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BINMAK SOLUTIONSWe Deliver On Our Promise
Tirwirei BingudzaBINMAK CORPORATION
Business Turnaround Strategies
BINMAK SOLUTIONSWe Deliver On Our Promise
Investopedia
“A turnaround is the financial recovery of a company that has been performing poorly for an extended time.
To effect a turnaround, a company must acknowledge and identify its problems, consider changes in management, and develop and implement a problem-solving strategy”
Introduction to Binmak
Turnaround Strategy Steps
Operational Turnaround Strategies
Case Studies
Operational Turnaround Results
Agenda
BINMAK SOLUTIONSWe Deliver On Our Promise
The Binmak Solutions….
We partner with your teams to Define, Measure, Analyse, Improve, and Sustain Results Driven Operational Performance
We partner with your teams to ensure that the Right Work is done at the Right Time in the Right Way for predictable, consistent business results and to deliver to expectations
We partner with your teams and equip them to implement the World renowned ISO55000 Physical Asset Management Standard to reduce risk to the business processes by increasing equipment reliability.
BINMAK SOLUTIONSWe Deliver On Our Promise
Who We Are
The Binmak Solutions team has over 25 years of experience in the mining industry gained across diverse geographies, several commodities and various mining value chain steps. With significant experience in:
– Capital Project Management
– Integrated Business Planning
– Strategy Development
– Business Performance Improvement
– Physical Asset Management
– Information Technology Systems
The Binmak Solutions team brings:– A unique and powerful combination of expertise and experience.
– Broad, yet in-depth knowledge which gives us a holistic view grounded in solid experience
– Ability to help operations perform better and optimise capital and resource deployment
– International experience covering South Africa, USA, Chile, Brazil, The Philippines, The Republic of Ireland, Namibia, Botswana and Zimbabwe which gives us perspectives and insights that bring significant value to our diverse range of clients.
BINMAK SOLUTIONSWe Deliver On Our Promise
The Binmak Approach
Five factors differentiate Binmak Solutions:– Results as the means, as well as the end: We use progressive success to breed more
success while building confidence and capability of the client.
– Delivery of value – not just recommendations: We partner with our clients to improve Key Value Drivers.
– Speed used to mitigate risk: We help organizations improve performance in short time frames - often less than 100 days - and then leverage these achievements to inform larger transformations.
– Integrated approach across organisational hierarchy, value chain & disciplines: We work across the organisation in order to create broad ownership for the process, the results and for the changes that are critical to achieve desired outcomes.
– Development of our clients: We believe that sustainability depends on capability hence we strive to empower our clients through training and coaching.
BINMAK SOLUTIONSWe Deliver On Our Promise
Our Clients
Introduction to Binmak
Turnaround Strategy Steps
Operational Turnaround Strategies
Case Studies
Operational Turnaround Results
Agenda
BINMAK SOLUTIONSWe Deliver On Our Promise
Turnaround Strategy Steps Define The Problem
– Define The Solution – Questions are the answers
Company Strategy– Vision, Mission, Values
Financial Strategy– Breakeven Analysis– Balance Sheet Restructuring– Free cashflow– Financial Forecast
Marketing Strategy– Revenue Streams– Client Retention.
Competitive Strategy– Competitive Analysis
Management Strategy– Rightsizing– Talent Retention Plan
Operating Plan– Performance Improvement
BINMAK SOLUTIONSWe Deliver On Our Promise
Strategy Review ProcessV
isio
n
Mis
sion
Internal Analysis
ExternalAnalysis
Resource/ Capability Linkage
Imple
mentatio
n
Goals
KeySuccess Factors O
bje
ctive
s
Strategy
Feedback & Control
Outp
ut
BINMAK SOLUTIONSWe Deliver On Our Promise
1
1
Business Portfolio (Illustrative)
Prospective Global Demand Growth (2007-17 CAGR)
(5%)
0%
5%
10%
15%
20%
25%
30%
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0%
Copper
Nickel
Thermal Coal
Aluminium
Uranium Platinum
Group Metals
Diamonds
= Bubble Size Represents Avg. 2008-17 EP of c.$560M= Markets in Which Anglo Participates
= ‘Un-served’ Markets
Average GDP Growth
Gold
Silver
Zinc
Mineral
Sands
Seaborne
Coal
Seaborne
Iron Ore
41%
Rela
tive R
etu
rns
BINMAK SOLUTIONSWe Deliver On Our Promise
1
2
Business Portfolio (Illustrative)
Prospective Global Demand Growth (2007-17 CAGR)
(5%)
0%
5%
10%
15%
20%
25%
30%
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0%
Copper
Nickel
Thermal Coal
Aluminium
Uranium Platinum
Group Metals
Diamonds
= Bubble Size Represents Avg. 2008-17 EP of c.$560M= Markets in Which Anglo Participates
= ‘Un-served’ Markets
Average GDP Growth
Gold
Silver
Zinc
Mineral
Sands
Met
Coal
Seaborne
Iron Ore
41%
High
CASH COW
Large +
Cash Flow
STAR
+ or –
Cash Flow
Low
DOG
+ or –
Cash Flow
QUESTION MARK
Large –
Cash Flow
Low High
BINMAK SOLUTIONSWe Deliver On Our Promise
1
3
Business Portfolio (Illustrative)
Prospective Global Demand Growth (2007-17 CAGR)
(5%)
0%
5%
10%
15%
20%
25%
30%
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0%
Copper
Nickel
Thermal Coal
Aluminium
Uranium Platinum
Group Metals
Diamonds
= Bubble Size Represents Avg. 2008-17 EP of c.$560M= Markets in Which Anglo Participates
= ‘Un-served’ Markets
Average GDP Growth
Gold
Silver
Zinc
Mineral
Sands
Met
Coal
Seaborne
Iron Ore
41%
High Selectivity /
Earnings
Invest to
Hold
Invest to
Grow
Medium Harvest /
Divest
Selectivity /
Earnings
Invest to
Hold
Low Harvest /
Divest
Harvest /
Divest
Selectivity /
Earnings
Low Medium High
BINMAK SOLUTIONSWe Deliver On Our Promise
WHAT IS THE CORRECT MEDICINE?
