ghana mining and energy summit

Ghana Mining and Energy SummitInnovation: From Finance to Mine Tailings Management

Craig Sillars

May 2017

Presentation Summary

Finance• UK Export Finance – Introduction

• GKB Ventures – Creating Financial Solutions

• DINTS – Award winning Inventory Management

Mine Tailings Management and Process Improvement

• Intelliesense – Big Data Management

• Catapult – Satelllite Solutins

• Sensor UK – Memberane Integrity Testing

About UK Export Finance

• We are the UK’s export credit agency, and a Government department, with nearly 100 years’ experience in helping UK companies to export their goods and services overseas.

• We play a central role in the Government’s ambition to ensure that no viable UK export fails for lack of finance or

insurance, working with our colleagues in the Department for International Trade.

• We help UK companies acquire the funding required to win, fulfil and get paid for export contracts.

• We do this by providing insurance and other financial support which complements what is available from the private market.

• We can support exports for any size of company and across all sectors, from capital goods to services and intangibles such as intellectual property.

Innovative support for project buyers• Our long-term financing solutions, in the form of direct loans or unconditional guarantees to banks, allow buyers to spread costs of

purchases of capital goods and services from the UK

• Repayment terms of 2-10 years (extending to 14 for project finance and 18 for renewable energy)

• Support for up to 85% of total contract value, provided there is a minimum of 20% UK content

• Additional capacity to provide direct lending with fixed interest rates

• Financing in a range of local currencies

• Flexibility to meet buyers’ requirements (including innovative products such as Islamic financing)

• UKEF charges a premium for its support based on OECD rates and calculated on a case by case basis, taking into account factors such as

credit risk and loan tenor

• Premium is paid upfront and can be funded from the loan to spread the cost

• Premium is a one-off charge and is separate from the interest charged on the loan

5

Product suite recap

Letter of Credit Guarantee Scheme

A guarantee of up to 90% of the value of a letter of credit to enable UK exporters to get their letters of credit confirmed by their bank

Export Insurance Policy

Up to 95% insurance against the risk of not being paid, either due to default by the buyer, or due to specified political, economic or administrative events

Bond Support Scheme

A guarantee of up to 80% of the value of a contract bond (eg. advance payment guarantees, performance or warranty bonds) to enable a bank to issue a bond without requiring as much of the exporter’s cash as collateral, or to issue more bonds on behalf of the exporter

Bond Insurance Policy

Up to 100% insurance against a demand for payment under a bond, which is either unfair or caused by political events

Export Working Capital Scheme

A guarantee of up to 80% of the value of a working capital facility, to allow a bank to increase its capacity to lend to a UK exporter

Buyer Credit Guarantees

Provision of guarantees against bank loans to overseas buyers of UK exports for up to 85% of the contract value, enabling the buyer to pay on extended credit terms, normally of between 2-10 years

Win contracts Fulfil contracts Get paid

Direct Lending Facility

Provision of loans directly (working with a bank as an agent) to overseas buyers of UK exports for up to 85% of the contract value, enabling the buyer to pay on extended credit terms, normally of between 2-10 years

Innovative finance for Ghana

UKEF has provided US$ 400 million in finance for Ghana’sOffshore Cape Three Points Project – $310 million directlending, $90 million buyer credit

The finance supports a GE Oil & Gas contract Following first gas production in 2018, the new fields are

expected to continuously feed Ghana’s thermal powerplants for more than 20 years

It is the first upstream oil and gas development transactionwhere a European ECA has supported a major hybridfinance structure comprising both project finance andreserve-based lending

Benefits That the ECAs can Provide

Benefits to the Buyer

• Competitive Financing terms

• Long Tenors (10 -18 year Repayments)

• Low costs (cheaper than the commercial market)

• Low cost of carry

• Liquidity – access new sources

• Flexibility. Ability to structure interest rate, FX, Multicurrency, Commodity optionality

• Less restrictions – no clear market or credit rating requirements. Less restrictive covenants

Benefits to the Supplier

• Protects against commercial and political risks

• Provides payment mechanism on fulfilment of contractual milestones

• “Off Balance sheet” to the supplier

• Used as a tool to “win” contracts

• Provides Geo-political support

• Bonding, working capital, FX support often also available

Confidential Growth through global trade 7

Benefits That the ECAs can Provide

Benefits to the ECA

• ECAs are Government bodies that provide support to their domestic exporters

• They have a number of goals:• Promote International Trade• Improve their domestic economy• Increase their exporter numbers • Improve overseas relations • Widen their sphere of influence

• ECAs operate within the OECD Consensus …but some are more flexible

• Competition between the ECAs is very active. Reflecting the global economic enviroment

But there are Limitations….

