Innovative application of proven technology in energy, biomass and waste-to-energy solutions Capital Markets Day 2012 Dr. Peter Weber, President Energy, Light Metals & Environmental Solutions (ELE) November 30 - Hamburg, Germany
Life cycle offerings delivered globally through four business areas Market Operations Supply Business Infrastructure Strategy Technology Management Non-ferrous Solutions Ferrous Solutions Energy, Light Metals & Environmental Solutions Services Finance & Control Legal Affairs Human Capital Communications and Corporate Responsibility for the processing of copper, nickel, zinc, lead, gold, silver, platinum group metals, industrial minerals as well as valuable minor metals for the production of concentrates, industrial minerals, pellets, sinter, pig iron, direct reduced iron, ferroalloys, and titanium feedstock for oil shale, oil sands and biomass processing, light metals and sulfuric acid production, off-gas handling, and industrial water treatment providing life cycle services partners peers competitors Competitive landscape is fragmented Jacobs (Aker), Alcan, Alstom, Brochot, FLS, Foster Wheeler, GEA, MECS, Siemens, Solios, Stultz, Veolia Engineering: AMEC, Ausenco, Bechtel, Chalieco, Enfi, Fluor, Hatch, MCC, NERIN, NFC, SNC-Lavalin, SRK, Worley Parsons 2
Outotec covers the entire ore-to-metal value chain and offers innovative applications to other industries Portfolio of the world s leading technologies in ELE Industrial minerals/concentrates Natural resources (ores, minerals, energy, water) Minerals processing Grinding Flotation Filtration Physical separation Thickening and clarification Analyzers and process automation Chemicals Sulfuric acid production Water treatment Neutralization, effluent treatment, drinking water Metallurgical processing Smelting and refining Roasting (FB) and off-gas handling Calcination (CFB) Leaching and solution purification Solvent extraction Electrorefining and electrowinning Sintering and pelletizing Direct and smelting reduction Process control Energy Combustion and gasification, heat recovery, gas handling, bio energy, oil sand and oil shale processing Services Expert services, spare parts and maintenance, operation, modernization and expansion, life cycle service contracts Copper Nickel Zinc Cobalt Precious metals Aluminum Ferroalloys Pellets/sinter DRI/HBI/ Pig Iron Sulfuric acid Water Shale oil Char Energy 3
ELE sales on strong growth track, but profitability challenged by single events Energy, Light Metals and Environmental Solutions Sales, LTM Operating profit, %, LTM *) EUR million 400,0 350,0 300,0 250,0 200,0 150,0 100,0 50,0 0,0 *) from business operations excl. one time items and PPA Sales growth development EUR million 300 250 200 150 100 50 0 259 2009-4% 223 236 2010 2011 293 15,0 % 10,0 5,0 0,0 Q1-Q3/2012 Sales in Q1-Q3 2012 were up 77% compared to Q1-Q3 2011 Operating profit from business operations was down from EUR 20.6 million to EUR18.2 million due to higher costs and risk provisions in two customer projects Fewer project completions vs. comparison period 4
ELE s strategy is based on systems integration for life cycle solutions and portfolio expansion through technology Successfully address specific challenges of our customers through R&D competence and successful systems integration We build the right solutions for our customers raw materials flexibility sustainability environmental demands Increasing value through life cycle solutions The best return on a customer s investment Global integrated operations and local presence Applying core technologies in new attractive growth areas Leadership in technology and innovation Improving productivity and scalability Sustainable use of Earth s natural resources Portfolio expansion into new verticals applying core technologies and competences Main focus on: Energy Industrial Water 5
ELE applies core technologies and competences in attractive new growth areas ELE entered into: Energy: The market for the combustion of biomass, sludge and waste as well as into oil shale processing with our (circulating) fluidized bed expertise IWT: Industrial water treatment applying chemical processing know-how and proprietary equipment Business logic: Entering adjacent industries with high technological synergies and manageable risks Opportunities to provide innovative technological solutions in energy industry and industrial water treatment sector Outotec as a life cycle solution partner for the client s value chain Services Project delivery System integration Proprietary equipments Technology Current metals and minerals Chemical engineering and prop equipments Fluidized bed technology as key concept IWT Energy 6