Internal
Factors
External
Factors
Strengths (S)5-10 most substantial
internal strengths
Weaknesses (W)5-10 most serious internal
weaknesses
Opportunities (O)5-10 most important
opportunities
SO StrategiesStrategies that use
strengths to take advantage
of opportunities
(Growth)
WO StrategiesStrategies that take
advantage of opportunities
by overcoming weaknesses
(Turnaround)
Threats (T)5-10 major threats
ST StrategiesStrategies that use
strengths to avoid threats
(Diversification)
WT StrategiesStrategies that minimize
weaknesses and avoid
threats
(Defensive)
BINMAK SOLUTIONSWe Deliver On Our Promise
Business Operating System
Business
Strategy
Boundary
Control
System
Business
Control
System
Interactive
Control
System
Belief
System
Strategic control of a business cannot be achieved through performance measurement systems but through levers of control
BINMAK SOLUTIONSWe Deliver On Our Promise
Scenarios(Unknown Unknowns)
How to Compete
Business Planning
Business Operating System
Vision
Business
Strategy
Belief System
Strategy as a
Perspective
Boundary Control
System
Strategy as a
Position
Business Control
System
Strategy as a
Plan
Interactive Control
System
Strategy as
Patterns in action
BINMAK SOLUTIONSWe Deliver On Our Promise
17
Business Control System
Plan
Execute
Check
Act
Performance Targets
Operating Master Schedule
Production Strategy
Service Strategy
FinancialSchedule
Co
st &
Wo
rk
Ap
pro
val
Wo
rk P
lan
nin
g
Wo
rk S
che
du
ling
Wo
rk E
xecu
tio
n
Process Work Management
Social
Measure Performance
AnalyseImproveFeedback
Resourcing
Imp
rove
me
nts
/ A
dju
stm
ents
Bu
sin
ess
Exp
ect
atio
ns
BINMAK SOLUTIONSWe Deliver On Our Promise
18
Strategic ContextKnowing desired competitive position on cost curve is critical
Lion Story
MMX Corumbá SystemCloud Break/Christmas CreekSishenSerra Norte (Carajas) West Angelas
500
0
900800700600400
Yandi
100 300200
20
10
1,0000
80
70
FOB
Real Cost
US$/t
60
50
40
30
Mount Whaleback/OB 29,30
Tubarão Complex PelletsKhumani
1,100
Transport
Marketing Mining
ProcessingRoyalties
Pelletizing
Source: - AME 2010 FOB cost curve
Quartile 1 Quartile 2 Quartile 3 Quartile 4
BINMAK SOLUTIONSWe Deliver On Our Promise
1
9Source: - AME 2010 FOB cost curve
MMX Corumbá SystemCloud Break/Christmas CreekSishenSerra Norte (Carajas) West Angelas
500
0
900800700600400
Yandi
100 300200
20
10
1,0000
80
70
2017 FOB Real Cost US$/t
60
50
40
30
Tubarão Complex PelletsKhumani
1,100
Transport
Marketing Mining
ProcessingRoyalties
Pelletizing
Quartile 1 Quartile 2 Quartile 3 Quartile 4
Khumani
1,3001,200300
80
600
Area CSerra Norte (Carajas)
700
MMX Corumbá System
1,100
40
50
90
30
10
110
YandiTom Price
900 1,400400200
SishenMount Whaleback/OB 29,30
20
60
70
800 1,500
100
2021 FOB Real Cost US$/t
0
0 1,000500100
ProcessingRoyalties
Marketing
TransportPelletizing
Mining
Quartile 1 Quartile 2 Quartile 3 Quartile 4
Moves to third quartile ore cost curve by 2021
BINMAK SOLUTIONSWe Deliver On Our Promise
2
0
Confidential
Prospective Net Realised Turnover (2017)
Prospective Competitive Position
Mines are forecast to be at competitive parity in 2017, delivering 21¢/dmtu
FOB Revenue2
(¢/dmtu)
Production (M dmtu)
* Captures committed and probable seaborne production; Notes: (1) 59.4% lump and 40.6% fines with 64% Fe lump and 63.5% Fe fine; (2) includes product quality premiums and discounts Royalties are
included in realised revenue calculations, and excluded from business costs; (3) Effective tax rate of 36% assumed for Sishen and 33% for all other mines (4) Excludes China; Source: CRU
Q1 Q2 Q3 Q40
20
40
60
80
100
120
140
160
180
0 200 400 600 800 1,000
Kiruna
MalmbergetAlegria
Carol Lake
Mont-
Wright
Faleme
Simandou
Southern
System
Mt Newman
West Angelas
Caemi
Northern
System
Khumani
Casa de Pedra
MR Phase 1
Jack Hills
Area C
Sishen
Various CIS
Hope Downs
Ciudad Piar
Mount NimbaHamersley
Various India
Cloud Break
Sishen South
Mesa J
Zouerate
Yandi
MR Phase 2
Weld
Range
Sishen C-
Grade
Prospective Economic Profit (2017)
Production (M dmtu)
EP (¢/dmtu) Total EP: $21B
(Avg: 21¢/dmtu)
(50)
(40)
(30)
(20)
(10)
0
10
20
30
40
0 200 400 600 800 1,000
Northern System
Area C
Caemi
Hamersley
Jack Hills
Southern System
Mt Newman
Casa de Pedra
West Angelas
Yandi
Sishen
Hope Downs
Cloud Break
Ciudad Piar
Simandou
SEP 2
MR Phase 1
MR Phase 2
Faleme
Alegria
Mount Nimba
Carol Lake
Sishen C-GradeWeld Range
Mesa JKhumani
Mont-Wright
Zouerate
Various India
Kiruna
Malmberget
Various CIS
Sishen
South
SEP 2
BINMAK SOLUTIONSWe Deliver On Our Promise
EFFICIENCY VERSUS EFFECTIVENESS
Strategic Management
Effective Ineffective
Efficient
Inefficient
Thrive Die slowly
Die quickly Survive
Operational
Management
1 2
43
BINMAK SOLUTIONSWe Deliver On Our Promise
22
Building The Strategic Plan
Develop the Strategy
Strategic Analysis
Strategy Formulation
Plan and execute
Strategic Initiatives
Planning and resourcing
Accountability
Translate the Strategy
Map & Link to Goals
Set measurable objectives
Measure and set targets
Clarify the Vision
Mission, Values
Strategic Shifts (From - To)
Strategic Framework
Strategicplan
•Value gap•Change agenda•Vision
•Strategic issues•Strategy Direction•Strategic Themes
•Goals & Objectives•Measurement framework•Performance contracts
•Priorities•Resourcing•Initiative Teams
Introduction to Binmak
Turnaround Strategy Steps
Operational Turnaround Strategies
Case Studies
Operational Turnaround Results
Agenda
BINMAK SOLUTIONSWe Deliver On Our Promise
Why Business Performance
Improvement?
