesting at high
steel demand
Pellets are made from fine iron ore concentrate,
rolled with binder in balls and passed through
furnace (diameter: 9.55–16mm)
Highest productivity, in particular desirable at high
demand
Fines with particles < 4.75mm
Need to be sintered before charged to blast
furnace
Many steel makers have own efficient sintering
plants installed (should run at high capacity)Fines
Pellets
Lumps
13
Chemical structure: Fe3O4
Ore body usually of very low grade (~20 – 30% Fe)
Magnetite must be upgraded to make it suitable
for steelmaking
Once upgraded, magnetite concentrate has a higher
iron content than hematite and can be sold at a
premium
Accounts for approximately 50% of global iron ore
production
Production is prevalent in North America, China, the
CIS and Europe
Magnetite
Open pit mine operations and terminology: Magnetite vs hematite
M&M overview: basics, key definitions, value chain
Chemical structure: Fe2O3
Ore body usually of very high grade (58 – 65% Fe)
Hematite, known as DSO (Direct Shipping Ore), is
crushed and screened prior to shipping into lump and
fines.
Lump is directly fed into the blast furnace, whilst
the fines are converted to either sinter or pellets prior
to addition to the furnace
Production is prevalent in Australia (more than 95% of
total production)
Source: Mineral Engineering Technical Services report; ADL analysis
Hematite
14
Open pit mine operations and terminology
Section through an open pit in an idealized tabular ore body
M&M overview: basics, key definitions, value chain
FINAL PIT OUTLINE ACTIVE PIT OUTLINE
Berm
Inte
rval
Berm Width
Berm
Slope
Angle Pit Floor
Crest of
Bench
Toe of
Bench
Bench
Bench
Face
Bench
Slope
Angle
Bench
Height
Overall Pit Slope Angle
Ore body
Footwall
Structure
Governed by specifications
of operating machines and
by mining regulations
Berm is governed by
geotechnical configuration
of the slope
Haul Road width governed
by required capacity of
road and type of haulage
unit
Term explanation
in glossary
Road and Ramp Width
Source: SME Mining Engineering Handbook
15
Iron ore processing operations
What are pellets and why they are important
Pellets are created by balling very fine ore with a
suitable binder, then burning the resultant balls into
spheres of nominally 8-20mm diameter
Pellets may also contain fluxes to aid smelting.
Pellets are used in blast furnaces as an alternative to
lumps, fines and sinter
Size standardization – uniform size range which is
between 8-18mm 63-68% iron content
A high and uniform porosity of 25-30% allows fast
reduction and high metallization rates
High and uniform mechanical strength, even
under thermal stress in reducing atmospheres
Easy handling and transportation- it has lower
degradation under abrasive influences and thus it is
more transportable. It has also good resistance to
disintegration
Approx. 35-40% less heat required than sintering
Uniform chemical composition & very low loss on
ignition
Pellets Why pelletize?
M&M overview: basics, key definitions, value chain
Source: Mineral Engineering Technical Services report; ADL analysis
16
This is how the typical overall value chain looks like
Pit value chain Mill value chain
M&M overview: basics, key definitions, value chain
Source: ADL analysis
PlanningDrilling
blastingExcavation Haulage Railroad Crushing
Benefi-
ciation
Pelleti-
zing
17
Iron ore – open pit mining value chain: Pit Value Chain
M&M overview: basics, key definitions, value chain
PlanningDrilling
blastingExcavation Haulage
Production
GoalExplore and find ore with enough
iron content, plan pit shape to
extract ore of a quality needed
Break up ore to make it soft
enough for excavation, crush the
ore
Load ore into the truck. Separate
ore from topsoil and other waste,
not allow big stones to go into
production
Transport ore or topsoil to the
assigned destinations
Key
competences
Geological testing, mine process
planning, pit shape design, road
building
Drilling, explosives loading,
blasting, coordination with
planning, equipment service and
repair
Rock breaking, excavation,
loading, equipment service and
repair
Truck alignment, truck service
and repair
1 2 3 4
PreparationDrill planning Truck checksProspecting1a 2a 3a 4a
Excavation
site assessmentExploration
Drill bench
preparationLoading and trucking1b 2b 3b 4b
ExcavationDrilling Ore quality checkMine planning1c 2c 3c 4c
Future drill
bench preparationBuilding the pit
Loading the
explosivesWaste stockpiling1d 2d 3d 4d
Defining extent &
value of ore body
People and
equipment evacuation
Dry magnetic
separation1e 2e 4e
Drilling site
preparationBlasting Lump ore stockpile1f 2f 4f
Source: ADL analysis
18
Iron ore – open pit mining value chain: Mill Value Chain
Railroad Crushing Beneficiation Pelletizing
Production
GoalTransport ore long-distance to
further processing
Break the ore into small pieces
for further processing and
screening them for desired size
Produce iron concentrate of 68%
by removing non-ore particles
from material
Produce and harden pellets of the
right size that could be efficiently
transported and used in steel
making
Key
competencesRailway building, locomotive
service and repair
Crushing, screening, equipment
service and repair
Grinding, magnetic separation,
desliming, tail management,
equipment service and repair
Agglomeration, screening firing,
equipment service and repair
5 6 7 8
MillingPrimary crushing FilteringDump car arrival
& loading5a 6a 7a 8a
Wet magnetic
separation
Loading quality check
& transportationSecondary crushing
Raw material
preparation5b 6b 7b 8b
ClassificationGrinding AgglomerationUnloading5c 6c 7c 8c
DeslimingGrinding Screening6d 7d 8d
Firing8eWaste management7e
Thickening7f
M&M overview: basics, key definitions, value chain
Source: ADL analysis
19
Pit Value Chain starts with planning
Source: ADL analysis
M&M overview: basics, key definitions, value chain
Drilling
blastingExcavation Haulage
Production
GoalExplore and find ore with enough
iron content, plan pit shape to
extract ore of a quality needed
Break up ore to make it soft
enough for excavation, crush the
ore
Load ore into the truck. Separate
ore from topsoil and other waste,
not allow big stones to go into
production
Transport ore or topsoil to the
assigned destinations
Key
competences
Geological testing, mine process
planning, pit shape design, road
building
Drilling, explosives loading,
blasting, coordination with
planning, equipment service and
repair
Rock breaking, excavation,
loading, equipment service and
repair
Truck alignment, truck service
and repair
2 3 4
PreparationDrill planning Truck checksProspecting1a 2a 3a 4a
Excavation
site assessmentExploration
Drill bench
preparationLoading and trucking1b 2b 3b 4b
ExcavationDrilling Ore quality checkMine planning1c 2c 3c 4c
Future drill
bench preparationBuilding the pit
Loading the
explosivesWaste stockpiling1d 2d 3d 4d
Defining extent &
value of ore body
People and
equipment evacuation
Dry magnetic
separation1e 2e 4e
Drilling site
preparationBlasting Lump ore stockpile1f 2f 4f
Planning1
PlanningDrilling
blastingExcavation Haulage
20
1a 1b 1c
Planning: Before the mining job starts
Source: ADL analysis
M&M overview: basics, key definitions, value chain
Prospecting Exploration Mine planning
Requirement is to have a mental image of the
target—the deposit being sought
A fundamental aspect of ore search revolves
around the question of where ores were
formed and what is their style of occurrence.
Search for deposits should be done for surface
indications of ore mineralization by
– Air – aerial photography, satellite
imagery
– Surface – ground geology, geophysics
(magnetic, electromagnetic, gravity)
– Spot anomaly, analysis and evaluate
– Explorational models
Goal is to define the extent & value of ore
body
Geologic maps and geologic mapping are
fundamental to exploration. They provide the
basis for recognizing geologic target conditions
Use exploration methods including sample
drilling or excavation for
– Estimating tonnage & grade
– Valuing the deposit
Laboratory support is needed for sample
analysis
Greenfields exploration – virgin/under
explored terrain, high risk, high cost
Brownfields exploration – near mine
exploration, lower risk, lower cost
Sophisticated techniques and software are
used to model the ore body and plan the pit
size, depth and layout
Appropriate mining technique is selected
Infrastructure requirements are finalized
– Size and balance of mining equipment
fleet
– Scale of processing and treatment plants
– Sources of energy and water
– Logistics issues
Long-term plan of a pit is done either
internally or externally
Pit sizes and shape could be determined by
local regulator
PlanningDrilling
blastingExcavation Haulage
21
Planning: Pit planning and drilling preparation
Source: ADL analysis
M&M overview: basics, key definitions, value chain
1d 1e 1fBuilding the pitDefining extent of ore
body in a specific pit area
Drilling site
preparation
Clearing the site of trees and shrubs
and then removing the stumps and
roots
Installing erosion and sediment
controls
Building ditches, diversions, terraces,
and down drains.