Commercialization of new applications in 2010-2012 proven track record Energy Oil shale processing plant (ENEFIT 280) to Eesti Energia, Estonia, 136 M Oil shale pretreatment plant to Eesti Energia, Estonia, 25 M Sewage sludge incinerator plant to Zürich, Switzerland, 50 M Power plant to Eren, Turkey, 65 M Light metals Circocal (best efficiency calciner), AOS, Germany, 2 M Alumina refinery technology, Anrak Aluminium, India, 2 M Feasibility study on alumina refinery to Antam, Indonesia, 3 M Partial roasting to Codelco, Chile, 144 M Decomposing and calcining plant to produce high purity alumina Orbite Aluminae, Canada, 9 M Carbon plants/aluminum technologies New rod shop to EMAL, Saudi Arabia, 42 M Industrial water treatment Effluent treatment plant to Codelco, Chile, 18 M Acid & gas cleaning World largest metallurgical sulfuric acid plant to Kansanshi Mining, Zambia, 80 M HEROS demonstration plant to Kelheim, Germany, 1 M HEROS plant to Korea Zinc, Korea, 3,6 M 7
Energy portfolio expansion roadmap is based on the versatility of Outotec s (circulating) fluidized bed technology Sludge Power Production Biomass Process Heat Rejects Fertilizer Coal Environment Oil Winning (Narva AshDec Acquisition Contract 2009-2012) (2011) EPI Acquisition(2011) Synergistic wins EREN, ERZ (2012) CFB Coal combustion (2012-2014) CFB biomass gasification (2014) 8
Energy core technologies are fluidized bed based and divided into two product groups Products Process Application Core ELE technology Latest successes Oil Winning Pyrolysis Oil from oil shale/oil sand; plastic recycling (oil and monomers) Rotary Kiln + Circulating Fluidized Bed Narva Oil shale plant start-up Biomass/ Thermal Processing Combustion Combustion Gasification Biomass, municipal sludge & waste, industrial by-products Coal, oil shale, spent shale, industrial by-products Coal, wood, tree bark and other biomass Fluidized Bed Circulating Fluidized Bed Circulating Fluidized Bed EREN contract ERZ contract US contract (OEP) Study and BE contracts Indonesia, CIS Future expansion 9
Oil winning solutions are based on Enefit Outotec Technology (EOT) Enefit EOT JV established in 2009 40% OT (technology leader in fluidized bed application) 60% Eesti Energia (leading production company in oil shale processing) Value creation for Outotec Through JV (license and services) Through core CFB minimum technology package (MTP) delivery for Enefit technology 40% Outotec Technology Partner Fluidised bed MTP Project implementation EOT JV Marketing/Sales Test work Basic Process design 60% Eesti Energia Operational excellence Pyrolysis MTP Enefit development path strengthens technological competence for (oil shale) pyrolysis. Bench-scale (10 kg/h oil shale) built and in operation since 2011 Pilot plant (350 kg/h oil shale) in construction; commissioning by November 2012 First commercial plant under commissioning 2012 10
Find a solution for the expansion of EE s oil winning plant in Estonia adapting an old technology to today s requirements CUSTOMER-SPECIFIC CHALLENGES CASE 1 11
Case 1: Oil winning - Enefit280 combines old pyrolysis knowhow with new CFB technology Find a solution for the expansion of EE Narva s oil winning plant adapting an old technology to today s requirements regarding Throughput Efficiency Emissions By-products and effluents High capacity Oil 1.8 mio bbl/a Gas 9700 Nm³/h 28MW el Meets strict EU environmental requirements CO 2 ~ 0.2 0,3. t/t oil shale SO 2 <50 mg/nm 3 Solid particles <30 mg/nm 3 NO x <300 mg/nm 3 TOC in ash ~0 High efficiency Complete combustion of semicoke in CFB Use of off-gas heat for power production Use of ash heat for steam/power production Use of off-gas heat for drying of oil shale Energy efficiency 87% 150 l shale oil / t dry oil shale High availability > 90% 12
Biomass/Thermal Processing: Key success factor EPI is now Outotec forming a winning equation In December 2011 Outotec strengthened its energy and environmental technologies portfolio by acquiring all interests in Energy Products of Idaho Limited Partnership (EPI) in Coeur d'alene, Idaho (US) EPI is a pioneer in biomass and difficult waste material combustion and has delivered over 100 renewable energy solutions utilizing fluidized bed technology worldwide. a global leader in sustainable minerals and metals processing solutions and an innovative provider of sustainable energy and industrial water treatment solutions a global supplier of renewable energy and waste-to-energy solutions a perfect match to become a strong global player in sustainable energy solutions 13