“There is a Hidden Mine behind every mine. Effective Asset
Optimisation will unearth this Hidden Mine”
24
BINMAK SOLUTIONSWe Deliver On Our Promise
25
“If a company tells me they experience moving bottlenecks, my response is:
You have NO bottlenecks and most of your resources have at least 30%
spare capacity”
– Dr Eli Goldratt
BINMAK SOLUTIONSWe Deliver On Our Promise
26
“If you want to make money, ...
most of your resources MUST be IDLE from time to time”
– Dr Eli Goldratt
BINMAK SOLUTIONSWe Deliver On Our Promise
27
“A production chain with 80% availabilities can produce at
lower unit cost than a chain with 90% availabilities”
BINMAK SOLUTIONSWe Deliver On Our Promise
Business Performance Improvement
(BPI) Process
BINMAK SOLUTIONSWe Deliver On Our Promise
Value Creation Through Strategy Delivery
29
Value Waterfall
0.02
0.020.01
1.30
0.340.13
0.92
0.57
1.49
1.01
0.18
0.84
0.300.540.080.3620.0
19.5
19.0
20.41
19.87
Limpopo
Growth
Value ($bn)
0.05
Bene-
ficiation
0.32
2e
Footprint
19.94
20.77
TotalTotal
0.20
Solar
Project
19.96
20.98
Total
+1.78(+11%)
+2.02(+11%)
+0.57(+3%)
0.0
16.5
17.0
17.5
18.0
18.5
Northern
Cape
Growth
0.08
Kolo-
mela
Total
18.76
18.66
0.10
Logistics
0.10
Niche
Product
Strategy
Current
Ops
21.0
18.18
Thaba
0.05
AONew NPV
17.21
17.21
Prod
uctio
n
0.54
Budget
Changes
0.71
LOM
Changes
Q1’11
Price
Change
+ Macro
Econ’s
Current
NPV
16.40
20.5
18.18
Leg1: Current Operations Leg2: Value Chain Leg3: Growth Leg4: SD
BINMAK SOLUTIONSWe Deliver On Our Promise
Key Questions Addressed by Value Optimisation
What is the realistic business expectation?1
What is the realistic business aspiration?2
How should the asset be strategically managed to optimise value potential?
3
Is there material risk in delivery?4
What are the key risks faced by each asset?5
A Capability vs Budget: Determine gap between current
capabilities (C80) and Budget
B Likely production (C80): Level which will be achieved on
average with a confidence of 80%, assuming no changes to the
process
C Potential incremental improvement (P75): A production level
that could be achieved in the near future if the process is
stabilised and optimised (aspirational)
D Appropriate optimisation strategy for asset: Distribution
shape - Indication of required effort to improve output
Mean (C50)
AB C
D
E
E
BINMAK SOLUTIONSWe Deliver On Our Promise
Type of Intervention Required for
ImprovementAnalysis of the shape of the Capability Histogram may indicate where the process
resides on the Output/Effort curve and hence give an indication of the intervention
required and where the operation is relative to full potential
BINMAK SOLUTIONSWe Deliver On Our Promise
VariationHow did you do? What can the process do?
BINMAK SOLUTIONSWe Deliver On Our Promise
VariationHow did you do? What can the process do?
BINMAK SOLUTIONSWe Deliver On Our Promise
VariationHow did you do? What can the process do?
BINMAK SOLUTIONSWe Deliver On Our Promise
The key focus of value optimisation will be on stabilising the process to get predictable
and consistent performance
Change design or strategy
Focus on Execution &/or Resourcing
Asset strategies to optimise value…
BINMAK SOLUTIONSWe Deliver On Our Promise
Variation Range 3 to 4,
Average/Shift = 3.5
Variation Range 1,2,3,4,5,6
Average/Shift = 3.5
Key Learning:
• Coupled variation causes
constraints
• Process capacity causes
constraints
• Seldom does everything
‘align’ to give full potential
• Reducing the variation in
each process step caused
whole system to perform
significantly better
0
20
40
60
80
100
120
140
160
180
200
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
Simulation of Production: With Dice Output 1,2,3,4,5,6
0
20
40
60
80
100
120
140
160
180
200
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
Simulation of Production: With Dice Output 3 & 4
BINMAK SOLUTIONSWe Deliver On Our Promise
37
10Input Output
10
12
0
Pe
rfo
rman
ce
Time
Max
Ave
Min
Scientific Fact 1All Resources Fluctuate Over Time
BINMAK SOLUTIONSWe Deliver On Our Promise
38
Scientific Fact 2Interdependence Impacts The Whole Chain
The variations do not average out!
A B C ED FMineralResource
Product
StarvationBlockage X
BINMAK SOLUTIONSWe Deliver On Our Promise
39
Time
Pe
rfo
rman
ce
12
10
0
10 10
The poor performance of one link gets passed onto
the flanking link, and ultimately to the rest of
the chain
BINMAK SOLUTIONSWe Deliver On Our Promise
40
Time
Pe
rfo
rman
ce
12
10
0
5
10 10 10 1010 10
Combined Effect of
Variation and Interdependence
BINMAK SOLUTIONSWe Deliver On Our Promise
41
Time
Pe
rfo
rman
ce
12
10
0
10 10 10 1010 10
>25%
Combined Effect of
Variation and Interdependence
BINMAK SOLUTIONSWe Deliver On Our Promise
Appropriate and specific value improvement strategies will be determined for each asset depending on its position on the value optimisation curve
Roland
Hossy
Saffy
NewmanK3
Value Optimisation Strategies…
1B/4B
E3
E2
BINMAK SOLUTIONSWe Deliver On Our Promise
Tool set for analyses
Value Stream Mapping & Statistical Analysis (Process Capability, Paretos,
Control Charts, Constraints Analysis)
Throughput: Do we have a Rate or Operating Time problem?
Benchmark/
BACActualReduced
Advance/Blast
Reduced Blast
FrequencyReduced DOH Reduced Grade
Value Driver Analysis: Which are the biggest value levers?
Operating Profit ,Volume, Unit Cost, Sensitivity & Attribution Analysis
Performance Improvement: “The most powerful driver of better performance is better performance itself”
BINMAK SOLUTIONSWe Deliver On Our Promise
Output: Determination of full potential of
operations, summarized by 4 waterfalls...
34
21
Throughput (Mtpa)
BAC/
Benchmark
Potential
TonsDrill &
Blast
Load CrushHaul Mill Improvements
34
2
1
Unit Cost ($/t)
Plan/
BudgetBAC/
Benchmark
Actual BDPImprovements
3
4
21
Productivity (t/FTE)
Plan/
BudgetBAC/
Benchmark
Actual BDPImprovements
NPV ($m)
Full
Potential
Actual BDPThroug
hput
Plan/
BudgetUnit
Cost
Produc
tivity
BINMAK SOLUTIONSWe Deliver On Our Promise
Summary of AO Strategy in Action
45
Hauled
Tons
Truck OEE
Cycle Time
Empty time
Full timePayload
Fleet Size
Utilisation (DOH)
Operational
Delays
Actual
Benchmark
Engineering
Downtime
Actual
Benchmark
Shovel OEE
Drill & Blast
ProcessTransferLoadLogistic
sHaul
Theory of constraints tells us where to focus e.g. hauling
Value driver model tells us what to focus on within the constraint
Gap analysis vs. benchmark tells us how muchwe can improve
Target setting keeps us focused on delivery
Variance and Attribution analysis shows us the impact on business drivers
FY 2012FY Budget
YTD 2012
Cycles/HourDOHPayloadTrucks Fleet
YTD 2011
Performance excluding project
AO Benefit
BINMAK SOLUTIONSWe Deliver On Our Promise
Examples of Some of the Analysis
that will be Produced
34
21
Base Case
Capacities & Constraints
Best AttnCapacity
PotentialTons
Impact of interdependent variables(Example: Change drilling burden)
% Change in cost
% change in revenue
= Bubble size
equals NPV of
the specific
initiative only.