Installing mining lighting if necessary
Building roads
Building other necessary infrastructure
(rail, ports, processing mills)
Sample/pattern drilling and/or
excavation on a pre-determined grid
spacing is done to more accurately
delineate ore reserves
Estimating possible tonnage, grade of
ore, amount of topsoil, strip ratio from
specific place in the pit
Communication with mine operations
to be done for further planning
Levering the ground in the pit with
graders
Building and levering path for drill
machines
Clearing the bench
PlanningDrilling
blastingExcavation Haulage
22
Strip ratio is an important parameter for every pit
Source: Open Pit Mining 101: What You Need To Know, Goldman Sachs; ADL analysis
M&M overview: basics, key definitions, value chain
PlanningDrilling
blastingExcavation Haulage
The strip ratio refers to the amount of additional waste material that must be
removed in order to provide a ton of ore to the processing plant.
Because of the vertical advance of a pit downwards, all the material from a
bench must be removed before the following bench can be excavated.
Material classified as ore by definition has sufficient mineral abundance to
generate a notional profit when allowing for mining, processing and
administration charges.
The strip ratio is an inherent and unique parameter of each mine, which can
greatly impact the cost (and therefore profitability) of extracting ore.
Intrinsic continuity/complexity of the mineralization
– Unique for every ore body
The overall pit slope
– Not only ore should be moved but also material surrounding it
– Pit designs are driven by profit optimization process
– Given an average mine life is greater than five years the economics of a
project can change substantially during that time and so will pit design
Strip ratio
Factors driving strip ratio
23
Ore body
1
5
43
21
5
4
3
2
1
5
4
3
2Stripping
volume
Time
Ore body
Stripping
volume
Time
11
7
5
4
3
2
6
5
4
3
2
6
7
1
5
4
3
2
6
7
Ore body
1
6
4
3
2
1
6
5
4
3
21
7
54
3
2
65
Stripping
volume
Time
Dis
ad
va
nta
ges
Ad
van
tages
Meth
od Each bench of ore is mined in sequence, and
all the waste on the particular bench is
removed to the pit limit
The operating working space available
All equipment n the same level
No contamination from waste blast above
the ore
Equipment requirements are at minimum
towards the end of the mine’s life
Overall operating costs are a maximum
during the initial years of operation when
maximum repayment of capital
The working slopes of the waste faces are
essentially maintained parallel to the overall
pit slope angle
Allows for maximum profit in the initial
years of operation and greatly reduces the
investment risk in waste removal for ore to
be mined at a future date
There is an impracticality of operating a
large number of stacked, narrow benches
simultaneously to meet production needs
Waste is removed at a rate approximated
by the overall stripping ratio. The working
slope of the waste faces starts very shallow,
but increases as mining depth increases
From an advantage and disadvantage point
of view, this method is a compromise that
removes the extreme conditions of the
former two stripping methods.
Equipment fleet size and labor requirements
throughout the project life are relatively
constant
Strip ratio impacts profit significantly: 3 mining methods
Source: SME Mining Engineering Handbook; ADL analysis
M&M overview: basics, key definitions, value chain
Declining stripping ratio
method
Increasing stripping ratio
method
Constant stripping ratio
method
PlanningDrilling
blastingExcavation Haulage
24
Ore is extracted by drilling and blasting
Source: ADL analysis
M&M overview: basics, key definitions, value chain
PlanningDrilling
blastingExcavation Haulage
Excavation Haulage
Production
GoalExplore and find ore with enough
iron content, plan pit shape to
extract ore of a quality needed
Load ore into the truck. Separate
ore from topsoil and other waste,
not allow big stones to go into
production
Transport ore or topsoil to the
assigned destinations
Key
competences
Geological testing, mine process
planning, pit shape design, road
building
Rock breaking, excavation,
loading, equipment service and
repair
Truck alignment, truck service
and repair
3 4
Preparation Truck checksProspecting1a 3a 4a
Excavation
site assessmentExploration Loading and trucking1b 3b 4b
Excavation Ore quality checkMine planning1c 3c 4c
Future drill
bench preparationBuilding the pit Waste stockpiling1d 3d 4d
Defining extent &
value of ore body
Dry magnetic
separation1e 4e
Drilling site
preparationLump ore stockpile1f 4f
Planning1Drilling
blasting
Break up ore to make it soft
enough for excavation, crush the
ore
Drilling, explosives loading,
blasting, coordination with
planning, equipment service and
repair
2
Drill planning2a
Drill bench
preparation2b
Drilling2c
Loading the
explosives2d
People and
equipment evacuation 2e
Blasting2f
25
Iron ore is extracted and fragmented by
drilling and blasting: Drilling part
Source: SME Mining Engineering; ADL analysis
M&M overview: basics, key definitions, value chain
2a 2b 2cDrill planning Drilling
Mine surveyors manage the pit drill
map
Pit is examined
Drill holes are surveyed and laid out
Distance between holes is planned to
be around 6-10 meters depending on
soil hardness
Bench is cleaned by excavator and
levered by bulldozer
Power lines are built in case electrical
drills are used
Drills are transported to the drill site
Drilling speed varies around 5-10 m
per minute
One to two people operate a drill
Holes drilled are 10-20 meter deep
usually drilled in a single pass
After drilling is done hole length and
drilling quality to be examined
PlanningDrilling
blastingExcavation Haulage
Drill bench
preparation
26
Iron ore is extracted and fragmented by
drilling and blasting: Blasting part
Source: SME Mining Engineering; ADL analysis
M&M overview: basics, key definitions, value chain
PlanningDrilling
blastingExcavation Haulage
2d 2e 2fLoading the explosives Blasting
Liquid explosives are usually used
Special trucks load explosives into the
drill holes
Filling with explosives is done from the
bottom of the hole to avoid air jams
Detonators should be installed in a
way to maintain the desired firing
order and time
Power lines in the blast area are
dismantled
Equipment is evacuated to the safe
part of the pit, Evacuation distance
depends on the amount of blasting,
company's policies and regulation
People are evacuated from the pit
Blast!!!
