“FIRST THE ASHES… AND NOW THE RESOURCES” Melbourne Mining Club – 5th June 2014

2

ESTABLISHING MY CREDENTIALS I am also a mining engineer…

…that has traded his Baggy Green Cap for a Hard Hat.

3

ESTABLISHING MY CREDENTIALS I come from Wollongong…the intellectual capital of Australia…

…where we like to dress up…and wear colourful hats.

4

ESTABLISHING MY CREDENTIALS A more accurate photo taken with a “special movie star” lens…

….

5

ESTABLISHING MY CREDENTIALS A more accurate photo taken with a “special movie star” lens…

….

6

TRANSFORMATION STARTS WITH LEADERSHIP What changed…a loss in 2013…to a 5 nil whitewash 6 months later…

…but can they take it forward and create a new dynasty?

What changed?

• Home ground advantage? • Darren Lehman? • The colour of their underwear?

Is winning sustainable?

• Leadership & Talent…do they have the

leadership and talent to take success forward…possibly but not yet convinced?

• Systems and processes…are they technically superior…batting looks brittle.

• Innovation…still lagging the India T20 transformation!

Learning from the past?

• A dynasty requires all three…

7

THE AUSTRALIAN CRICKET STORY A chronology of events helps to paint a picture…

…the “Invincibles” set the standard…but a rapid decline follows.

1948 – The “Invincibles”…62% Don Bradman & a great side Brilliance on all technical elements × The tradition continues…

1950s – A Good Team…….42% Richie Benaud & a good side × A strong technical side, but not brilliant × The tradition continues…

1960s – The Slide …………36%

× Bill Lawry takes boredom to a new level × A solid team…but… × The tradition continues…

8

THE AUSTRALIAN CRICKET STORY A rebirth begins with a brash new captain…

…and the seeds of “disruptive innovation” are sown.

1971 – The New Era………..50% Ian Chappell captains his first test Technically competent…DK Lillee et al × The tradition continues…

1976 – The Montreal Olympics • Australia wins 1 silver medal • Malcolm Fraser announces Royal

Commission into “decline of sport” • Australia demands a new vision

1977 – The Packer Circus

• Chappell leads team into WSC • Shakes the core of the establishment • Australia becomes “professional”

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THE AUSTRALIAN CRICKET STORY A brave captain rebuilds from the ruins of unguided disruption…

…leadership meets “disruptive innovation”.

1980s – Border Years…….32% Rebuilds the foundations • 1987 CRICKET ACADEMY established • Australia rebuilds – wins World Cup and

starts to believe in possibilities

1994 – Mark Taylor………..52% Intelligent leadership Talent emerges and is nurtured • Innovation starting to impact

1999 – Steve Waugh………72%

The science of leadership…with talent A new standard in technical application The end product of disruptive innovation

10

THE AUSTRALIAN CRICKET STORY A leadership forged in a new world…a “dynasty” emerges…

…and dominates the sport for more than 15 years.

Leadership The power of symbols… Understanding structure and processes… Setting new expectations on delivery

Structure and Processes Building on science…technical focus Strengthening the weakest links Every session had to be won

Disruptive Innovation

The Packer changes…winning is the game

Institute of Sport – science meets cricket Organisation and deliberate leadership

strategies become a winning edge

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MINING: PATHWAY TO VALUE The lessons we can learn are universal…

…and our performance is only constrained by our imagination.

Leadership What is possible… The power of symbols… Capable people doing the right work…

Structure and Processes Resources define potential… Mining strategies focus on potential… Managing processes delivers potential…

Disruptive Innovation

People approaches drive productivity… Technologies step-change costs… Market demand can be created…

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LEADERSHIP…

ORGANIZATION • Strategy defined to rebuild value………………………...“Driving Value” • Business groupings reflect strategy elements……..global market mix • Focus on rebuilding “core skills”...........................mining and markets

TALENT POOL • Levels of work…………………………………......managing complexity • Top 3 levels

• At start, 50% capable…………………………………now at +70% • 141 now down to 99…….............................clear accountabilities

SYMBOLS • Selling the jet and other “corporate conveniences”……..value focus • Focus on delivering……….......................................11% now at 48% • Asset reviews identify the 5 key issues.…………………...what to fix

An “Organization Model” is more than job descriptions…

…and the organisation is the STARTING POINT for driving change.

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1 2 3 5 4

9%2%

71%

15%

4%

LEADERSHIP...