Not the
aggregated
value of the
initiatives
Initiative 2
Initiative 1
Base Case
% Change in cost
% change in revenue
= Bubble size
equals OP
impact of the
specific metric
only.
Not the
aggregated
Impact
Drill
cost
Labour
Cycle time
Lump/FinePayloa
d
Drill Yield
Plant YieldExplosive
s
Floor Stock
Load/ Haul
JIG/ DMS
Transfer Drill/ Blast
Focus on bottleneck
Attribution and Sensitivity Analyses to
determine focus areas and impact
BINMAK SOLUTIONSWe Deliver On Our Promise
Journey Towards Commercial
ExcellenceMigrate from Passive Marketing to Integrated Miner
• Long position for trader
• Value chain not fully optimised
• Limited emphasis on customer interface, i.e. uses agencies and deals with traders/merchants
• Value chain partially optimised
• Interfaces directly with customers – limited use of agencies and traders/merchants
• Small in house trading unit with limited scale
• Value chain mostly optimised
• Interfaces directly with customers - Trading unit sells all equity volumes
• Sizable fraction of 3rd party volumes sourced and traded
• Value chain fully optimised
Marketing functionshared with traders
Marketing optimisesphysical value chain
Primary focus of marketing
Model
Marketing maximises value of upstream assets
1 Passive marketing model
2Active Value-Chain Optimisation
3Customer centric marketing model
4Integrated miner-trader model
Marketing as important as mining and source of
profits on its own
BINMAK SOLUTIONSWe Deliver On Our Promise
Value potential of Asset Backed Optimisation
Basic trading levers with potential to lift HCCL's total value
175
150
125
100
75
50
25
0
Total
EBITDA
potential
67-125
More
sophist.
levers
Annual trading EBITDA ($M)
28-58
Initial
target
EBITDA
39-67
Long-term
sourcing
14-26
Freight
arbitrage
2-4
Geographic
arbitrage
18-30
Quality
arbitrage
4-7
First trading steps –
Basic levers only
Additional
upside
I
II
III
IV
Quality arbitrage – Blend different
coal qualities to match customer
needs and achieve higher net price
realisation
Long-term sourcing – Enter long-
term off-take agreement with smaller
producer at favourable price and
market its volumes on own account
Geographic arbitrage – Capture
regional price differentials by shifting
coal from low- to high- price markets
Freight arbitrage – Capture
differential between index-implicit and
real freight rates, eg. by switching
from FOB to CIF
II III IVI
ABO Concept
BINMAK SOLUTIONSWe Deliver On Our Promise
Value proposition for clients Value proposition for stakeholders
IV – ORGANISATIONAL RESPONSIBILITY AND CAPABILITY
Res
ou
rce
sFi
nan
cial
Clie
nts
Best price?C.1
Stak
eho
lder
s
Best quality?C.2 Best
delivery?
C.3 Best place to work?
S.1 Social compromise?
S.2
Environmental compromise?
CS3
xxx xxx xxxP4.1
xxx xxx xxxP4.2
xxx xxx xxxP4.3
xxx xxx xxxP4.4
Maximise Shareholder’s ValueF.1
Increase RevenuesF.2
Reduce CostF.4
Reduce RiskF.3
INPUTS INPUTS INPUTSOUTPUTS OUTPUTS
III. DELIVER ON GROWTH PROJECTS II. CAPTURE VALUE ACROSS VALUE CHAIN
Grow new production volume
P3.1
Increase pipeline value
P3.2
xxx xxx xxxP3.3
xxx xxx xxxP2.1
xxx xxx xxxP2.2
xxx xxx xxxP2.3
I. OPTIMISE VALUE OF CURRENT OPERATIONS
Improve operational efficiency
P1.1
Improve operational effectiveness
P1.2
xxx xxx xxxP1.3
Inte
rnal
Pro
cess
es
STRATEGY TRACKING USING STRATEGY MAPS
Introduction to Binmak
Turnaround Strategy Steps
Operational Turnaround Strategies
Case Studies
Operational Turnaround Results
Agenda
BINMAK SOLUTIONSWe Deliver On Our Promise
Turnaround Strategy Implementation Strategy deliverables
– White paper– Strategy document– Long-term financial plan
Refreshing the Strategy– External Analysis
• World & Zimbabwe economic analysis• Medium and Long-term coal supply and demand• Updated short-medium and long term price line• Political, Legal & Regulatory Environment • Competitive environment, Suppliers, Buyers
– Internal Analysis• Operational Issues, Challenges & opportunities• Commercial & Marketing Issues and Opportunities• Updated project info• Risk management• Cultural assessment
– Emerging Strategy• Update HCCL strategy incorporating changes in internal environment• Derive plan for implementing strategy (KPI’s; Time line; Performance contracts)
Key Milestones– White paper– Department & HOD Workshops– Strategy document and Business plan– Long-term financial plan– Board Strategy and Risk Workshop
BINMAK SOLUTIONSWe Deliver On Our Promise
Key Success Factors
Senior Management Support
Dedicated Senior BPI Manager Reporting Directly to CEO/MD
Well resourced, Focussed Teams
BI & AM Skills Development and Capability Building
Expert Input, Support and Facilitation
Medium to long term commitment to transformation
BINMAK SOLUTIONSWe Deliver On Our Promise
Strategic Pillars
BINMAK SOLUTIONSWe Deliver On Our Promise
54
Need to move from 3rd Quartile of cost curve to
1st Quartile
Khumani
1,3001,200300
80
600
Area CSerra Norte (Carajas)
700
MMX Corumbá System
1,100
40
50
90
30
10
110
YandiTom Price
900 1,400400200
SishenMount Whaleback/OB 29,30
20
60
70
800 1,500
100
FOB
Real Cost
US$/t
0
0 1,000500100
ProcessingRoyalties
Marketing
TransportPelletizing
Mining
Source: - AME 2015 FOB cost curve
Quartile 1 Quartile 2 Quartile 3 Quartile 4
BINMAK SOLUTIONSWe Deliver On Our Promise
Financial & Management
Strategies
Balance Sheet Restructuring
– Liquidity & Operating Cashflow
Organisational Structuring
– Organising for success
BINMAK SOLUTIONSWe Deliver On Our Promise
Operational Performance
Improvement
Theory Of Constraints Production Flow
Rapid Results Implementation
Physical Asset Management Improvement
BINMAK SOLUTIONSWe Deliver On Our Promise
High levels of variation on a day to day basis at overall production
implies that substantial potential improvement can be gained by
stabilising the process.