Mine surveyors check the blasting
results determining ore and waste soil
Reblasting is needed sometimes if the
blast quality is not good enough
Depending on the blast results check
excavator operator could assign
destination to trucks when haulage
starts
People and
equipment evacuation
27
Drill holes for explosives used to break rock prior to excavation
Most drills are diesel, however there are several electrical models
The drilling of large diameter holes is done predominantly with
rotary blast hole drills
High pulldown loads require a heavy tower structure
Main Players What it is typically used for and how
After acquisition
of Bucyrus in mid
July 2011
Prices range from $2.5m to $5m
Open pit drilling: equipment overview
M&M overview: basics, key definitions, value chain
Source: Companies' brochures; ADL analysis
PlanningDrilling
blastingExcavation Haulage
28
Most companies offer a complete range of products including
– Different types of detonators (non-electric, electric, electronic)
– Explosives bulk system
– Explosives delivery systems
– Blast based services – systems that manage the blasting from
blast planning to assessing blasting results
Explosives are delivered to the drill hole by Mobil Manufacturing
Units (MMUs) and either pumped or augerered inside the hole
Explosives could sensitized – filled with air bubbles or other agent
and non-sensitized
Depending on explosives type and weather conditions explosives
can stay inside the hole before blasting up to 3-4 weeks
Explosives solutions overview
Main Players What it is typically used for and how
M&M overview: basics, key definitions, value chain
Source: Companies' brochures; ADL analysis
PlanningDrilling
blastingExcavation Haulage
29
Excavators load ore into trucks
Source: ADL analysis
M&M overview: basics, key definitions, value chain
PlanningDrilling
blastingExcavation Haulage
Haulage
Production
GoalExplore and find ore with enough
iron content, plan pit shape to
extract ore of a quality needed
Transport ore or topsoil to the
assigned destinations
Key
competences
Geological testing, mine process
planning, pit shape design, road
building
Truck alignment, truck service
and repair
4
Truck checksProspecting1a 4a
Exploration Loading and trucking1b 4b
Ore quality checkMine planning1c 4c
Building the pit Waste stockpiling1d 4d
Defining extent &
value of ore body
Dry magnetic
separation1e 4e
Drilling site
preparationLump ore stockpile1f 4f
Planning1Drilling
blasting
Break up ore to make it soft
enough for excavation, crush the
ore
Drilling, explosives loading,
blasting, coordination with
planning, equipment service and
repair
2
Drill planning2a
Drill bench
preparation2b
Drilling2c
Loading the
explosives2d
People and
equipment evacuation 2e
Blasting2f
Excavation
Load ore into the truck. Separate
ore from topsoil and other waste,
not allow big stones to go into
production
Rock breaking, excavation,
loading, equipment service and
repair
3
Preparation3a
Excavation
site assessment3b
Excavation3c
Future drill
bench preparation3d
30
Site is cleaned by
bulldozers and graders
Road us built or
repaired if necessary to
give access to drill
machines
Soft material will be
fragmented more by the
cutting action of the loading
machine
Material is loaded into
arriving trucks
The bigger the shovel and
truck the more effective
the excavation process
Most effective is loading
truck with 2-4 passes
Road is rebuilt after the
blast
Power lines are rebuilt in
case electrical excavators
are used
Excavator check is
performed
Excavator is transported to
the site
Boarders of excavator job
are determined
Big stones are taken away
Topsoil and other waste is
loaded by excavator and
removed by trucks
Excavation process overview
Source: ADL analysis
M&M overview: basics, key definitions, value chain
PlanningDrilling
blastingExcavation Haulage
PreparationExcavation site
assessmentExcavation
Future drill
bench preparation3a 3b 3c 3d
31
Excavation in pictures
Source: ADL analysis
M&M overview: basics, key definitions, value chain
PlanningDrilling
blastingExcavation Haulage
Electric shovel removes big
stones from excavation siteElectric shovel bucket
Shovel crushes mining material
with the bucket
Shovel loads the bucketShovel loads
material into truckExcavation site from above
32
What it is typically used for and how
Acquired Bucyrus in July
2011 to get full line of
electric and hydraulic
shovels
Prices range from $3m to $12m
Hydraulic shovels overview
M&M overview: basics, key definitions, value chain
Source: Companies' brochures; ADL analysis
PlanningDrilling
blastingExcavation Haulage
A mining shovel is a specialized piece of heavy excavating
equipment typically used to dig and load ore
Shovels used in iron ore mining are hydraulic (mostly
diesel operated) and electric
In 1997 hydraulic excavators matched electric shovels for
the first time in annual bucket capacity shipped. The ratio
is now 3 or 4 to 1 in favor of hydraulics
Main Players
33
Trucks take ore to the mill, conveyor or rail
Source: ADL analysis
M&M overview: basics, key definitions, value chain
PlanningDrilling
blastingExcavation Haulage
Production
GoalExplore and find ore with enough
iron content, plan pit shape to
extract ore of a quality needed
Key
competences
Geological testing, mine process
planning, pit shape design, road
building
Prospecting1a
Exploration1b
Mine planning1c
Building the pit1d
Defining extent &
value of ore body1e
Drilling site
preparation1f
Planning1Drilling
blasting
Break up ore to make it soft
enough for excavation, crush the
ore
Drilling, explosives loading,
blasting, coordination with
planning, equipment service and
repair
2
Drill planning2a
Drill bench
preparation2b
Drilling2c
Loading the
explosives2d
People and
equipment evacuation 2e
Blasting2f
Excavation
Load ore into the truck. Separate
ore from topsoil and other waste,
not allow big stones to go into
production
Rock breaking, excavation,
loading, equipment service and
repair
3
Preparation3a
Excavation
site assessment3b
Excavation3c
Future drill
bench preparation3d
Haulage
Transport ore or topsoil to the
assigned destinations
Truck alignment, truck service
and repair
4
Truck checks4a
Loading and trucking4b
Ore quality check4c
Waste stockpiling4d
Dry magnetic
separation4e
Lump ore stockpile4f
34
Important value driver.
The time to perform truck checks and
consequences of car breakdown have
huge impact on truck availability and
consequently on utilization and
productivity
Truck is aligned with the excavator
Loading is done by excavator
Truck driver is assigned with final
destination (topsoil to the storage or
to the ore quality check)
Assignment could be done
automatically by mine management
system or by operator
Truck stops under special mechanism
to check the ore quality
Check is based on magnetic properties
of ore
Depending on the ore quality the place
of truck unloading is determined
This could be waste stockpile,
magnetic separation machine or lump
ore stockpile
Trucking process overview (I)
Source: ADL analysis
M&M overview: basics, key definitions, value chain
PlanningDrilling
blastingExcavation Haulage
4a 4b 4cTruck checks Ore quality checkLoading and haulage
35
Trucking process overview (II)
Source: ADL analysis
M&M overview: basics, key definitions, value chain
For top soil or low quality ore truck is
redirected to the waste stockpile
Stockpiles are determined by mine
plan
After unloading truck returns to the
pit
For below average quality ore truck is
unloaded at dry magnetic separation
station
Ore is crushed, screened and than dry
magnetic separation takes place
After processing ore unloaded by
conveyor belt to the lump ore
stockpile, while waste is removed to
the waste stockpile
Could be performed immediately after
excavation or at the mill
Ore in unloaded from the truck or
transported from dry magnetic
separation machine
Ore during unloading is mixed in a way
to maintain average amount of iron in
% to keep ore quality constant for mill
processing
PlanningDrilling
blastingExcavation Haulage
4d 4e 4fWaste stockpiling Lump ore stockpileDry magnetic
separation
36
Trucks are used to carry ore from the pit to the mill or
transportation station
Mining trucks are often the largest portion in terms of $ spent per
ton of ore processed of
equipment spending in a mine
Truck maintenance and repair are among the main issues in open
pit mining
Prices range from $1m to $6m
Trucks overview
Main Players What it is typically used for and how
M&M overview: basics, key definitions, value chain
Source: Companies' brochures; ADL analysis
PlanningDrilling
blastingExcavation Haulage
37
Railway is one of the ways to transport ore to the mill
Source: ADL analysis
M&M overview: basics, key definitions, value chain
Crushing Beneficiation Pelletizing
Production
GoalTransport ore long-distance to
further processing
Break the ore into small pieces
for further processing and
screening them for desired size
Produce iron concentrate of 68%
by removing non-ore particles
from material
Produce and harden pellets of the
right size that could be efficiently
transported and used in steel
making
Key
competencesRailway building, locomotive
service and repair
Crushing, screening, equipment
service and repair
Grinding, magnetic separation,
desliming, tail management,
equipment service and repair
Agglomeration, screening firing,
equipment service and repair
6 7 8
MillingPrimary crushing FilteringDump car arrival
& loading5a 6a 7a 8a
Wet magnetic
separation
Loading quality check
& transportationSecondary crushing
Raw material
preparation5b 6b 7b 8b
ClassificationGrinding AgglomerationUnloading5c 6c 7c 8c
DeslimingGrinding Screening6d 7d 8d
Firing8eWaste management7e
Thickening7f
Railroad5
Railroad Crushing Beneficiation Pelletizing
38
Railroad considerations
Railways is very capital intensive way of transportation
Only long term operations can support railway building
Loading station location is important because relocation
takes time and is expensive
Additional step of unloading from the truck and loading into
dump car is needed
Steep inclines with railways are not possible
Most mines do not use rail transportation to the mill
Best practice is to have in pit crusher and use conveyor belt
for pit to mill ore transportation
Railway is widely used to transport ore long distances to the
port
Railroads are widely used in mining in CIS
Railroad transportation: process overview
