Metals Processing Business Division

Managing of large turnkey projects and optimizing the output: overview and case examples More out of ore!

MetPro Typical MetPro Projects

Type of MetPro Projects
EPC / Turnkey ( 15-200 million, 15-36 months)

Basic and detail engineering, full supply, erection, training of customers personnel and commissioning of the plant, performance and other guarantees for OTs supply scope

Technology Package ( 3-70 mio, 10-36 months)

Basic and detail engineering, supply of typically proprietary and/or key hardware components, erection supervision, training of customers personnel and commissioning of the plant, performance guarantee for OTs supply scope Equipment Deliveries (up to 10 million)

Delivery of proprietary technology is an essential part in all project types

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LSTK Projects

Trends require LSTK Approach Industry Trends

What means LSTK / EPC to the Client: An obligation to deliver a plant:

Demands on OT
Availability of resource and competencies beyond technical core skills:
Project management skills Risk management skills Supervisory skills for eng. + construction Extensive local/global procurement knowl. Strong local knowledge of: Taxes and duties local execution partners Outstanding competencies and personnel

Complete and ready for operation For a fixed lump sum price Within a set time frame and Maintaining project targets With given completion guarantees With minimum interfaces With quality and safety commitments

Reduction of clients risk by transfer

of tasks and challenges to a professional organisation
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based on clear execution processes with internal rules and regulations to handle complex LS projects with local challenges

LSTK Projects -

Summary of Execution Procedure

Contract

Project implementation

Engineering

Procurement

Off-Site Fabrication

Expeding + Inspection

Projektmanagement / Projektcontrolling Business Management / Divisionscontrolling

...

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Transport + Shipment

Subcontracting of Site Work

Construction

Commissioning, Start-up, Performance Tests

Project Finalisation

Projektmanagement / Projektcontrolling Business Management / Divisionscontrolling

Process oriented Project Execution

LSTK Projects -

(1) Business Dynamics

Order Intake

Order Backlog

Sales

Profits

Increased market activity increases order intake and order backlog Sales impact is spread over a longer period due to large project sizes and project tenors up to three years A significant part of profits is generated only when the project is completed and the provisions related to the project are released

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LSTK Projects -

(2) Profit Recognition EPC/LS Turnkey Example

100%

80%

Project Profit

60%

Releasing of provisions

40%

20%

0%
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

Month

Timing of large project completions affects quarterly earnings

NOTE: The figures are illustrative and vary project by project

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LSTK-Project

Key Elements of Project Execution Procedure

Project Management Execution Concept Project Organisation Project Control

Kick-Off Meeting

Main Work Packages

Engineering

Design Reviews and Approvals

Procurement

Fabrication Expediting Transport

Construction Commissioning, Start-up and Performance Tests

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LSTK Projects - Project Management

Project Execution Concept
Clients Representatives Task Force Germany
Technical Input Documentation Reports Progress Main Contract Response Payments Technical Reviews Approvals Invoices

Basis for the Project: Who does what and where!!!

Clients Project Office Task Force Chile
Documentation Site Facilities Infrastructure Contractual Scheduling / Temporary Inspection Progress Reporting Issues Audits

Clients Construction Site Antofagasta, Chile

QA / QC Tests Construction Approvals Schedules Reporting Progress Reporting Progress Progress Invoices

Outokumpu Technology Task Force Office Offshore Oberursel Germany Subcontractor(s) Engineering Project Management Scheduling, Controls Progress, Reporting Contract Administration General Administration

Subcontract Invoices Payments Delegation of Key Personal

Outokumpu Technology Task Force Office - Onshore Santiago, Chile Project Management Scheduling, Controls Progress, Reporting Contract Administration General Administration Civil Engineering Structural Engineering Piping Engineering Electric and Instrumentation Engineering Construction Engineering

Delegation of Site Personnel Documentation Reporting General Support Queries

Outokumpu Technology Constructors Site Antofagasta, Chile Construction Management Construction Supervision Quality Control HSE (Health, Safety, Environment) Construction Scheduling Controls and Reporting Engineering As-Built Drawings Training Commissioning

Process Engineering Plant Engineering Equipment Engineering Piping Engineering Civil and Structural Engineering Electric and Instrumentation Engineering Construction Engineering Purchasing Expediting and Inspection Forwarding
Documentation Payments Approvals Documentation Basic