Key area of opportunity going forward seen in reducing number of days
with zero production and narrowing the production range.
There is also a potential opportunity in reducing extreme swings in
production which currently ranges from zero to over 8,000 tons per day
Total Tons Produced
1
2 Production capability histogram skewed extremely to the left indicating
potential for improvement by shifting to the right.
Realistic budget for HCCL that can be achieved with 80% confidence
without change in process and practices is 16,214 tons/month and
37,230 tons/month with 50% confidence
Potential aspiration of 58,948 tons/month could be reached in 6-12
months with process improvements
Budget Confidence
1
2
Detailed capability and operational stability analysis indicated the confidence of delivering 2017-2021 Budget is
0% without substantial changes to current processes and practices. The analysis indicated that there is a huge
potential for upside performance improvement by stabilising the process, reducing variation, eliminating
interdependencies and creating predictable and consistent performance.
Operational Stability1
Daily Tons 2017 BudgetAug 2015 to
Dec 2016 MeanC80 Confidence P75
Monthly 100 000 37 230 16 214 0% 58 948
Quarterly 299 178 111 384 46 142 0% 176 358
Annual 1 200 000 446 760 194 562 0% 707 370
HCCLChabaCoalTons_CCDate between #08/01/2016# and #12/31/2016#
IndividualsSet 1: UCL = 11 381,54, Mean = 3 304,00, LCL = -4 773,54 (not shown) (2016/08/30 - 2016/09/25) (mR = 2) (Lloyd Nelson option)
UCL = 11381.54
Mean = 3304.00Daily Budget = 3 334,00
Daily Average = 1 474,10
Daily Capacity = 7 000,00
2016
/08/
01
2016
/08/
08
2016
/08/
15
2016
/08/
22
2016
/08/
29
2016
/09/
05
2016
/09/
12
2016
/09/
19
2016
/09/
26
2016
/10/
03
2016
/10/
10
2016
/10/
17
2016
/10/
24
2016
/10/
31
2016
/11/
07
2016
/11/
14
2016
/11/
21
2016
/11/
28
2016
/12/
05
2016
/12/
12
2016
/12/
19
2016
/12/
26
0
2 000
4 000
6 000
8 000
10 000
12 000
HCCLChabaCoalTons_OCHDate between #08/01/2016# and #12/31/2016#
Histogram
0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000
0
20
40
60
80
100
120
Mean =
1 4
74,1
05
US
L =
3334
Targ
et = 1
960
Basic Statistics
153 Data points
8 925Maximum
1 474,105Mean
0Minimum
Within 1 Sigma (e) 15,7%
Within 2 Sigma (e) 83,0%
Within 3 Sigma (e) 86,9%
Capability Indexes
0,491Cp
Specifications
3334Upper
1960Target
HCCLChabaCoalTons_OCHDate between #08/01/2016# and #12/31/2016#
Histogram
0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000
0
20
40
60
80
100
120
Mean =
1 4
74,1
05
US
L =
3334
Targ
et = 1
960
Basic Statistics
153 Data points
8 925Maximum
1 474,105Mean
0Minimum
Within 1 Sigma (e) 15,7%
Within 2 Sigma (e) 83,0%
Within 3 Sigma (e) 86,9%
Capability Indexes
0,491Cp
Specifications
3334Upper
1960Target
HCCLChabaCoalTons_OCHDate between #08/01/2016# and #12/31/2016#
Histogram
0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000
0
20
40
60
80
100
120
Mean =
1 4
74,1
05
US
L =
3334
Targ
et = 1
960
Basic Statistics
153 Data points
8 925Maximum
1 474,105Mean
0Minimum
Within 1 Sigma (e) 15,7%
Within 2 Sigma (e) 83,0%
Within 3 Sigma (e) 86,9%
Capability Indexes
0,491Cp
Specifications
3334Upper
1960Target
HCCLChabaCoalTons_OCHDate between #08/01/2016# and #12/31/2016#
Histogram
0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000
0
20
40
60
80
100
120
Mean =
1 4
74,1
05
US
L =
3334
Targ
et = 1
960
Basic Statistics
153 Data points
8 925Maximum
1 474,105Mean
0Minimum
Within 1 Sigma (e) 15,7%
Within 2 Sigma (e) 83,0%
Within 3 Sigma (e) 86,9%
Capability Indexes
0,491Cp
Specifications
3334Upper
1960Target
HCCLChabaCoalTons_OCHDate between #08/01/2016# and #12/31/2016#
Histogram
0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000
0
20
40
60
80
100
120
Mean =
1 4
74,1
05
US
L =
3334
Targ
et = 1
960
Basic Statistics
153 Data points
8 925Maximum
1 474,105Mean
0Minimum
Within 1 Sigma (e) 15,7%
Within 2 Sigma (e) 83,0%
Within 3 Sigma (e) 86,9%
Capability Indexes
0,491Cp
Specifications
3334Upper
1960Target
HCCLChabaCoalTons_OCHDate between #08/01/2016# and #12/31/2016#
Histogram
0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000
0
20
40
60
80
100
120
Mean =
1 4
74,1
05
US
L =
3334
Targ
et = 1
960
Basic Statistics
153 Data points
8 925Maximum
1 474,105Mean
0Minimum
Within 1 Sigma (e) 15,7%
Within 2 Sigma (e) 83,0%
Within 3 Sigma (e) 86,9%
Capability Indexes
0,491Cp
Specifications
3334Upper
1960Target
HCCLChabaCoalTons_OCHDate between #08/01/2016# and #12/31/2016#
Histogram
0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000
0
20
40
60
80
100
120
Mean =
1 4
74,1
05
US
L =
3334
Targ
et = 1
960
Basic Statistics
153 Data points
8 925Maximum
1 474,105Mean
0Minimum
Within 1 Sigma (e) 15,7%
Within 2 Sigma (e) 83,0%
Within 3 Sigma (e) 86,9%
Capability Indexes