Source: ADL analysis
M&M overview: basics, key definitions, value chain
Locomotive with dump cars arrives
to the mill
Ore is unloaded directly into the
crushing machine
Ore is loaded into the dump car by
excavator or front loader
Quality of ore loading should be checked
Very important not to overload the
dump car and load it evenly to avoid
overturning of the dump car on its way
Ore loading is checked
Locomotive transports ore to the
mill
Railroad Crushing Beneficiation Pelletizing
5a 5b 5c
Dump car arrival
and loadingOre unloading
Ore quality check
and transportation
Best practice
39
Railroad transportation in pictures
Source: ADL analysis
M&M overview: basics, key definitions, value chain
Railroad Crushing Beneficiation Pelletizing
Train arrives
to the loading place
Shovel loads ore into the dump car
Wheel loaders are also used for that
Shovel loads ore into the dump car
Wheel loaders are also used for that
There could be many train lines on
different levels in different parts of the pitOre on a way to the mill Ore unloading into crusher
40
Railroad5
Ore should be crushed before beneficiation
Source: ADL analysis
M&M overview: basics, key definitions, value chain
Railroad Crushing Beneficiation Pelletizing
Beneficiation Pelletizing
Production
GoalTransport ore long-distance to
further processing
Produce iron concentrate of 68%
by removing non-ore particles
from material
Produce and harden pellets of the
right size that could be efficiently
transported and used in steel
making
Key
competencesRailway building, locomotive
service and repair
Grinding, magnetic separation,
desliming, tail management,
equipment service and repair
Agglomeration, screening firing,
equipment service and repair
7 8
Milling FilteringDump car arrival
& loading5a 7a 8a
Wet magnetic
separation
Loading quality check
& transportation
Raw material
preparation5b 7b 8b
Classification AgglomerationUnloading5c 7c 8c
Desliming Screening7d 8d
Firing8eWaste management7e
Thickening7f
Crushing
Break the ore into small pieces
for further processing and
screening them for desired size
Crushing, screening, equipment
service and repair
6
Primary crushing6a
Secondary crushing6b
Grinding6c
Grinding6d
41
Crushing: process overview
Source: ADL analysis
M&M overview: basics, key definitions, value chain
Railroad Crushing Beneficiation Pelletizing
Particles reduced to
several mm in size
After fine crushing final
screening takes place
Small enough particles
are transported by
conveyor belt to
beneficiation plant
Vibrating screens are used
for screening
Several stages of screening
is used to make the whole
process more effective
Big particles are separated
from small particles
Small enough particles are
sent for further processing
Big particles are send back
for recrushing
Cone crusher is used for
primary crushing
Unloading could be done
directly from the dump car into
crusher
Big particles (more than 1-1.5
meters) should be avoided as
they could damage the crusher
Primary crushing produces
particles of 150mm from
size of up to 1200mm
One cone (crusher main spare
part) could be used to crush
around 4 million tons, after
which it should be changed
Cone or jaw crushers are
used here
Secondary crushers are less
productive because of more
fine crushing, so more of
them should be used to
process same amount of ore
Transportation is done by
conveyor belt
Particles of size up to
200 mm are crushed to
the particles of size 50
mm
Primary
crushing
Secondary
crushingScreening Fine crushing6a 6b 6c 6d
42
Crusher is a piece of equipment that is used to reduce the intensity of solid
materials by using the external force to overcome the cohesion between
solid materials' molecules.
Mobile crushers are usually used on the pit and crushed material is
transported by conveyor belt to the mill, while stationary crushers are
installed at the mill.
There are several types of crushers that are used for different types of
material and during different stages of crushing. Among other types there
gyratory, cone, jaw, vertical impact and roll crushers
Screens separate a flow of material into grades, these grades are then either
further processed or go back to another stage of crushing
There are several types of screens used for different purposes
Main Players
Crusher vary from $1m to $6m depending on
type, size, capacity and specification
Crushers & screens overview
What it is typically used for and how
M&M overview: basics, key definitions, value chain
Source: Companies' brochures; ADL analysis
Railroad Crushing Beneficiation Pelletizing
43
Beneficiation increases iron content to 68-70%
Source: ADL analysis
M&M overview: basics, key definitions, value chain
Railroad Crushing Beneficiation Pelletizing
Railroad5 Pelletizing
Production
GoalTransport ore long-distance to
further processing
Produce and harden pellets of the
right size that could be efficiently
transported and used in steel
making
Key
competencesRailway building, locomotive
service and repair
Agglomeration, screening firing,
equipment service and repair
8
FilteringDump car arrival
& loading5a 8a
Loading quality check
& transportation
Raw material
preparation5b 8b
AgglomerationUnloading5c 8c
Screening8d
Firing8e
Crushing
Break the ore into small pieces
for further processing and
screening them for desired size
Crushing, screening, equipment
service and repair
6
Primary crushing6a
Secondary crushing6b
Grinding6c
Grinding6d
Beneficiation
Produce iron concentrate of 68%
by removing non-ore particles
from material
Grinding, magnetic separation,
desliming, tail management,
equipment service and repair
7
Milling7a
Wet magnetic
separation7b
Classification7c
Desliming7d
Waste management7e
Thickening7f
44
Beneficiation: process overview (I)
Source: ADL analysis
M&M overview: basics, key definitions, value chain
Railroad Crushing Beneficiation Pelletizing
Ore is moved to a grinder to
make a right consistent size for
further beneficiation process
Water is added at the stage
Grinded ore is easier to beneficiate
Several stages of grinding are usually
undertaken during beneficiation
process to make sure that all ore is
evenly grinded
Magnetic separators exploit the
difference in magnetic properties
between the ore minerals and are used
to separate magnetic mineral
from non-magnetic gangue
Water is added at this stage
Several stages of wet magnetic
separation are used between grinding,
classification and desliming procedures
Particles are classified according
to their size several times
Hydro cyclones are used for
classification
The oversize material is returned to
the grinding, while the undersize
proceeds to beneficiation steps
7a 7b 7cGrinding ClassificationWet magnetic separation
45
Beneficiation: process overview (II)
Source: ADL analysis
M&M overview: basics, key definitions, value chain
Railroad Crushing Beneficiation Pelletizing
The goal of desliming is to
remove slimes from larger
particles with the aid of water
sprays
The process is based on a physical law
stating that particles of different sizes
sink with different speed
All the waste goes into tails
Water is added in the process
Waste from magnetic separation
and desliming includes tailings
that consist mostly of silicate rock
Ore content in tailing is measured to
make sure that it is not too high
These wastes are usually pumped into
special natural or human built tailing
impoundments
Final concentrate travels to
thickeners
Main goal of thickening is
removing water
The underflow from the thickeners is
pumped to a concentrate storage tank
On exit product contains
approximately 67% of iron and 9% of
water
7d 7e 7fDesliming ThickeningWaste management
46
Beneficiation process in pictures
Source: ADL analysis
M&M overview: basics, key definitions, value chain
Railroad Crushing Beneficiation Pelletizing
Grinder Sketch of magnetic separator operation
Beneficiation mill Magnetic separators in operation
47
Mills are used to mill ore into small particles to allow further
processing
Ball mills: use metallic balls as grinding media, suitable for
regrinding or final grinding
Autogenous (AG) mills – do not need balls; use crushed ore as
grinding media; suitable for any stage of grinding
Semi autogenous (SAG) mills use both balls and ore as grinding
media, suitable for any stage of grinding
Rod mills use rods as grinding media. Suitable for final grinding
producing excellent results, however they need fine input
Main Players What it is typically used for and how
Grinder prices vary a lot from $1-2m to $10-12m
for AG/SAG mills depending on type, size,
capacity and specification
Grinding mills overview
M&M overview: basics, key definitions, value chain
Source: Companies' brochures; ADL analysis
Railroad Crushing Beneficiation Pelletizing
48
Pellets are fired to get necessary strength and qualities
Source: ADL analysis
M&M overview: basics, key definitions, value chain
Railroad Crushing Beneficiation Pelletizing
Railroad5
Production
GoalTransport ore long-distance to
further processing
Key
competencesRailway building, locomotive
service and repair
Dump car arrival
& loading5a
Loading quality check
& transportation5b
Unloading5c
Crushing
Break the ore into small pieces
for further processing and
screening them for desired size
Crushing, screening, equipment
service and repair
6
Primary crushing6a
Secondary crushing6b
Grinding6c
Grinding6d
Beneficiation
Produce iron concentrate of 68%
by removing non-ore particles
from material
Grinding, magnetic separation,
desliming, tail management,
equipment service and repair
7
Milling7a
Wet magnetic
separation7b
Classification7c
Desliming7d
Waste management7e
Thickening7f
Pelletizing
Produce and harden pellets of the
right size that could be efficiently
transported and used in steel
making
Agglomeration, screening firing,
equipment service and repair
8
Filtering8a
Raw material
preparation8b
Agglomeration8c
Screening8d
Firing8e
49
Pelletizing: process overview
Source: ADL analysis
M&M overview: basics, key definitions, value chain
Railroad Crushing Beneficiation Pelletizing
Pellets are screened
by roller screens for
separating undersized
and oversized pellets
to meet the size
specification
Undersized or oversized
pellets crushed and
returned to the balling
drums
Agglomeration is a process
when concentrate forms soft
pellets in a way snow sticks
together
Green pellets are formed either
in pelletizing discs or drums.