Detailed engineering Reporting Approvals / Legal Control Queries

Engineering

Technical Documentation

Subcontractors

Purchasing Expediting and Inspection Forwarding

Documentation Construction

Site Administration Industrial Relations

Documentation

QA / QC Tests

Equipment Supplies - Offshore Workshop Drawings Manufacturing QA/QC Packing and Transport Installation and Maintenance Manuals

Equipment Supplies - Onshore Workshop Drawings Manufacturing QA/QC Packing and Transport Installation and Maintenance Manuals

Orders Invoices Payments

Construction Subcontractors - Onshore Civil Work Erection Work Warehousing Cold Test Runs Commissioning Support

Delivery of Equipment and Materials Vendors Representatives

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Resource Reporting

Documentation

Construction

Schedules Approvals

Payments

Approvals

Invoices

Orders

Basic

Work Plans

Detailed

Detailed

Invoices

Orders

LSTK Projects - Project Management

Project Organisation

Project Manager Commercial Manager QA/QC Manager Engineering Manager Process Engineer Procurement Manager Controls Manager Construction Manager Commissioning Manager
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LSTK Projects - Project Control

Key Elements of Project Control

Time Schedule and Control

Planning of activities in a network diagram Generating of activity arrow diagrams acc. to critical path method

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LSTK Projects - Project Control

Key Elements of Project Control

Progress Planning and Control

Allocation of work units to activities Control of actual monthly progress

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LSTK Projects - Project Control

Key Elements of Project Control

Development of Project / Actual Status Current Items of Concern / Deviations to Plan Corrective Measures / Actions Consequences Progress and Milestones Change and Claim Management Financial Status Cost and Profitability Status Bank Guarantees / Payment Securities

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LSTK Projects - Project Control

Key Elements of Project Control
Continuous Risk Monitoring

Early risk assessment already in the proposal stage (Prima and FRP risk tools) Continuous risk monitoring throughout the execution with continuous reporting

To the project steering committee as part of monthly project report To the OT Excom as part of the monthly report using a Traffic Light Signal
Additional quarterly steering meetings on top level with the client to allow early warning of red flags and development of respective action plan
Project Contract Value
(rough Euro mio figures)

Technological Risks

Contract Commercial

Project Implementation

Finance

Backlog Value Project A, Pelletizing Plant Project B, Sulphuric Acid Project C, Pelletizing Plant 147 106 56 18 71 19

Country

Customer

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LSTK Projects Main Work Packages Engineering

Main Disciplines

Process Engineering Plant Engineering Mechanical Engineering Piping Engineering Electrical Engineering Instrumentation Engineering Civil and Structural Engineering Construction Engineering

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LSTK Projects Main Work Packages Procurement

Main Tasks

Purchasing of all Equipment and Materials Off-Site Fabrication by Subsuppliers Quality Assurance through

Expediting Inspection

Transportation / Shipment to Site Subcontracting of Site Work

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LSTK Projects Main Work Packages

Construction Main Tasks

Planning of Site Activities Constructability Analysis Scheduling (Bar Chart / Network Diagram) Planning of Progress and Manpower Planning of temporary Site Facilities Structure Site Organisation Selection of suitable Subcontractors Execution of Construction by Subcontractor(s) Construction Management and Supervision

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LSTK Projects Main Work Packages

Commissioning Main Tasks Cold Commissioning No Load Tests Cold Load Tests Hot Commissioning Hot Load Tests Feed-in of Raw Materials First Start-up of Production Optimising of Production Parameters Execution of Performance Test Runs

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LSTK-Project Example Project Execution

Main Work Packages Engineering Design Reviews and Approvals Procurement Fabrication Expediting Transport Construction Commissioning, Start-up and Performance Tests

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LSTK Projects Engineering

Data based plant engineering interfaces

FEM stress analysis. Design regulations Equipment Guide Drawings Company Standards Parametric Equipment Design

Process Data with PFD and Equipment List

Valve List P&I Diagram Instrument List Piping List Steel - Structure. Ducts Piping 3 D - model Arrangement Plan Link to Documents FEM stress analysis. Cable routing MSR location plan

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LSTK Projects Engineering

Acid Plant Block Diagram
BFW Sulphur Sulphur Furnace + Waste Dry Air Heat Boilers Drying Tower Final Absorber SO3 Converter Bed 4 SO2 Steam Product Acid
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Steam Converter Bed 1-3 + Heatexchang.