• Processes, procedures and what is

truly available is not very transparent

• ECAs only provide support if they feel they have to

• From the outside can look cumbersome and inflexible

• Rules on eligibility / local costs / Local currency etc. can often seem archaic

• Pre-position is key……….


3 Stages of Approach

Stage 1: Analysis of the Potential to obtain ECA supportWhat is the Art of the Possible from the ECAs

Stage 2: Support through Structuring to Financial Close

Make contracts effective. Obtain financing in a more effective manner

Stage 3: Post closing SupportSmooth seamless operation. Review Support for the Next Transaction


Background to GKB Ventures LTD

Leveraging Knowledge & Experience

Delivering results with High Market Acclaim

• Gabriel Buck, ACIB [email protected]: + 44 (0) 7767 374 323

• Ed [email protected]: + 44 (0) 7971 197 571

10

mailto:[email protected]

mailto:[email protected]

Dints Financed Supply Contract

11

Financed Supply Contract

Major OEMs

Global Supply

Network

OPM

Products

Alternative

Brands

Product Trials

Inventory

Management

Support

Pay as you

usePay over time

Reman Rebuilds

Min/Max

Optimisation

Lead Time

Optimisation

Selected Supply

Lines

Warranty

Support

OPEX Procurement Support Future

PILOT

Project

Technical

SupportIn-country

Presence

Full Managed or

Financed Supply

Contracts

Overview of Finance Supply Contract

12

Corporation Guarantee

Mine SitesBank

Revolving Facility

Dints

Supply Contract

Tri Partite

Agreement

UKEF Guarantee

Goods Received at

Mine

Goods Shipped

from Country of

Origin

Items over [$00,000]

Invoice: [Quarterly]

Straight Line amortisation

over [21] months from T1

Mine

Authorises Order

List

T1 T2

80% of shipment

value drawn

15% of shipment

value drawn

[$00m] Pilot Facility with appointed bank

Items under [$00,000]

Invoice: Issue + 30 Days

or

[17] Months from T1

Payment by Mine for

95% of shipment

5% of shipment

value paid to Dints

directly by Mine

Contractual

Relationships

Payment

Model

Process Overview

13

Export File Created at

Port of Origin

Order List Confirmed.

Actioned by Dints

Dints initiates

discussions with Mine

FPA ProposalsECA/Bank

Approached to set up

a facility

Facility Confirmed

FPAs Created and

Actioned

Direct Procurement

Starts Through RFQ

ands POs

Contract negotiations

with ECA, Bank and

ClientMin/max optimisation

Mine Signs letter of

engagement

Suppliers Paid by

appointed Bank

Material Shipped

Good Receipt File

Created on arrival on

site

Min/Max and Product

optimisation Monthly Order Cycle

Annual Planning Cycle

Identification of

further Sites (if

applicable)

Supply Lines added

Facility Limit Set

If Required

Dints In Country

Support as required

Key Supplier

Engagement

Key Client

Engagement

Dints

Activity

Dints identify other

supply lines for the

facility

Main Flow

CyclesKEY

FPA moved to

Financed Supply

Agreement

Innovation: Mine Tailings Management

• With a metals cycle boom, bust and recovery over a 3 year period there has also been some of the biggest and most publicized incidents in the sector:

• Mount Polley, Canada (August 2014) Total: ~$391M CAD

• Buenavista del Cobre, Mexico (August, 2014) ~$148M USD

• Samarco, Brazil (November 2015) ~$6B USD

• Herculano, Brazil (September 2014) ~$540M USD

• Drawing a parallel to the chemical industry, events that caused a significant major change in standards being developed that were far reaching, prescriptive, and auditable globally.

• Bopal

• Flixborough

• Texas city

• Piper Alfa

• Massive disasters which resulted in standards being implemented which are still used today

• Changes which resulted in the development of some of the hazard identification techniques commonly used in the world today

• HAZOP

• BowTie

• Dow F&E index

• Process safety

Initial Conclusion on Failures

• Initial Geotechnical Design is correct for prevailing conditions

• Data collection initiated

• Over time the specific reason for the data and the parameters within which they are reviewed are forgotten

• Process changes, life of mine, tailings expansion without going back to first principles etc

• Operational Management is key cause of failure

• What are the solutions

Intellisense - NO CAPEX. NO SOFTWARE. JUST INSIGHT.

Thickener Circuit Optimisation

Pipeline System Optimisation

In-Situ Leaching Monitoring & Optimisation

Tailings Dam Monitoring & Automation

Intellisense – Key Clients

Anglo American

BHP Billiton

Antofogasta

Codelco

Kazatomprom

PROJECT OBJECTIVE SAG MILL OPTIMISATION & INNOVATIVE INSTRUMENTATION DEVELOPMENT (SMOID)

IntelliSense.io was selected to optimise the operation of an energy-consuming Semi-Autogenous Grinding (SAG) milling process at MineraCentinela, part of Antofagasta Minerals, by providing innovative technologies to provide a solution to optimise energy consumption.