Sishen Kolomela Capcoal Los Bronces Mogalakwena

Collahuasi Jwaneng Orapa

(1) Total of 52 assets at Q1 2014 versus 55 assets at Q1 2013. Excludes both Khomanani and Khuseleka (no longer in production) and Union North and Union South are now reported as Union mine

Moranbah Cerrejón Snap Lake

Bathopele

40%

8%

48%

0%4%

Collahuasi Jwaneng Orapa

Sishen Kolomela Moranbah Capcoal Los Bronces Mogalakwena

Cerrejón

Kimberley Bathopele

1 2 3 5 4

4 Quarters to Q1 2013

Q1 2014 Only Failure to deliver can become a habit…it can become the culture…

Q1 2014

…where delivery must be an expectation.

2012/2013 Performance Delivery

• 19% of operations under budget with no plan for recovery

• 71% of operations under budget with a plan to recover

• 9% on budget

2014 Performance Delivery

• 4% of operations under budget with no recovery plan

• 48% of operations under budget with a validated recovery plan

• 48% of operations on budget. …and delivering a $1.2bn EBIT run rate improvement per Driving Value.

14

“THE CRITICAL PROCESSES”

Note: Assets mapped to curve based on largest impact for improvement

Valu

e cr

eatio

n

Pathway to Value

Ore body Capability

Methods & Design

Operating Parameters

Planning & Scheduling

Continuous Improvement

Best Practices

Resource-to-market

Resource Potential

Understand Operating Options and

Value Configuration

Driving Performance

Endowment

15

PATHWAY TO VALUE: “THE CRITICAL PROCESSES”

Note: Assets mapped to curve based on largest impact for improvement

Valu

e cr

eatio

n

Pathway to Value

Ore body Capability

Methods & Design

Operating Parameters

Planning & Scheduling

Continuous Improvement

Best Practices

Resource-to-market

Resource Potential

Understand Operating Options and

Value Configuration

Driving Performance

Endowment

1 2

3

16

RESOURCE POTENTIAL: MOGALAKWENA

Recognising resource potential is the starting point… Daily tonnes mined 2013 – 2014 YTD (including contractors)

New shovel

…pushing from 300kozs to 360kozs…to 420kozs…to ???.

+50%

17

PATHWAY TO VALUE: “THE CRITICAL PROCESSES”

Note: Assets mapped to curve based on largest impact for improvement

Valu

e cr

eatio

n

Pathway to Value

Ore body Capability

Methods & Design

Operating Parameters

Planning & Scheduling

Continuous Improvement

Best Practices

Resource-to-market

Resource Potential

Understand Operating Options and

Value Configuration

Driving Performance

Endowment

1 2

3

18

Original cut back sequence

New cut back sequence

Method and design changes Mined out

Future cut

Current waste cut 30Mt (1Year)

New waste cut 30Mt (1Year)

Future cut

Mined out

PLAN

PLAN

SECTION

SECTION

Waste mined in 1 year does not expose the ore

Waste mined in 1 year exposes the

ore in the New Plan

MINING METHODS: MOGALAKWENA

19

0

100000

200000

300000

400000

500000

600000

700000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57

Eq. r

efin

ed P

t oz

BP14 (L1) Step 1

MINING METHODS: MOGALAKWENA

1. MSC = Mogalakwena South Concentrator; 2. MNC = Mogalakwena North Concentrator; 3. MCC = Mogalakwena Central Concentrator

Total Tonnes Mined

Platinum Ounces

-

50

100

150

200

250

14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100

Tota

l ton

nes

min

ed [M

t]

BP14 Step 1

Step 1

Step 1

20

0

100000

200000

300000

400000

500000

600000

700000

14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70

Eq. r

efin

ed P

t oz

BP14 (L1) Step 1 Step 2

MINING METHODS: MOGALAKWENA

1. MSC = Mogalakwena South Concentrator; 2. MNC = Mogalakwena North Concentrator; 3. MCC = Mogalakwena Central Concentrator

Total Tonnes Mined

Platinum Ounces

-

50

100

150

200

250

14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100

Tota

l ton

nes

min

ed [M

t]

Step 1 Step 2

Step 2

Step 2

21

0

100000

200000

300000

400000

500000

600000

700000

14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70

Eq. r

efin

ed P

t oz

BP14 (L1) Step 1 Step 2 Step 3

MINING METHODS: MOGALAKWENA

1. MSC = Mogalakwena South Concentrator; 2. MNC = Mogalakwena North Concentrator; 3. MCC = Mogalakwena Central Concentrator

Total Tonnes Mined

Platinum Ounces

-

50

100

150

200

250

14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100

Tota

l ton

nes

min

ed [M

t]

Step 1 Step 2 Step 3

Step 3

Step 3

22

PATHWAY TO VALUE: “THE CRITICAL PROCESSES”

Note: Assets mapped to curve based on largest impact for improvement

Valu

e cr

eatio

n

Pathway to Value

Ore body Capability

Methods & Design

Operating Parameters

Planning & Scheduling

Continuous Improvement

Best Practices

Resource-to-market

Resource Potential

Understand Operating Options and

Value Configuration

Driving Performance

Endowment

1 2

3

23

DRIVING VALUE…IMPROVING THE PROCESS So what does an F1 car have in common with a box?