SO2

SO3+ SO2

Diluted Acid

Interm. Absorber H2O

Ambient Air

Tail Gas

LSTK Projects - New Technologies

Sulphur Burning Plant Simplified Flowsheet
main blower atmosphere

HP STEAM GENERATION
air

LOW TEMPERATURE HEAT RECOVERY

sulphur

combustion furnace

waste heat boiler

product acid stack drying tower

superheater evaporator CMD 2007 | 21 economizer converter

intermediate heat exchanger

intermediate absorption tower

final absorption tower

LSTK Projects- Engineering

3D-CAD Plant Design - Interfaces

Eng. Disciplines Equipment (incl. Ducts) Piping Structural Civil Instrumentation Electrical
Plastic Model Substitute Collision Check MTOs

Central 3D Model
P&ID Data DIN/ANSI Catalogues

Technical Documents Arrangement Dwgs. Piping Drawings Isometrics Struct. & Civil Dwgs. E-Consumer Dwgs. Cable Routing Plans Instr. Location Plans FEM Calculation

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LSTK Projects Engineering

3D-CAD Design
Piping +Heat Exchangers + Steel Structures For model-supported systems, components are joined together similar to a construction set. The components originate from libraries where the dimensions are derived from standards and specifications. (piping and beam sections, etc.) = Acid Cooling

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LSTK Projects Engineering

Site Plan & Crane Location

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LSTK Projects Construction

Site Located Tower Cranes

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LSTK Projects Construction

Construction Study Acid Plant 4,800 t/d

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LSTK Projects Construction

Phase 1 Converter + Stair Tower

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LSTK ProjectsConstruction, SO2 ConverterCore and Shell

390 to

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LSTK ProjectsConstruction, Heat Exchanger

65 ... 350 to

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LSTK ProjectsConstruction
Phase 3 - Vessels

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LSTK ProjectsConstruction, Phase 4 Towers + Hx

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LSTK ProjectsConstruction
Phase 4 Towers + Hx

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LSTK ProjectsConstruction, Phase 4 Towers + Hx

95 to each

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LSTK ProjectsConstruction
Phase 5 Sulfur Area

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LSTK ProjectsConstruction, Phase 5 Sulfur Area

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LSTK ProjectsConstruction
Phase 6 Waste Heat Boiler

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LSTK ProjectsConstruction, Phase 6 Waste Heat Boiler

260 to

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LSTK ProjectsConstruction
Phase 7 Structural + Machinery

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LSTK ProjectsConstruction, Phase 7 Machinery

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LSTK ProjectsConstruction Phase 8 - Ducting

600 to ducts

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LSTK ProjectsConstruction, HP-Steam Generation

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LSTK ProjectsConstruction Phase 9 Stack + Piping

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LSTK ProjectsConstruction, Phase 9 Acid Cooler

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LSTK ProjectsConstruction Phase 10 Insulation + EI&C

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LSTK ProjectsConstruction Phase 11 - Complete

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MetPro Typical MetPro Projects

Key Projects 2007
Samarco Customer:
Project site: Delivery:

LKAB
Customer: Project site: Delivery: LKAB Sweden Turnkey/EPC (Pelletizing plant)

Samarco Mineracao (CVRD 50%, BHP 50%)

Brazil Turnkey/EPC (Pelletizing plant)

Project value: 160 million Outokumpu Technologys Role: Outokumpu Technology delivers the plants core technology (proprietary technology), including test work, engineering, supply of equipment, construction/erection, commissioning Duration: 29 months (8/05 - 1/08)

Project value: 60 million Outokumpu Technologys Role: OT delivers the plants core technology (proprietary technology), including test work, engineering, supply and erection of core equipment, supervision of construction/erection, commissioning Duration: 24 months (11/04 - 10/06)

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MetPro Typical Projects Key Projects 2007 (contd)

Alcan Gove
Customer: Project site: Delivery: Alcan Gove Australia Technology Package (Alumina Calciners) Customer: Project site: Delivery:

Codelco
Codelco (Corporacin Nacional del Cobre) Chile Technology package/EPC (Sulphuric Acid Plant)

Project value: 26 million Outokumpu Technologys Role: Outokumpu Technology delivers proprietary Circulating Fluidized Bed technology, including engineering, supply of key equipment, supervision, commissioning Duration: 24 months (2/05 - 2/07)

Project value: 16 million Outokumpu Technologys Role: Outokumpu Technology delivers proprietary technology, including engineering, supply of equipment, erection/construction, commissioning Duration: 28 months (11/04 - 3/07)

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More out of ore!

www.outokumputechnology.com

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