Solutions and life cycle services for the entire Minerals Processing value chain Life cycle solutions

Solutions and life cycle services for the entire

Minerals Processing value chain –

Life cycle solutions

Kalle Härkki

President of Minerals Processing business area

Outotec CMD 2013

December 4, London

Minerals Processing

Comprehensive offering for processing of

virtually all ore types

Sustainable solutions from pre-feasibility

studies to complete plants and life cycle

services.

More than a century of experience and strong

R&D capabilities for continuous creation of

world-leading technologies in-house.

2

Solutions for Peers andcompetitors

Concentrators Comminution

Flotation Dewatering

Services

Operation & maintenance

Andritz, BGRIMM, CITIC, FLSmidth,

Krupp Polysius, Metso, PERI, Tenova (Delkor), Thermo Fisher, WesTech,

Xstrata Technology

CMD 2013 Dec 4

Minerals Processing

Operating profit from business operations *) 59.6 73.5 -19 20.2 31.5 127.6

Operating profit margin from business operations, % 9.7 11.5 - 11.7 13.9 13.8

0 % 2 % 4 % 6 % 8 % 10 % 12 % 14 % 16 % 18 % 20 % 0 50 100 150 200 250 300 350 Sales Operating profit, %*)

*)_{excl. one time items and PPA}

*)_{The unrealized and realized exchange gains related to currency forward contracts} increased profitability by EUR 3.6 (0.0) million in Q1-Q3 2013.

Sales and operating profit*) _development

_{Highlights in Q1-Q3}

Strong service sales, lower sales from

capex

Profitability impacted by lower overall sales

and service product mix (higher share of

expert service vs proprietary spares)

Significant minerals processing technology

orders from Grupo Peñoles (EUR 47

million)

CMD 2013 Dec 4

Strategic intent and focus in the value chain

CMD 2013 4

Sustainable end-to-end solutions from feasibility studies to complete plants and life cycle services for virtually all ore types

Extensive range of sustainable process solutions for virtually all types of ores and

concentrates and sulfuric acid, turn-key delivery and life cycle services

Industrial

water

treatment

Refining

Energy

Minerals processing

discharge standards, maximize water recycling and reduce water and energy consumption

Innovative solutions for biomass, coal, sludge, agricultural and

industrial by-products, sorted waste as well as oil winning from oil shale and phosphorus recycling from sewage sludge ashes.

The leading provider of sustainable

minerals and metals processing

solutions...

... and an innovative provider

of sustainable energy and

water processing solutions

Extensive research facilities and resources, numerous BAT technologies

CMD 2013 5

R&D and testing

FLOTATION

• High recovery rate

• Optimized energy and chemical consumption

AUTOMATION PLATFORM

• Advanced process controls

• Remote monitoring • Automation equipment COMMINUTION Crushing, screening, grinding • Optimized energy consumption

• Optimal grinding media consumption

Outotec offers sustainable lifecycle solutions

for full concentrator plants

Optimized project execution Operation and maintenance Shutdown services Upgrades & Modernization Supply chain management DEWATERING Thickening, Clarifying, Tailings treatment

• Maximized water recovery

• Optimized chemical consumption

Filtration

• High separation efficiency

Quality, Environment, Health, Safety Process expertise Maximized plant productivity Optimized operating costs Dec 4

MP: Flotation upgrade: Çayeli Bakir

letmeleri A. . (Turkey)

6

Key facts:

Owned by First Quantum Minerals

Underground Cu/Zn Mine in northeastern Turkey Cu Conc: 150,000 tpa & Zn Conc: 100,000 tpa Overall contract value:

500.000 € over a period of 3 years (Ongoing) Customer benefits:

Better metallurgical performance Flotation cells used energy reductions

Reduction in operational costs due to lower wear

Estimated customer value:

Approximately 1% increase in recovery for both Copper and Zinc circuit = 1.200.000 €/Y

Power savings estimated to be 200.000 €/Y

OUTOTEC’S CONCENTRATOR

SOLUTION - VIDEO

CMD 2013

Numerous concentrator equipment in operation

CMD 2013 8

Extensive research facilities and resources, numerous BAT technologies

1,100 grinding mills

10,000 flotation units

1,800 thickeners

3,500 filters

Outotec Grinding mills LKAB,Sweden

Outotec Tankcell®_{flotation units}

Kevitsa, Sodankylä, Finland

Services has met its growth targets

Annual Service Sales

Service sales Service sales Q1-Q3

EUR million

292

352

Growth has been achieved through:

•

Strengthening local presence

•

Addressing installed base

•

Productizing service offering

•

Organizational development

•

Scalable operational model

•

Acquisitions and successful integration

Life cycle value for customer

Life Cycle Solution

Value for Customer

Technology &

Process design

•Plant process layout •Proprietary equipment •Process guarantees

• Proven technology

• Process design meets ore characteristics • Energy efficiency, less emissions

Operations &

Maintenance

•O&M management and

execution

•Pricing of operations phase

driven by produced tons

• Plant safety

• Long term guarantee

• Less unexpected breakdowns • Decreased life-cycle cost

Remote

services

•Remote support and

continuous process monitoring

•Best competences and practices made available

in remote destinations

•Online visibility to production process enables

fast problem solving

Automation &

Plant systems

•Integrated production,

maintenance and plant automation systems

• Efficient plant management, reporting and

development

• Continuous improvement

Materials

management

•Spare and wear parts

delivery and inventory management

• Easy purchasing channel • Optimized site inventory level • Guaranteed availability of spares

Project

delivery

•Combined capex and

service deliveries

•Resourcing & training

• Smooth transition from project to operations • Strong Outotec commitment to fast start-up

Key drivers for owners to outsource

Talent

scarcity

Talent

scarcity

Talent – especially close to mining site –

scouting has become more difficult and

mine owners cannot find the required

capabilities

Description

Shift in

owner

mindset

Shift in

owner

mindset

Owners do not see, to a high degree,

operation as part of their core

responsibility

Need to

outsource

risks

Need to

outsource

risks

Owners are becoming more risk averse

and trying to leverage operators to

mitigate risks associated with operating

activities

Potential for

optimization

Potential for

optimization

Operators have more technical

expertise in operating plants and can

hence optimize the production

EXAMPLE

At the RCC Mikheevsky

plant, customer

requested to have long

term performance

guarantees (Capex +

O&M)

EXAMPLE

At Crystal Ilmenite

smelting plant, the

customer provides blue

collar workforce but

requires Outotec to build

a high performing

operations solution and

support operations

Case: RCC Mikheevsky Concentrator - O&M

Dec 4 CMD 2013 13

Contract signed in January 2013, EUR 140 million*), 6+ years

Value proposition

With Outotec’s maintenance strategy, unplanned downtime can be reduced at customer plant

E.g. by increasing plant throughput 2%, customer generates annually USD 5-8 million more revenue (depending on copper price)

Find balance between reagent consumption (cost) and recovery rate (quality)

E.g. by increasing copper recovery by 0.5%, customer

generates annually USD 3-5 million more revenue (depending on copper price)

Pricing of operations phase driven by produced tons

Scope of delivery

Operation and Maintenance, planning & execution incl. manpower

Remote process and equipment condition monitoring

Supply of spare and wear parts, reagents and grinding media Comprehensive, tailored training programs to guarantee smooth

and efficient plant ramp-up *) Not included in Outotec‘s Q3/2013 backlog

OUTOTEC’S SERVICE

OFFERING/O&M - VIDEO

CMD 2013

Growing to 1B€ by 2017

CMD 2013 15

Services sales target

EUR 1 billion by the end of 2017. Growth is planned to be achieved through organic growth, acquisitions, strengthening local presence and new life cycle service offerings.

Capturing the potential of all business areas’

installed base

Leveraging local presence and capabilities

Productization and bundling service offering

Full utilization of supply and delivery capabilities

Expanding operation and maintenance services

Inorganic growth by acquisitions

Growth enablers

CMD 2013 16

FLOTATION

• High recovery rate

• Optimized energy and chemical consumption

AUTOMATION PLATFORM

• Advanced process controls

• Remote monitoring • Automation equipment COMMINUTION Crushing, screening, grinding • Optimized energy consumption

• Optimal grinding media consumption

DEWATERING

Thickening, Clarifying, Tailings treatment

• Maximized water recovery

• Optimized chemical consumption

Filtration

• High separation efficiency

Quality, Environment, Health, Safety Process expertise Maximized plant productivity Optimized operating costs Dec 4

Outotec offers sustainable lifecycle solutions

for full concentrator plants