Drums are usually being
connected to roller screens used
for separating undersized pellets
which are returned to the drum.
Green pellet size can be precisely
adjusted by varying the
circumferential speed, feed or
water addition rates.
Desired size is 6-14mm
Disc filters are used to
dewater concentrate after
thickening procedure
Dewatering is needed for
further processing
Moisture content in
concentrate after disc vacuum
filter is around 9-11%
Pellet mass is prepared by
mixing ore with agents and
sometimes water
Small amounts of binding
agents such as bentonite
(approximately 0.5 %) help
formation of the pellet
Limestone, olivine and
dolomite (1–5 %) give the
pellets the proper physical and
metallurgical properties
needed in further processing.
Proportions should eb
maintained to avoid over or
under agglomeration
FilteringRaw material
preparationAgglomeration Screening8a 8b 8c 8d
50
Pelletizing in pictures
Source: ADL analysis
M&M overview: basics, key definitions, value chain
Railroad Crushing Beneficiation Pelletizing
Flow of grate-kiln-cooler
system
Flow of straight grate
system
Cross sectional sketch
of rotary kiln
Empty gratesPellets loaded into wagons
for shipping
Ready pellets on conveyor
belt
51
Only 6 out of 87 metal elements are "non-ferrous metals"Overview of main metal groups within standard periodic table
Source: research
M&M overview: basics, key definitions, value chain
Non-metal or unknown
chemical propertiesMetalloids
Non-ferrous
metals
Refractory
metals
Platinum
group metals
Rare earth
metalsOther metals
Focus of this presentation
57–71
89–103
1
H
34
Se
35
Br
36
Kr
15
P
16
S
17
Cl
18
Ar
6
C
7
N
8
O
9
F
10
Ne
2
He
53
I
54
Xe
85
At
86
Rn
114
Uuq
115
Uup
116
Uuh
117
Uus
118
Uuo
32
Ge
33
As
14
Si
5
B
51
Sb
52
Te
84
Po
Nickel
28 Ni
Copper
29 Cu
Zinc
30 Zn
Alumi-
nium
13 Al
Tin
50 SnLead
82 Pb
Niobium
41 Nb
Molyb-
denum
42 MoTantalum
73 Ta
Tungsten
74 W
Rhenium
75 Re
Ruth-
enium
44 Ru
Rhodium
45 Rh
Palla-dium
46 Pa
Osmium
76 Os
Iridium
77 Ir
Platinum
78 Pt
Scandium
21 Sc
Yttrium
39 Y
Lath-anum
57 La
Praseo-
dymium
59 Pr
Cerium
58 Ce
Neo-dymin
60 NdSama-rium
62 Sm
Prome-
thium
61 Pm
Europium
63 Eu
Terbium
65 Tb
Gado-
linium
64 Gd
Dyspro-
sium
66 Dy
Erbium
68 Er
Holmium
67 Ho
Ytterbium
70 Yb
Thilium
69 Tm
Lutetium
71 Lu
3
Li
11
Na
19
K
37
Rb
55
Cs
87
Fr
4
Be
12
Mg
20
Ca
38
Sr
56
Ba
88
Ra
22 Ti
40
Zr
23
V
24
Cr
25
Mn
26
Fe
27
Co
31
Ga
43
Tc
47
Ag
48
Cd
49
In
72
Hf
79
Au81 Tl
83
Bi
104
Rf
105
Db
106
Sg
107
Bh
108
Hs
109
Mt
110
Ds
111
Rg
89
Ac
90
Th
91
Pa
92
U
93
Np
94
Pu
95
Am
96
Cm
97
Bk
98
Cf
99
Es
100
Fm
101
Md
102
No
103
Lr
Lanthanides
Actinides
113
Uut
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
1
2
3
4
5
6
7
Period
Group
80
Hg
112
Cn
52
Non-ferrous metal value chain can be broken into four steps
1. Chemical compounds such as oxides, chlorides, sulfates, carbonates with metal content between 30 and 60% depending on purity and type of compound
Source: research and analysis
M&M overview: basics, key definitions, value chain
Wire rods
Billets
Ingots
Slabs
Cables
Wheels
Packages
Automotive and aerospace
Commercial transportation
Mining/recycling Metal productionEnd product
manufacturing
Metal processing
Primary Secondary
Aluminum
Copper
Nickel
Zinc
Lead
Tin
Cu concentrate
(30–40% Cu)
Ni concentrate
(10–20% Ni)
Zn concentrate
(~50% Zn)
Copper cathode
Ferronickel (20–26% Ni)
Nickelmatte (70–75% Ni)
Nickel metal
Nickel salts1
Zinc cathode
Wire rods
Billets
Cakes
Ingots
Copper wires
Tubes/rods/bars
Plates/sheets/strip
Alloys (e.g., brass,
bronze)
Electrical motors
Electronics
Cables
Plumbing
Ingots, sheets, pellets, powder
High-purity Nickel salts1
Stainless steel
Various alloys
Electroplated steel
Galvanized steel
Galvanized alloys
Slabs
Ingots
Alloys (e.g., brass)
Aluminum cathode Bauxite concentrate
(~60% Al)
Pb concentrate
(50-60% Pb)
Sn concentrate
(~60% Sn)
Lead cathode
Tin cathode
Rods and wires
Ingots
Rods and wires
Ingots
Alloys (e.g., bronze)
Batteries
Cable
Pipes
Sheets
Radiation shields
Pipes and figures
Coins
Sheets
Aluminium wires
Tubes/rods/bars
Plates, sheets, strip
53
Mining: Non-Ferrous ores often contain other metals
Source: USGS minerals yearbooks 2010; research and analysis
M&M overview: basics, key definitions, value chain
Aluminum (Al)
Copper (Cu)
Nickel (Ni)
Zinc (Zn)
Lead (Pb)
Tin (Sn)
Gold, Silver
Cobalt (in African copperbelt)
Iron, Cobalt, Carbon
Copper, Lead, Iron
Zinc, Silver, Copper
Excluding
secondary refining
Mining: Australia, China, Brazil
Refining: China, Russia, Canada
Mining: Chile, African Copperbelt, SEA
Refining: China, African Copperbelt, Japan
Mining: Indonesia, Australia, Canada
Refining: China, Japan, Australia
Mining: China, Peru, Australia
Refining: China, Canada, Japan
Mining: China, Australia, US
Refining: China, Australia, Canada
Mining: China, Indonesia, Peru
Refining: China, Indonesia, Peru
Metal Often occurring with Top producing countries
54
Description
Processed
metals/ ore
types
Extraction of metals from ores/concentrates
through application of heat
Four main types:
– Smelting (i.e., melting ores),
– Roasting (i.e., oxidizing ores),
– Calcining (i.e., separating ores),
– Refining (removing impurities from metal)
Extraction of metals through application of
chemicals to dissolve material
Three main steps:
– 1. Leaching (i.e., separation of valuable metal
from ore),
– 2. Solution purification (i.e., extraction of
metal from leaching liquid)
– 3. Metal extraction (i.e., final stage of
purification)
Copper (cuprite, azurite, malachite)
Nickel (pentlandite, limonite, garnierite)2
Zinc (hemimorphite, smithsonite)
Aluminium (Karst, silicate)
Copper (chalcopyrite, chalcoite)
Lead (galena, anglesite, cerussite)
Tin (cassiterite)
Zinc (sphalerite)
Non-Ferrous metals: two general types of ore processing
1. Roasting process makes sulfide ores treatable by hydrometallurgical process 2. Typically flowsheet partially pyrometallurgy and hydrometallurgy
Source: research and analysis
M&M overview: basics, key definitions, value chain
PyrometallurgyTraditional route for sulfide ores
HydrometallurgyTraditional route for non-sulfide ores1
55
Metal production: Typical processes from mine to metal (I)
1. SX = Solvent extraction
Source: research and analysis
M&M overview: basics, key definitions, value chain
Aluminium (Al)
Process step
(Resulting) material
Nickel (Ni)
Mining/crushing Calcination Smelting Electrolytic refining
Sodium aluminate Pure alumina Cryolite-alumina Al cathode
Mining/crushing Floatation Smelting SX1/Electrowinning
Sulphide ore Ni concentrate Nickel matte Ni metal
Mining/crushing Leaching Solvent extraction Electrowinning
Non-sulphide ore Leach solution SX raffinate Ni metal
Mining/crushing Floatation Smelting Electrolytic refining
Sulphide ore Cu concentrate Blister/anode Cu cathode
Mining/crushing Leaching Solvent extraction Electrowinning
Oxide/roasted ore Leach solution SX raffinate Cu cathode
Copper (Cu)
Typical process (simplified)Metal
56
Metal production: Typical processes from mine to metal (II)
Source: research and analysis
M&M overview: basics, key definitions, value chain
Zinc (Zn)
Lead (Pb)
Tin (Sn)
Typical process (simplified)Metal
Process step
(Resulting) material
Mining/crushing Floatation Smelting Electrolytic refining
Sulphide ore Zn concentrate Product sinter Zn cathode
Mining/crushing Leaching Solvent extraction Electrowinning
Oxide/roasted ore Leach solution SX raffinate Zn cathode
Mining/crushing Floatation Smelting Electrolytic refining
All ore types Pb concentrate Anode Pb cathode
Mining/crushing Floatation Smelting Electrolytic refining
All ore types Sn concentrate Anode Sn cathode
57
Agenda
2 Minerals & Mining landscape: Basics, Global, Regional and KSA-specific context
2.1 M&M overview: basics, key definitions, value chain
2.2 M&M: Global and Regional trends
2.3 M&M landscape in Saudi Arabia: current state and Strategy 2035
2.4 Q&A: Recap of key messages
58
M&M: Global and Regional trends
What do we plan to cover in this chapter?