0,491Cp
Specifications
3334Upper
1960Target
HCCLChabaCoalTons_OCHDate between #08/01/2016# and #12/31/2016#
Histogram
0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000
0
20
40
60
80
100
120
Mean =
1 4
74,1
05
US
L =
3334
Targ
et = 1
960
Basic Statistics
153 Data points
8 925Maximum
1 474,105Mean
0Minimum
Within 1 Sigma (e) 15,7%
Within 2 Sigma (e) 83,0%
Within 3 Sigma (e) 86,9%
Capability Indexes
0,491Cp
Specifications
3334Upper
1960Target
HCCLChabaCoalTons_OCHDate between #08/01/2016# and #12/31/2016#
Histogram
0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000
0
20
40
60
80
100
120
Mean =
1 4
74,1
05
US
L =
3334
Targ
et = 1
960
Basic Statistics
153 Data points
8 925Maximum
1 474,105Mean
0Minimum
Within 1 Sigma (e) 15,7%
Within 2 Sigma (e) 83,0%
Within 3 Sigma (e) 86,9%
Capability Indexes
0,491Cp
Specifications
3334Upper
1960Target
HCCLChabaCoalTons_OCHDate between #08/01/2016# and #12/31/2016#
Histogram
0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000
0
20
40
60
80
100
120
Mean =
1 4
74,1
05
US
L =
3334
Targ
et = 1
960
Basic Statistics
153 Data points
8 925Maximum
1 474,105Mean
0Minimum
Within 1 Sigma (e) 15,7%
Within 2 Sigma (e) 83,0%
Within 3 Sigma (e) 86,9%
Capability Indexes
0,491Cp
Specifications
3334Upper
1960Target
HCCLChabaCoalTons_OCHDate between #08/01/2016# and #12/31/2016#
Histogram
0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000
0
20
40
60
80
100
120
Mean =
1 4
74,1
05
US
L =
3334
Targ
et = 1
960
Basic Statistics
153 Data points
8 925Maximum
1 474,105Mean
0Minimum
Within 1 Sigma (e) 15,7%
Within 2 Sigma (e) 83,0%
Within 3 Sigma (e) 86,9%
Capability Indexes
0,491Cp
Specifications
3334Upper
1960Target
BINMAK SOLUTIONSWe Deliver On Our Promise
58
SAFETY
Theory Of Constraints Operational Flow
Model for Open Cast Mining Operations
OverburdenRemoval
TreatCrushingLoad & Haul
Drill &Blast
Ore Body
ROMBuffer
Floor Stock
ExposedOre
PlantStock Pile
Flowing OUT
Flowing IN
PEOPLE Material MaintenanceEquipment Services
Total Subordination to the CORE PROCESS
Quality Quality
Slimes
Simulate - Measure - Improve
Product
BINMAK SOLUTIONSWe Deliver On Our Promise
Buffer of Blasted
Power Coal
Top Bench
Bottom Bench
HIC
Buffer of Drilled Blocks
Buffer of Exposed
Coal
Buffer of Blasted Substrip
Buffer of Drilled Blocks
Buffer of Prepared
Blocks
Buffer of Blasted Prestrip
Buffer of Drilled Blocks
Buffer of Marked & Prepared
Blocks
Drilled Meters
Drilled Meters
Tons Hauled
Tons Hauled
Tons Hauled
Chaba TOP HIC ROM Stockpile
Chaba HPS ROM Stockpile
Primary Tip Stockpile
Chaba Plant A Tons
Processed
Tons Hauled To Primary
Tip
Secondary Crusher
HPS Tons
ESC Conveyor
HPS Bunker
Buffer of ESC Bunker
Tons
Buffer of HPS
Stocpile
Bottom HIC NPD Stockpile
Bottom HIC NPD Tons
Hauled to No.2
J&F Bottom HIC NPD Stockpile
Chaba Bottom
HIC ROM Stockpile
Drilled Meters
Chaba Plant B Tons
Processed
Bottom HIC Peas Stockpile
Primary Crusher
HPS Tons
ESC Conveyor HPS Tons
Moved
Power Coal
Buffer of Blasted HIC
No.2 Processing
Washed Coal
Clean Coal Stockpile
Raw Coal Sales
Top HIC Peas
Stockpile
Buffer Of Diesel
Buffer Of Diesel
Buffer of Explosives
Buffer of Explosives
Available Materials
Top HIC Nuts
Stockpile
Top HIC Cobbles Stockpile
Bottom HIC Duff Stockpile
Top HIC Duff
Stockpile
Buffer Of Drill Steel
Buffer Of Drill Steel
Buffer Of Oil
Buffer Of Oil
Buffer Of Drill Bits
Buffer Of Drill Bits
iEngineering ServicesEngineering Services
Buffer Of Service Kits
Buffer Of Service Kits
Engineering Skills
Engineering Skills
Preventive Maintenance
Preventive Maintenance
Corrective Mantenance
Corrective Mantenance
HWANGE COLLIERY COMPANY LIMTED
TOC PRODUCTION FLOW SHEET
2017/03/22
BINMAK SOLUTIONSWe Deliver On Our Promise
Constraints (TOC) Analysis and Bottlenecks
Illustrative ExampleKOLOMELA DAILY WAR ROOM: Leeuwfontein
Block = One block of 40mx40m
Process (Rate) Process (Rate) Process (Rate) Buffer Buffer Buffer Process (Time) Process (Rate) Process (Rate)
Converted
Total Tonnes Buffer Buffer Buffer Process (Rate) Process (Rate) Buffer Buffer Process (Time) Process (Rate) Process (Rate) Process (Rate) Buffer Buffer Floor Stock Process (Rate) Process (Rate) Process (Rate) Process (Rate) Buffer Buffer Process (Rate) Buffer Process (Rate) Buffer Buffer Process (Rate)
Day Date Total DrillingTotal Load &
Haul (incl DH)
Total Tons
Ex-pit
Cleaned
Waste/Ore
blocks
Prepared
Drill BlocksStaked Blocks
Blocks being
drilled
KOLO Drilling
Meters
BC Drilling
Meters
Waste
Drilling
Tonnes (38t)
Drilled blocks
to be charged
Charged
blocks
Blasted
Waste
Tonnes
Load & Haul
Waste Tonnes
Cumulative
Waste Tonnes
Prepared
Drill BlockStaked Blocks
Blocks being
drilled
KOLO Drilling
Meters
BC Drilling
Meters
Ore Drilling
Tonnes (66t)
Drilled blocks
to be
charged
Charged
blocks
Blasted Ore