Challenges• Ore hardness increases as mines become deeper, which requires more energy to reduce the particle size.

• Harder ore types increase the energy needed to reduce the particle size required to adequately liberate enough of the valuable metal.

• An inefficient control of a SAG mill’s internal charge impacts energy efficiency.

• Any increase in ore hardness decreases throughput, increases energy consumption and accelerates liner and grinding media wear rates.

• The Minera Centinela SAG mill is one of the largest in the world (40’ diameter, 22,380kW power draw).

• The SAG mill consumes nearly 80 percent of the mine’s total energy consumption.

Benefits• Increased downstream stability, recovery and throughput

• Real-time optimisation routines to reduce energy consumption

• Expected optimised liner wear rate

• Delivers a simulation environment to test optimal operational scenarios without disrupting production

Sensors• Sensors - Measure and monitor the charge in the SAG in real time, by

deploying innovative, robust, weather hardy accoustic sensors combined with power management techniques to maximise battery life.

• The new wireless charge sensor hardware uses state-of-the-art energy harvesting technology ensuring long term battery life, which increases data reliability and reduces operational disruption.

Simulation• Simulation - Live simulation of the SAG mill utilising existing

operations and new sensor data delivers insights on the charge model properties and wear rate.

• The simulator is used to test the impact of process optimisation opportunities, resulting in the delivery of continuous optimisation.

• A variety of advanced statistical methods are used to identify patterns in process bottlenecks and deliver predictions on future system performance under various load conditions.

• The simulator allows operators to test set point changes offline to take the risk out of implementing.

Optimisation

• A material model categorizes and tracks the material from geological models through transportation and blending.

• Financial metrics are correlated with the material model to determine optimal particle size distribution for recovery.

• Insights provide opportunity for proactive rescheduling to ensure continued operation at the maximum possible productivity and efficiency rates.

Project OureaMine Tailings Management – El Mauro

Dr Estel Blay

Commercial in Confidence

Our Mission:

To innovate for a better

world, empowered by

satellites.

Who are we?

• We are an innovation and technology company We’re helping organisations make use of, and benefit from, satellite technology and data by

bringing teams together to generate ideas and solutions.

• We are independent

We bring to together end users, academia, SME’s, industry and government from

across sectors to collaborate.

• We are creating a global impact

In 2015 – 2016:

• Rapid prototype to help articulate our vision

• Example Site – Tailings Dam in Chile

• 2 Months Development Feb-Mar 2016

• Joint project between the Advance Digital Intelligence and Visualisation and Applications teams

• 3D Visualisation powered by gaming technology

• High-resolution satellite imagery and digital elevation models

• User friendly, common controls and behaviour

• Environmental events shown as simple and powerful visualisations

Project Ourea Mine Tailings Management – El Mauro

Sensor UK• INVENTORS OF WORLD LEADING SENSOR DDS® GEOMEMBRANE LEAK & LOCATION

SYSTEMS

A world class “Zero Leakage” Geomembrane Integrity Monitoring company. Have 26 years of pioneering experience applied worldwide in 46 countries on 5 continents.

• Our technology brings another level of QC to the installation of liners giving our clients unprecedented security, guaranteeing to be leak free at completion of construction; with the option of ongoing integrity monitoring either locally, or remotely 24/7.

• SENSOR DDS® electronic leak detection systems have been successfully deployed in various mining industry applications

Leach pad Storm Ponds Process Ponds Heap Leach

Tailings Ponds Canal/Channel Linings Leachate Lagoons

Sensor UK

• Statistically there is a near certain, 96.7% chance of damage to the Geomembrane during and immediately after construction, causing leakage (sample of 20,000,000m2). In the mining industry this means loss of product through geomembrane damage (as much as $50,000/ha/annum).

• To avoid this, testing should be carried out on the membrane, pre-and post covering and also through its service life, to ensure that you receive the protection from the geomembrane you invested in!

• Additionally, our monitoring systems can detect areas of low saturation on the heap leach itself to ensure maximum output from each load of materials.

Sensor UK

• As a side benefit you can also cite the environmental benefits of the installation in order to gain operating permits and pacify objectors.

• Finally, one major benefit of geomembrane integrity monitoring is the ability to prove to officials that your site has never leaked from the day of construction, meaning that they must look to others for the cause of any symptoms of contamination.

Conclusion

• Mining is changing

• Miners are retiring leaving a gap in the market

• Technology will be a critical substitute

• UK home to many technology providers coming from oil & gas and bespoke development (e.g. microwave technology)

• Coupled with innovative finance solutions Africa can benefit from the new age of mining

ghana mining and energy summit

Documents