M&M: Global and Regional trends
Discuss the Global mining landscape and key numbers
Analyze the major Worldwide trends influencing the Minerals & Mining
sector. Do a specific deep-dive into new technologies and understand how
they affect it.
Understand the Global outlook on the Minerals relevant to the Kingdom
and its Strategy 2035
59
Global Mining landscape: key numbers
M&M: Global and Regional trends
Iron Ore Alumínio
Copper Zinc Nickel Gold
0
4,000
2,000
6,000
Kt
Rusal
3,601
Rio Tinto
3,380 3,361
18% 25%40% 41%
13% 37%31% 40%25% 30%27% 40%
0
200
300
100
295
Mt
BHP
245
Rio TintoVale
Aluminum
2
0
1
3
Glencore
1.226
Mt
1.7371.831
Codelco Freeport-
McMoran
0
100
2,230 Mt
200
300
Kt
Vale
260
MMC Norilsk
Nickel
BHP
154
0.0
1.5
1.0
0.5
1,0731,100
350
Kt
Nyrstar
764
Hindustan
Zinc
Korea Zinc
Group
0.0
2
4
6
Anglogold
Ashanti
Moz
4.9
Barrick
Gold
Newmont
3.63
200
0
100 90
141
BHP
Current Capital Stock (US$ B) – November 2017
Rio TintoVale
53
57,600 Kt
3,100 Mt2,250 Kt11,900 Kt19,400 Kt
%
Top 3
EBITDA1
Margin
285
Worldwide
Production
Top global mining companies (2017)
5.52
Glencore
52Aluminum
Corp. of China
Top 3 companies per ore represented 13-40% of the 2016 worldwide production depending on commodity
60
Worldwide trends of special importance for the mining sector
(we will focus on technology innovation)
M&M: Global and Regional trends
Changes and challenges Explanation
Change in the geographic distribution Shift towards less favorable geographies with higher political risk, less access to
infrastructure and higher logistic requirements
Volatility and cyclicality Increasing flexibility requirements to generate good financial results regardless of cycles
Suppliers cutting back on technology research in downturns
Raw materials and supplies shortage Decreasing tier 1 deposit discovery
Decreasing quality of existing deposits
Increasing water constraints
Constrained energy availability
Limited equipment supply
War for talent Widening processes engineering staff and geoscientists shortage
Increasing importance of brand image
Increasing use of ties to academic bodies and research institutes
Consolidation and M&A wave Increasing M&A activity
Main players are becoming larger
Increasing importance of operating efficiency to remain independent
Technology innovation Further technological innovations expected, driving further productivity increase (specially
by increasing final value)
Increasing environmental pressures Increasing public, legislative & customer pressures
Emerging environmental policies on water & energy consumption, local footprint, CO2
emissions, rehabilitation
Increasing safety & health standards
Changing ways of marketing commodities Ways in which commodities are marketed change significantly
Detailed on the
following slides
61
Consolidation of control room functions in
centralized remote operations centre for real-time
visibility across several operations & optimized labour force
Digital experimentation underway to solve the issues, 6 are particularly relevant
for Minerals & Mining
M&M: Global and Regional trends
Identify ore quality of rocks with sensors to allow sorting out
waste and optimize processing.
Autonomous operations
Ore sensing & sorting 3
Remote monitoring on a specific set of machines
parameters to identify issues early on and achieve optimal
performance
1Remote condition monitoring
Using data collected from sensors & advanced self learning
algorithms to predict when maintenance needed or
optimize process
Predictive analytics2
Remote operations centre4
Increasingly intelligent & complete online shop of equipment,
parts & services that offers extreme ease of ordering for
customers
E-commerce (for equipment, parts & services)5
Use of unmanned vehicles e.g. autonomous trucks, drill
and haul
6
62
Two versions of online vibration monitoring available:
– Basic – Having variety of vibration & temperature sensors &
the system is integrated to also show vibration &
temperatures data
– Advanced – Additional measurement to allow for early failure
detection based on monitoring of irregular process operations
Employing “Collect, Analyze, Act" architecture
Providing an interface to Avantis enterprise asset
management & other plant-wide systems
Schneider acquired Avantis software through the purchase of
Invensys in 2014 and now offering software as a service
Flsmidth providing online
condition monitoring for its gear unit
Schneider offering
Avantis condition manager
“FLSmidth comes to condition monitoring a bit late. I would consider
Schneider being the leader in condition monitoring. They
have the right approach and are quite ahead in implementation.”
Former Global Product Development director, Minerals
Processing, FLSmidth
Remote condition monitoring: best-in-class example is offering integrated
solution
M&M: Global and Regional trends
Source: Company websites, ADL Internal Resource Center, Expert interview, Desktop research
Collect data from
equipment & related
processes
Analyze the data
based on rules defined
with customers
Act upon the results by giving
warnings, notifications or
automated work requests
63
Through predictive analytics, Joy is able to share
rewards with customers through payments based
on the performance of the equipment and the output
of the mine
Schneider’s avantis
Offers integrated predictive solution
Joy global is using
predictive analytics to grow services
Longwall System
contains 7,000 sensors,
which turn into
actionable information
Predictive Analytics: development coming from OEMs, mining companies & start-
ups (1/3)
Avantis PRiSM can diagnose equipment issues days,
weeks or months before failure by recognizing
patterns in sensor data
M&M: Global and Regional trends
Source: International Mining; HBR; Company website
Smart Services
predicts potential
failures in near real
time on components
Performance alerts can
be sent directly to the
machine operator, the
mine control center,
and to the Smart
Services team
Identify issues well before
any traditional value
based alarm would be
raised
Machine
learning is the
key component
needed for
predictive
solutions
64
Predictive Analytics: development coming from OEMs, mining companies & start-
ups (2/3)
Rio Tinto is using predictive analytics to yield savings in maintenance
M&M: Global and Regional trends
Source: Desktop research, expert interview
“We use predictive analytics on our trucks and get 5000-
8000 additional running hours per engine compared
to following manufacturer maintenance schedule. We are
able to know 5-6 months before a machine would
break.”
“We decided to develop the capability ourselves
with data collected as OEMs do not have clear
business model with predictive analytics. OEMs
make money with services and parts, they have no
incentive to lower our maintenance need.”