Tonnes
Load & Haul
DSO Ex Pit
Total
Load & Haul
non-DSO Ex
Pit Total
Lab:
Operat io ns
Samples
P ro cessed
Lab: Geo lo gy
Samples
P ro cessed
Finger Stock
A1 Tonnes
Finger Stock
A3 Tonnes
Primary
Crushing
Tonnes
Primary Stockpi le
Tonnes
Screen
Tonnes
Final Product
Lumpy
Final Product
Fines
Load Out
Tonnes
For the day For the day For the day Available Available For the day Available For the day For the day For the day Available Available Available For the day
For the
month Available For the day Available For the day For the day For the day Available Available Available For the day For the day For the day For the day On stockpile On stockpile For the day On stockpile Daily On stockpile On stockpile Daily
Target 2,899 143,000 30,501 10 8 1,815 616 92,378 1,400,000 89,001 4 468 0 30,855 400,000 26,101 2,901 33 50 400,000 200,000 30,000 12,000 30,000 250,000 200,000 30,000
Threshold 2,635 130,000 30,500 6 4 1,650 560 83,980 800,000 89,000 2 425 0 28,050 200,000 26,100 2,900 30 25 240,000 170,000 30,000 8,000 30,000 100,000 100,000 30,0001,140 1140
Day 1 Fri 01-Feb 4,070 109,719 23,235 5 2 3 5 1,686 2,354 153,520 4 4 949,000 61,404 61,404 0 2 0 30 0 1,980 3 1 10,106 13,129 23 25 716,938 259,964 36,519 33,661 0
Day 2 Sat 02-Feb 3,031 132,197 15,124 5 2 2 5 993 1,508 95,038 4 4 861,000 88,182 149,586 0 0 2 530 0 34,980 3 1 15,124 0 32 0 712,931 235,080 44,493 34,401 34,200
Day 3 Sun 03-Feb 1,576 153,394 12,591 5 4 0 5 331 0 12,578 4 8 752,000 109,221 258,807 0 0 2 1,245 0 82,170 3 1 515,000 12,506 85 36 0 682,710 233,719 44,869 7,000 41,741 128,222 142,125 34,200
Day 4 Mon 04-Feb 2,716 121,676 18,710 5 3 1 5 656 1,286 73,794 4 10 670,000 81,591 340,398 0 0 2 165 609 51,084 3 1 500,500 15,900 2,810 39 25 673,212 222,480 39,625 5,000 41,198 116,548 159,841 34,200
Day 5 Tue 05-Feb 3,634 99,760 30,274 8 4 1 4 1,694 1,030 103,512 1 13 603,000 66,427 406,825 0 0 1 0 910 60,060 4 1 470,000 28,649 1,625 32 25 673,755 222,324 35,722 1,000 39,859 127,030 170,500 34,200
Day 6 Wed 06-Feb 3,644 107,093 33,340 6 7 0 3 1,835 1,433 124,184 0 14 542,000 60,787 467,612 2 0 1 0 376 24,816 4 1 452,000 17,618 15,722 23 25 661,090 226,546 33,212 0 35,649 146,581 170,913 0
Day 7 Thu 07-Feb 2,817 97,897 23,244 5 7 0 4 200 2,016 84,208 6 0 1,007,000 74,653 542,265 3 0 2 601 0 39,666 4 0 590,000 4,333 18,911 9 25 661,090 226,546 0 0 0 146,581 170,913 34,200
Day 8 Fri 08-Feb 2,809 116,377 24,526 5 7 0 4 268 2,045 87,894 6 3 926,000 80,606 622,871 3 1 2 496 0 32,736 4 0 18,484 6,042 16 25 661,090 230,729 25,259 20,840 34,200
Day 9 Sat 09-Feb 2,663 100,676 26,456 2 3 4 4 990 1,341 88,578 6 3 867,000 59,463 682,334 3 1 2 332 0 21,912 4 0 17,483 8,973 36 25 661,470 229,249 36,709 2,000 32,701 34,200
Day 10 Sun 10-Feb 1,830 127,105 29,421 3 3 3 6 1,487 0 56,506 6 3 785,000 82,319 764,653 3 1 2 343 0 22,638 4 0 549,000 23,351 6,070 31 25 653,308 214,164 43,255 7,000 38,840 176,099 132,366 34,200
Day 11 Mon 11-Feb 3,383 103,653 29,181 3 7 0 4 1,310 1,096 91,428 2 9 719,000 65,817 830,470 0 3 1 161 816 64,482 5 0 529,000 20,594 8,587 24 0 652,559 206,258 35,228 9,000 33,171 127,963 154,682 34,200
Day 12 Tue 12-Feb 3,177 99,580 32,157 3 7 1 5 725 1,167 71,896 2 12 652,000 67,423 897,893 0 0 3 455 829 84,744 4 1 500,000 27,380 4,777 26 25 652,559 206,208 39,350 15,000 32,663 135,087 167,436 34,200
Day 13 Wed 13-Feb
Day 14 Thu 14-Feb
Day 15 Fri 15-Feb
Day 16 Sat 16-Feb
Day 17 Sun 17-Feb
Day 18 Mon 18-Feb
Day 19 Tue 19-Feb
Day 20 Wed 20-Feb
Day 21 Thu 21-Feb
Day 22 Fri 22-Feb
Day 23 Sat 23-Feb
Day 24 Sun 24-Feb
Day 25 Mon 25-Feb
Day 26 Tue 26-Feb
Day 27 Wed 27-Feb
Day 28 Thu 28-Feb
Responsible Person C hapman C hapman C hapman V ernon/ N elson V ernon/ N elson Jacques dL Jacques dL C hapman C hapman C hapman V ernon/ N elson V ernon/ N elson V ernon/ N elson C hapman C hapman V ernon/ N elson Jacques dL Jacques dL C hapman C hapman C hapman V ernon/ N elson V ernon/ N elson Jacques/ M art in C hapman C hapman Elisna Elisna C hapman C hapman J B reed t J B reed t J B reed t J B reed t J B reed t J B reed t
Frequency
10 20
14
8
5
6
PROCESSINGWASTE (Soft & Hard) ORE
8
5
Load & HaulStake
DrillingStake
ScreenPrimary Crushing
Presplit &
Buffer
TotalDrilling
Buffer Buffer Stake Buffer LabTotal Load & Haul Buffer Buffer Stake Buffer BufferDrillingLoad and Haul Lab Buffer Buffer Buffer Buffer BufferLoad-Out
BufferBuffer
200 000175 000
125 000100 000
250,000200,000
150,000100,000
BINMAK SOLUTIONSWe Deliver On Our Promise
TOC Production Flow Implementation
Daily Ops War Room
A Business Process with the objective of assessing the client's current asset management maturity against best
practices, as well as its asset performance against benchmarks. Recommendations are
made about improvement actions to address the main gaps.