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DRIVING VALUE…IMPROVING THE PROCESS So what does an F1 car have in common with a box?

…it is about people…and the desire to achieve a better outcome.

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DRIVING VALUE…IMPROVING THE PROCESS So what does an F1 car have in common with a box?

…it is about people…and the desire to achieve a better outcome.

Six Sigma

Lean Manufacturing

Integrated Asset Planning

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Strong productivity increases…100%... at Moranbah…

020406080

100120

Jan 12

Jan 14

Jul 13

Jan 13

Jul 12

Moranbah

0

50

100

Jul-12

Jan-13

Jan-12

Jul-13

Jan-14

Grasstree

Longwall move

Longwall move

Longwall move/Drift collapse

Longwall move

Longwall move

Longwall move

LW hours

LW hours

…Grasstree starting to show…+30%...encouraging performance.

IMPROVING THE PROCESS…MORANBAH

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PATHWAY TO VALUE: THE MORANBAH JOURNEY

Note: Assets mapped to curve based on largest impact for improvement

Valu

e cr

eatio

n

Pathway to Value

Ore body Capability

Methods & Design

Operating Parameters

Planning & Scheduling

Continuous Improvement

Best Practices

Resource-to-market

Resource Potential

Understand Operating Options and

Value Configuration

Driving Performance

Endowment

MET. COAL

MN- 2014 MN- 2013

MN- 2012

3.5mtpa 5.5mtpa

7.0mtpa

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Focus on operating strategy and consistency and control…

…delivers a 30% production improvement and 20% cost reduction.

IMPROVING THE PROCESS…BARRO ALTO

29-05-201408-04-201418-02-201429-12-201310-11-201326-09-201312-08-201328-06-201314-05-201301-04-2013

7000

6000

5000

4000

3000

2000

1000

Q2-13 Q3-13 Q4-13 Q1-14 Q2-14

1

1

22222

1

1

1

2

2

2

1

11

11

111

1

22

2

22

2

2

22

2

22

2

1

1111

1

1

22

22

2

222

11

22

222

2

2

3

3

2

2

2

1

2

1

1

1

11

1

11111

11

1

1

1

2

222

1

1

2

2

2

111

2

2

22

22

2

2

2

11

1

111

11111222

2

222

2

2

1

2

2

22

1

1

11

2

22

Control Charter Q2-13 to Q2-14 Throughput (tms)_ X = 4520

UCL = 6805

_ X = 5151

_ X = 5392

_ X = 4956

UCL = 7062 UCL = 6573 UCL = 6474

LCL = 2566

LCL = 5018

UCL = 7162

_ X = 6090

BARRO ALTO CONTROL CHART – YTD MAY

Strategy Intervention

29

PATHWAY TO VALUE…KEY ASSETS

Note: Assets mapped to curve based on largest impact for improvement

Valu

e cr

eatio

n

Pathway to Value

Ore body Capability

Methods & Design

Operating Parameters

Planning & Scheduling

Continuous Improvement

Best Practices

Resource-to-market

Resource Potential

Understand Operating Options and

Value Configuration

Driving Performance

Endowment

MET. COAL IRON ORE

PLATINUM COPPER

NICKEL THERM. COAL

M PH

T S L BA

K O

COL

LB

J

MN GT N C

DIAMONDS Nb&P

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DISRUPTIVE INNOVATION The face of mining is radically changing…because it has to…

…and those that get it right will lead the industry in returns.

Technologies New mining methods Open technology platforms Application of material sciences

People Managerial leadership Engagement drives practices Learning from the “restless innovators”

Projects and construction

Digital design and construction Modular configuration Communities and the MOTF

31

WHAT’S IN A HAT? Leadership is a journey…and every step is into the unknown…

…its not the outcome we debate…it’s the pathway to get there.

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ANGLO AMERICAN

REAL MINING. REAL PEOPLE. REAL DIFFERENCE.

THANK YOU