“If OEMs can sell their products as a service, then
predictive maintenance makes sense instantly.”
Former Head of Innovation, Rio Tinto
RioTinto launched big data Analytics Excellence Centre in 2015
The Centre will assess data collected from sensors & enable
experts to predict and prevent engine breakdowns and
other downtime events
It expects $200 million saving a year over the next three
years in maintenance costs with predictive analytics
65
Predictive Analytics: development coming from OEMs, mining companies & start-
ups (3/3)
Uptake is CO-developing
predictive diagnostic with caterpillarOther starups entering the space
M&M: Global and Regional trends
Source: Desktop research
Caterpillar and Uptake formed partnership in
2014 to develop proprietary software for
predictive diagnostics & optimized fleet
management
The solution expected to yield as much as 90%
reduction in downtime and repair costs from
malfunctioning machine for a customer in Caterpillar
case study
Rapidminer has developed a cloud
platform where machine learning
and analytics techniques can be
applied to various types of data sets
Predikto focuses on delivering end-
to-end predictive analytics SaaS
software for predictive maintenance
and optimization
Mtell is focusing on predictive
maintenance software and analytics
in verticals such as Oil & Gas
66
Remote operations center: both OEMs & mining companies are centralizing
control center
Flsmidth providing
remote control services in minerals
Mining companies are using
remote center to Optimize site operations
M&M: Global and Regional trends
Source: Company websites, Desktop research, ADL Internal Resource Center
Rio Tinto is using a centralized operations centre in Perth to
analyse data and optimize processes of the mines in
Pilbara, Australia
Codelco Mining built a remote operations center in 2015
with the help of Honeywell, indicated to increased
production by 2% and reduced operating costs by
$150M
Control centre in CPH that can remote- monitor equip. in
plants globally via online computer communication with 24/7
support
Services offered free-of-charge to customers with the key
benefit of instant services without travelling time & cost
– Customers can also request Advanced trouble shooting &
Remote maintenance & optimization
However, the monitoring process is still relatively manual –
room for increased automation
“”FLS remote control processes are still pretty manual. They have
lots of knowledgeable people and still rely too much on them. They
should increase the automated calculation loop in the processes to
take out human involvement.”
Former Global Product Development director, Minerals
Processing, FLSmidth
Can you find a nice pic here pls?
67
MINESENSE is developing
fast mineral sensing technology
Ore sensing & sorting: huge value potential with strong investment from OEMs
& start ups
Tomra is partnering with
OEMs & mining companies
M&M: Global and Regional trends
Source: Company websites, Desktop research, ADL Internal Resource Center
Startup company Minesense is developing mineral sensing
technology to identify ore quality in real time with high
frequency electromagnetic spectroscopy and X-ray
The sensing technology can be installed on truck shovels or
conveyor belts
The company has received $17.5M of VC funding to date
Tomra, sorting technology provider, has partnered with Outotec
to provide a turnkey sensor-based sorting solution
released in 2015 to remove waste from the ore feed in
crushing and grinding circuit
Tomra is also working with RioTinto to scale up Rio's iron ore
and copper sorting technologies to have each machine
capable of sorting 1,000 tons of rock per hour
“The “Mine of the Future” will be selective-mining and real-
time ore grade sensing & sorting is in the center of
that.”
Newmont
“There is awful lot of value to be extracted by
optimizing comminution process using better data
on mineral characteristics.”
RioTinto
68
eCommerce: B2B companies are implementing online platforms & piloting with
automatic ordering
In 2014, Wärtsilä launched an online platform:
– My installations - customers can view their installed base
– Parts - customers can view their order history, search for
spares in catalogues and ask for quotations
– Support - customers can browse for technical information,
make a warranty claim or ask for technical support
Symmedia’s “Parts” is an intelligent spare parts store, that links
with operator’s production machines
Based on the machinery data, “Parts” automatically creates an
intelligent shopping cart with order suggestions
– “Parts” can be connected to the ERP system of the
manufacturer
ENGEL Austria, a manufacturer of molding machines, has
partnered with Symmedia & is now offering a complete
service portal for the customers
Wärtsilä´s online services intelligent online shop
M&M: Global and Regional trends
Source: Company website
“Through the online link to the machine our shop knows which parts
of the respective machine ever come into question, and which
have been replaced in the past.“
Vice President, Engel
ENGELs spare parts catalogue uses
the CATALOGCreator® that has a
feature of presenting all spare
parts in 3D
69
Key selected products for Saudi Arabia: how the relevant global markets are
performing and what are the industry perspectives?
M&M: Global and Regional trends
AIuminium
57.6Mt
Phosphate Fertilizers P2O5
~50Mt
Global production (2016)
Note 1 Note 2
Copper
19.4Mt
Note 3
70
Aluminium (Al): strong growth and excellent future perspectives
M&M: Global and Regional trends
Source: Ma’aden report, ADL analysis
AI
57.6Mt
Global
productionRecent price dynamics (past 12 months) Potential future outlook
Global aluminium market
deficit will likely reach around
2 mn tonnes per annum over
the course of 2018-21
Global aluminium demand
CAGR is forecasted at 4-5%
pa over 2017-21 (driven by
advances in end use – Al in
vehicle bodies and enhanced
use of Al in electricity
distribution infrastructure
China to progressively reduce
overcapacity issue – it’s
already actively cutting
production, also due to
declining profitability issue
Aluminium price averaged US$ 2,012/tonne (LME), up 24% vs. Q3 2016
and up 9% vs. Q2 2017
LME prices should be supported by Chinese central government’s supply
reform policies
Note 1
71
Diammonium phosphate [(NH4)2HPO4]: careful optimism
M&M: Global and Regional trends
Source: Ma’aden report, November 2017; ADL analysis
Phosphate fertilizers – P2O5 based fertilizers include Monoammonium Phosphate (MAP), Diammonium Phosphate (DAP), Concentrated Superphosphate (CSP), Superphosphate
(OSP), Ammonium Polyphosphate (APP) and others.
P2O5
50 Mt
Al phosphorous
fertilizers
(monoammonium,
diammonuim and others)
Global
productionRecent price dynamics (past 12 months) Potential future outlook
South America demand was lower due to high inventory levels but Indian
subcontinent demand picked up in Q3 which supported the late Q3
price improvement
On the supply side, US saw supply dip due to Hurricane Irma and limited
Chinese exports
Note 2
Further supply from
Moroccan and Wa’ad Al
Shamal project ramp-ups may
soften prices in the coming
quarters
But there’s a clear future
demand growth of about 2%
over the next 5 years for
phosphorous fertilizers,
however production
capacities are also expanding
with similar pace
72
Copper (Cu): very strong medium-term outlook
M&M: Global and Regional trends
Source: Ma’aden report, Deutsche Bank Markets Research 2017, ADL analysis
Cu
Note 3
19.4Mt
Global
productionRecent price dynamics (past 12 months) Potential future outlook
Copper prices increased by 26% during the nine months period of 2017
compared to same period last year
One of the reasons – temporary closure of several major mines due to
strikes (in Chile and Indonesia)
Robust long-term outlook for
copper, with forecasted
supply deficit by 2020 driven
by strong demand and supply
offset by depletion and
closures
Copper prices are forecasted
at to further increase by 15-
17% in 2018 and by 5-7%
more in 2019
A greater deficit is expected
in 2018 of 295kt (255kt
previously)
73
Agenda
2 Minerals & Mining landscape: Basics, Global, Regional and KSA-specific context
2.1 M&M overview: basics, key definitions, value chain
2.2 M&M: Global and Regional trends
2.3 M&M landscape in Saudi Arabia: current state and Strategy 2035
2.4 Q&A: Recap of key messages
74
M&M landscape in Saudi Arabia: current state and Strategy 2035
What do we plan to cover in this chapter?
