EXPLOSIVES AND BLASTING_proof 18/07/2016 14:24 Page 2
EXPLOSIVES AND BLASTING
In Europe emulsion explosives use of Orica’s
total AN and emulsion sales is 91%
result of lower market demand. Chile volumes
were also negatively impacted by a contract loss
from the second h alf of 2015. Partially offsetting
these impacts were improved volumes to copper
and gold customers in Peru as well as customer
wins in Brazil. From an AN product mix
perspective, the volume reduction was stable
across the product range with emulsion
products holding at ~60% of total AN. Sales of
Initiating Systems, particularly EBS products
were higher, notably in Peru, Argentina and with
the ramp up of a new contract in Colombia.
Revenue from advanced products and
services as a percentage of total explosives
revenue declined to 27% from 28% while pricing
across explosives and cyanide was down due to
the flow through of contract renegotiations
completed in the second half of 2015.
Finally in the Europe, Africa and Asia region
(268,000 t AN and emulsion of which emulsion
91%), sales revenue increased 4% due to a
combination of higher demand in Africa from
new business as well as higher EBS sales across
all three sub-regions, in particular increased
penetration into the tunnelling market in South
East Asia. Europe’s revenue was flat but with
improved sales in Turkey and the CIS offset by
lower demand in the Nordics and UK as a result
of mine closures.
By mining commodity, the composition of
revenue across the region is weighted towards
quarrying markets (33%) in Europe and Asia,
gold (21%) in Africa and Asia, copper (14%) in
Africa and Europe and other commodities (19%)
56 International Mining | AUGUST 2016
including zinc and nickel in Europe and Asia.
Explosives volumes were broadly in line with the
previous period. Revenue from advanced
products and services as a percentage of total
explosives revenue increased to 22% from 17%.
Overall pricing across the region was generally
flat.
Orica CEO Alberto Calderon addressed
industry leaders at the West Australian Mining
Club June luncheon recently as follows: “We
believe our differentiation strategy will allow us
to outperform the market. Additionally, our
focus on customer centricity will improve the
penetration of our differentiated products and
services…we have taken decisive action at Orica
and despite the market volatility we continued
to control those elements that we can. Our
transformation program has exceeded our
forecast, and – more importantly – 80% of the
benefits delivered are repeatable, long term
benefits. In the half year ended March 2016, we
delivered net benefits of A$52 million. Our
forecast is to deliver benefits of between A$70
and 80 million by the end of this financial year.
Given the persistent oversupply of ammonium
nitrate in Australia, we rationalised our supply,
with curtailed production out of our Yarwun
operation in Gladstone helping to balance the
Australian East Coast supply. We have continued
to strengthen our contract profile, locking in
volumes through the down cycle for better
certainty. We have also turned our attention to
defining our long-term, optimal initiation
systems supply network. Orica has a highly
geographically dispersed Initiation Systems
manufacturing footprint, which we need to
leverage more effectively for the benefit of our
customers and Orica, while not compromising
on the elements that are most important to our
customers - safety, reliability and quality.
To ensure we deliver against these factors we
have embarked on a project that will utilise our
highly automated plants, like those in Gyttorp
(Sweden) and Brownsburg (Canada), to produce
a high quality product, consistently and
efficiently.”
He added that keeping in mind the supply
reliability requirements of its customers Orica is
also standardising its products where possible,
and obtaining the required certifications to
supply in all jurisdictions that its customers
operate in from all the manufacturing locations
in its global network. “This delivers a number of
benefits to our customers. They are assured of a
consistently high quality product, regardless of
where it is manufactured. As the products
become more standard, they also benefit from
even better security of supply as we will be able
to ship our products from any number of
manufacturing plants, all over the world, to
meet their needs.”
On supporting this global approach he stated:
“Supporting this will be a single, standard SAP
system that drives common processes and data.
This will deliver the required visibility of
performance across our landscape…when you
consider our global footprint, this visibility of
performance translates into an invaluable
source of intelligence for us. We have people in
more locations than anyone else – some 450
mine sites across every type of market and
operation, from developing economies through
to highly mature, sophisticated markets and
operations. We undertake around 1,500 blasts
around the world, every day. This means we
have an expansive ‘big data’ collection and
knowledge base that can be fully leveraged to
link customers’ sites and regions and enable the
very best in knowledge transfer. We see this as a
key differentiator for us and continue to
leverage it further by investing around three
times more than our competitors in R&D. We
consider this investment necessary and can
demonstrate how this leads to improved
productivity for our customers through
advanced blasting services, data recording,
management and analysis for optimal
productive blasting results. This translates into
real value for our customers. For example, by
improving fragmentation in gold operations we
have helped our customers reduce their power
consumption and therefore their unit costs.”
Dyno success with differentional energy
Global explosives player Dyno Nobel has
announced successful results of a trial taking
place at a surface molybdenum mine in the US.
The mine agreed to an initial three month trial