Asset Management Improvement
4
4
Remove barriers to
performance
KPA: Asset Care PlansElement 1
Practice-Performance ModelAMI Approach
BINMAK SOLUTIONSWe Deliver On Our Promise
Asset Management Self
Assessment
Performance Measurement
Shutdown and Outage Management
Life Cycle Management
Support Facilities and Tools
Work Planning and Control
Defect Elimination
Contractor Management
Condition Monitoring
Maintenance Tactics
ERP Utilisation
Maintenance Management Strategy
BINMAK SOLUTIONSWe Deliver On Our Promise
0
1
2
3
4
5
BP and KPI MaturityBP Maturity
Excellence
Optimising
Preventing
Stabilising
Fire Fighting
BINMAK SOLUTIONSWe Deliver On Our Promise
Excellence
Optimising
Preventing
Stabilising
Fire Fighting
Fire fighting Stabilising Preventing Optimising Excellence
0
1
2
3
4
5
0 1 2 3 4 5
KP
I
BP
AM Maturity Assessment Summary
1. Strategy Management
2. Maintenance Tactics
3. Condition Monitoring
4. Work Management
5. Defect Elimination
6. Maintenace Facilities
7. ShutdownManagement8. ContractorManagement9. Asset Life CycleManagement10. ERP Utilisation(Ellipse)
BINMAK SOLUTIONSWe Deliver On Our Promise
Asset Management Priorities
Asset Life Cycle Management (LCM)– Restore critical production fleet capacity
– Mid-Life interventions for critical equipment
– Component Management
– Equipment lifecycle & deployment decisions
Set up a reliability department– Appointment of a Reliability Engineer
– Resourcing of the reliability department with the right skills
Organisational development– Resource the Engineering department with
the right skills
– Asset management training and coaching
Physical Asset Management Strategy – Formulation and implementation
– Communication and engagement
Physical Asset Register and Financial Asset Register Cleaning up, Updating, Structuring
Criticality Analysis: Equipment, Components and Inventory
Ellipse Implementation and Training
Work planning, scheduling and control
Work management and effective quality control
Maintenance Tactics selection for critical equipment
Defect Elimination
Establish SLAs with Key OEMs
BINMAK SOLUTIONSWe Deliver On Our Promise
100 Day Rapid Results Projects
A 100 day programme to kick-start the year long operational turnaround programme. The ultimate aim is to ensure that the right work is done at the right time and the right way by:
Mobilising & energising teams
Shifting the focus onto results ·
Empowering staff to unlock their full potential.
Delivering sustainable change.
Inspiring culture change & Motivation.
Driving innovation & employee ownership
BINMAK SOLUTIONSWe Deliver On Our Promise
Rapid Results Roadmap
BINMAK SOLUTIONSWe Deliver On Our Promise
Operation XXX
Winning the Hearts & Minds and Empowering our employees
BINMAK SOLUTIONSWe Deliver On Our Promise
Results Of Turnaround
Strategy On Production
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
1-Jan 1-Feb 1-Mar 1-Apr 1-May 1-Jun 1-Jul
Coal Production Tons 2017
Actual Budget
Introduction to Binmak
Turnaround Strategy Steps
Operational Turnaround Strategies
Case Studies
Operational Turnaround Results
Agenda
BINMAK SOLUTIONSWe Deliver On Our Promise
Trucks & Shovels Performance Improvement
Project
Average Total Tons Handled/day
*OEE – Overall Equipment Effectiveness – Good OEE = 63%, Great OEE = 72%, Benchmark
OEE Improved from 51.1% to 64.8%
Total Tons handled increased from 218kt/d
to >300kt/d
Baseline Performance = 275t/day
Mining Target for with current fleet
and waste aspirations = 320kt/day
Focus for 2010 :
• Sustain the current performance of Trucks and Shovels
• Focus on Secondary Equipment to support
the Increase in OEE’s and fleet sizes of mining equipment
• Implementation of Tips of Mining now in implementation at
Drilling and Blasting (Pilot)
• Unmanned Equipment despite over compliment of staff
• Discipline – how should FLM address generic issues
• Mining Technical Training Program
150000
170000
190000210000
230000
250000
270000290000
310000
330000
Bas
elin
e
Mar
Ap
r
May
Jun
Jul
Au
g
Sep Oct
No
v
Dec
Jan
Feb
TTH Baseline 2 per. Mov. Avg. (TTH)
Baseline increased
with increase in Fleet
BINMAK SOLUTIONSWe Deliver On Our Promise
Drilling & Blasting Performance Improvement
Average Meters Drilled/day
*OEE – Overall Equipment Effectiveness – Good OEE = 50%, Great OEE = 65%, Benchmark
OEE Improved from 39% to
48.1%
Total average meters drilled
increased from 1598m/d to ~
2350m/d
PRODUCTION
DRILLS10001500200025003000
Bas
elin
e
Jun
Jul
Au
g
Sep Oct
No
v
Dec
Jan
Feb
Meters/Day Baseline 2 per. Mov. Avg. (Meters/Day)
Baseline increased with
increase in Fleet
Focus for 2010 :
• Consolidation of Mining Improvement Projects – Drilling &
Blasting pilot section for implementation• Unmanned Equipment despite over compliment of staff
• Discipline – how should FLM address generic issues
• Operators available to undergo the behavioral
workshops
• Block Preparation
• Critical Tasks BI Target = 2550 m/day
BINMAK SOLUTIONSWe Deliver On Our Promise
Initiatives Implemented• Increase Shutdown interval from 4 to 6 weeks, adding 6 prod. days = 240kt
(Changed chemical composition of Secondary Concave Liners)
• Increase Tertiary Crusher & JIG ROM Supply,by addressing screen efficiencies, liner life,secondary crusher settings and ROM
Quantity and Quality supply. Q4 2009 produced an additional 103.4kt.
• Improvements on JIG Level sensors in the hutch tank and reducing the vibration on pump pressure sensors reducing the
sensors replaced/m from 25 to 1.75.
JIG Plant Performance Improvement Project
JIG Module Run Hours per week
To Achieve budget of 12.6 Mt/pa we need to
have 19.9 Run hours/day.
To achieve BITarget of 13Mt/pa we need 20.5
run hours/day
10
11
12
13
14
15
16
17
18
19
20
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
= Budget = BI Target
JIG product increased from 32.5Kt/d to > 40Kt/day
ROM Supply and throughput increased from 58.7 tot 61.2 kt/day
Run Hours of Jig Plant improved from 17.1 h/d to 18.9 h/d.
Focus Areas:Next generation of impprovment Projects to specifically increase
the Run Hours of the JIG plant to the Target of 20.5/day.
• Stackers & Re- Claimers
• Blockages
• Gates sticking & wearing
• RCA
• PAM Strategy
BINMAK SOLUTIONSWe Deliver On Our Promise
76
Implementation of volume growth projects and enhancing fleet efficiencies will reduce unit cost (ZAR Real)
Implementing volume
growth projects will
result in 9% reduction
in unit cost
219
201
192
150
160
170
180
190
200
210
220
230
240
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
R/t
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Sishen Mine - Growth and AO Impact on Unit Cost (FOR)
Sishen Mine, base After Growth Projects After AO
Growth Projects: SEP1B, Jig Discard, DMS Conc, Slimesdams Conc
Enhancing fleet
efficiency through
AO and phasing
out of contractors
evident from 2014
will further reduce unit cost by 4%
Asset Optimisation Impact on Unit Cost
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Asset Optimisation Value Creation
Operating Profit $m Reported From Improvement Projects
16.80
70.00
17.403.40 1.00
16.80
12.701.90
0.0010.0020.0030.0040.0050.0060.0070.0080.00
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