M&M landscape in Saudi Arabia: current state and Strategy 2035
Discuss the Kingdom’s Minerals & Mining landscape
Understand the current state of the sector and ambitious Strategy 2035
Define the key challenges and issues, as well as the ways to tackle them
75
Saudi Arabian Minerals & Mining landscape: overview
Minerals & Mining: Saudi Arabia
Contribution
to GDP
Reserves
Production
Regulation
Major players
Growth plans
SAR ~65 Billion ($17B) in GDP in 2016 (2.8%)
~65,000 direct jobs
48 minerals
Especially rich with Aluminium, Phosphate rock, building materials, Gold / Copper
Especially strong in Aluminium and Phosphate value chains (up to 2% of WW production),
as well as building materials (>2% of WW production)
Significant untapped reserves of Gold, Copper and Zinc
Ministry of Energy, Industry & Mineral Resources
Increased contribution to GDP: by 2020 ~3.5%, by 2035 ~5.5%
Focus on Aluminium, Phosphate, Gold, Copper, Zinc, Steel
Ma’aden
76
Minerals & Mining Strategy 2035: Vision, Targets, current status
Minerals & Mining: Saudi Arabia
Develop mineral value chains to become the third pillar of Saudi industry by capitalizing
on KSA’s mineral endowment and domestic demand to deliver GDP diversification and
job growth depending on mineral resources and domestic demand and making use of
global markets
Grow total sector GDP impact by 58 USDb to 75 USDb
Reduce net imports by 10+ USDb/year
Increase annual government revenue by 2.9 USDb
Create 265,000 new jobs
Develop remote areas creating 40k jobs
Recommendation from NIPLD program committee meeting to approve the
strategy
Next steps: Integration with NIDLP and start of implementation
Targets
Latest Status
Ambition
77
Notes: 1) For all commodities, except gold, which is measured in tons
Source: Arthur D. Little analysis based on SNL Mine Economics
Minerals & Mining: Saudi Arabia
Group CommodityKSA production
ktons1
% of global
productionKey players 2035 KSA plan
CAGR
2016-35
Aluminium
value chain
Aluminium
Alumina
Bauxite
Phosphate
(fertilizer)
production
Phosphate rock
Nitrogen (Ammonia)
Sulfur
Building
materials
Cement
Gypsum
Pumice and Pumicite
Gold and
base metals
Gold (tons)
Copper (Cu content)
Zinc (Zn content)
Iron ore /
Steel
Iron ore
Steel
869
1,700
4,000
4,000
4,100
4,900
480
1,900
61,900
30
20
6
0
5,000
1,800
26,667
91,000
52
300
300
24,000
8,000
1.5%
0.7%
2.8%
1.5%
2.9%
7.1%
1.5%
1.4%
1.5%
0.2%
0.1%
0.3%
0.0%
0.3%
2.1%
10.5%
3.9%
11.7%
15.3%
12.9%
n.a.
8.4%
Ma'aden
Industrial
Minerals
Al-Ittefaq Steel
Products
Ma'aden
Ma'aden
Saudi Cement
Yanbu Cement
Yamama Cement
20+ companies
Going forward, the government is planning a significant growth in the production of gold,
base metals, steel and phosphate rock, which would require further investments
78
KSA has been exploiting its significant reserves of bauxite and phosphate rock
intensively than world average; gold and base metals are lagging behind
Notes: 1) For all commodities, except gold, which is measured in tons 2) Based on estimates
Source: Arthur D. Little analysis based on SNL Mine Economics, Arthur D. Little analysis
Minerals & Mining: Saudi Arabia
Group CommodityKSA reserves
ktons1
% of global
reserves
RPR
KSA
RPR
globalComments
Aluminium
value chain
KSA has been exploiting bauxite
reserves intensively than world average
Bauxite
Phosphate
(fertilizer)
production
Phosphate rock
KSA has been exploiting phosphate
reserves intensively than world average
Gold and
base metals
Gold (tons) KSA has been behind the world average
in gold as well as base metals
production compared to its reservesCopper
(Cu content)
Zinc
(Zn content)
Iron ore /
SteelIron ore
Currently, KSA is not producing any iron
ore; imports are the only source for
steel production
210,000
680,000
469
6,0002
8,0002
383,000
0.8%
1.1%
2.7%
1.0%
0.8%
0.2%
10753
~2x
261170
~1.5x
18200
~11x237
400
~11x2
1874
~4x
76n.a.
79
Current sector overview: mainly developed segments across the value chain,
with certain exceptions
Minerals & Mining: Saudi Arabia
Iron and Steel
Bauxite and
Aluminium
Gold
Zinc / Copper
Titanium
Building
materials
Phosphate
Midstream (smelting, metal
manufacturing)
Downstream (semi-
finished and fabricated
products)
Upstream
Iron ore mining Crude steel production Flat and long rolled products
Bauxite / Alumina AluminiumExtruded and flat-rolled
products
Ore Ingots Gold wire
Copper and zinc ore mining Copper cathodeCopper wire products
Galvanized products
Ilmentile or rutile Titanium dioxide Paints, milled products
Limestone Mining Clinker production Cement
Phosphate rock Phosphate acid DAP
Developed segment Developing segment Underdeveloped segmentLegend
80
Strategy 2035: key numbers (1/2)
Minerals & Mining: Saudi Arabia
Iron and Steel
2035: forecasted downstream output2035: forecasted midstream output
Direct reduced iron: 20 M tons
Crude steel: 24 M tons
Bars: 10.7 M tons
Billets: 12 M tons
Slabs: 7.2 M tons
HRC: 5.1 M tons
Seamless pipes:
0.9 M tons
Phosphate 7.8 M tons of final product (DAP)
Base metals 300 K tons of copper cathode
300 K tons of zinc
Cement 91 M tons
Aluminium 1.8 M tons
Can sheet: 540 K
tons
Wire: 360 K tons
Foil: 80 K tons
Extrusion: 459 K
tons
81
Strategy 2035: key numbers (2/2)
Minerals & Mining: Saudi Arabia
Ceramics Wall / floor tiles: 7.3 M tons
Sanitary ware: 300 K tons
Clay pipes: 484 K tons
Sodium
compounds
Sodium chloride: 4.9 M tons
Sodium dichloride: 2.2 M tons
Sodium carbonate: 0.9 M tons
Gold 1.67 M troy ounces (52 tons)
Glass Fiber glass: 620 K tons
Float glass: 1 M tons
Container glass: 970 K tons
Silicon
Titanium
Ferrosilicon: 67 K tons
Metallurgical silicon: 147 K tons
Polysilicon: 19 K tons
Titanium slag: 1 M tons Titanium dioxide: 500 K tons
Titanium sponge: 40 K tons
2035: forecasted downstream output2035: forecasted midstream output
82
Sector growth: key challenges and proposed solutions
Minerals & Mining: Saudi Arabia
Saudi Arabia is under
explored
Key business cases are
challenging
Few local players to develop
key projects
Sub-optimal impact on Saudi
society
Relatively low fiscal revenue
contribution
Low local content contribution with low
jobs attractiveness to Saudi citizens
Low mineral value chain fiscal contribution
Weak control of mining activity
Most critical projects are capital-intensive
Few players can withstand high CapEx
projects
Limited infrastructure present in remote
areas impacting project capital costs for
mine development
Exploration spend is well below global
average levels with few juniors active in
sector today
Slow licensing turnaround time
Accelerating exploration
Enhancing business case viability
Enhancing industry structure to
promote sector development
Improving value chain social
benefits
Boosting sector fiscal revenue
contribution
Challenges Challenge description Solutions
83
Agenda
2 Minerals & Mining landscape: Basics, Global, Regional and KSA-specific context
2.1 M&M overview: basics, key definitions, value chain
2.2 M&M: Global and Regional trends
2.3 M&M landscape in Saudi Arabia: current state and Strategy 2035
2.4 Q&A: Recap of key messages
Arthur D. Little has been at the forefront of innovation since 1886. We are an acknowledged thought leader in linking strategy, innovation and transformation in technology-intensive and converging industries. We navigate our clients through changing business ecosystems to uncover new growth opportunities. We enable our clients to build innovation capabilities and transform their organizations.
Our consultants have strong practical industry experience combined with excellent knowledge of key trends and dynamics. Arthur D. Little is present in the most important business centers around the world. We are proud to serve most of the Fortune 1000 companies, in addition to other leading firms and public sector organizations.
For further information please visit www.adlittle.com.
Copyright © Arthur D. Little 2016. All rights reserved.
Dr. Jaap Kalkman
Managing Partner,
Global Energy & Utilities
+971 55 559 4332
Ryan Al Nesayan
Principal,
Energy & Utilities
+966 50 000 1984
Ilya Epikhin
Principal,
Global Energy & Utilities
Metals & Mining
+971 58 902 8692