Biomass/Thermal Processing: EPI technology offers great fuel variety proven in numerous references Pioneered and patented circulating fluidized bed technology in the US First fluidized bed utilizing biomass fuel in 1973 First biomass fluidized bed utilizing SNCR in 1985 Twice awarded Power magazine s Power plant of the year Over 250 varieties of fuel utilized 14
Biomass/Thermal Processing: Newest reference contract Staged gasification/ combustion for cellulosic bio ethanol Recent contract signed: Staged gasification/combustion for difficult to incinerate residues and by-products from cellulosic bio ethanol production for US customer. Technology and proprietary equipment for boiler island based on OEP proprietary bubbling fluidized bed know-how. Integral part of the client s cellulosic bio ethanol production providing thermal energy in form of steam (80t/h high pressure) Contract value EUR 14 million 15
Biomass/Thermal Processing: Strong market potential for EPI technology in Brazil, UK and SEAP Source: Pöyry Management Consulting 16 2012 CMD
Find a solution for a combined heat and power plant for a paper production facility using all in-plant paper sludges as fuel CUSTOMER-SPECIFIC CHALLENGES CASE 2 17
Case 2: Biomass & Thermal Processing EREN Corlu Implementing fluidized and circulating fluidized bed technologies for special wastes and residues CHP plant Paper sludge and rejects to energy Fuel: 450,000 mtpa residues; 38,000Nm³/d biogas Highest feed material flexibility Steam flow: 96t/h @ 430 / 62 bar(a) 90MWth, up to 30 MWel All emissions meet strictest standards acc. 2000/76/ECC Total value approx EUR 55 million + EUR10 million B.E. As per authorities: first real biomass plant in Turkey First synergetic win based on both the newly acquired OEP know-how and established ELE technology and project execution competence 18
Find a solution for sewage sludge incineration with the possiblity to recover nutrients CUSTOMER-SPECIFIC CHALLENGES CASE 3 19
Case 3: Biomass & Thermal Processing Sewage sludge incineration ERZ Zurich Provide a solution for usage of sewage sludge as landfill was abandoned by the Swiss confederation. Optionally recover the nutrients from the sludge. Sewage sludge incineration Fuel: 100,000 mtpa sludge; 30,000 mtpa dry substance Steam flow: 9 t/h at 450 /61 bar(a) Up to 0.9 MWel Prepared to accommodate Outotec s AshDec process to allow the recovery nutrients from ash Win based on: OEP references Established ELE technology and project execution competence Technological leadership in nutrient recovery Outotec s AshDec technology 20
Biomass & Thermal Processing: Outotec s sewage sludge incineration offers unique features Reliable, safe and environmentally friendly solution Mono-incineration plants burning sludge are self-sustaining No additional fuel needed, large savings in contrast to drying Declining acceptance to use sludge as a fertilizer due to impurities such as heavy metals, hormones, etc Food chains will not buy products fertilized with sludge Landfill of organic waste forbidden in the European Union The remaining ash can be used as additive for building roads and in the cement industry or for the recovery of nutrients in the AshDec process 21
AshDec technology as a means to recover phosphates which are otherwise lost once entering the food chain Vagstad, 2008 Today s industrialized, one-way phosphorus flow is critical because of the concentrated supply situation. In industrialized countries >50% of phosphorus from human excretions is lost in construction material & landfills! 22
AshDec process solution for energy and nutrient recovery complementing sludge incineration Combustion of sludge and manure yields energy and leaves nutrient concentrates facilitating their transport to the areas where they are needed Energy Additives Sewage Sludge Manure Organic Pollutants Heavy Metals Energy generation from sewage sludge and manure P-rich Ash Heavy Metals P- (N+K) recovery Renewable Phosphate Fertilizer Pollutant free Organic pollutants (destroyed) Purified off-gas Heavy metals Outotec s AshDec process can solve the nutrient/energy dilemma and provide a safe, pollutant-free fertilizer! 23 2012 CMD
Find a solution to operate a large copper smelter in the vicinity of the city center complying with the highest emission standards CUSTOMER-SPECIFIC CHALLENGES CASE 4 24
Case 4: Off-gas solutions for copper smelter Challenge: Expansion of large copper smelter only 5km from the city of Hamburg and comply to all German environmental standards without exception The solution: Gas cleaning with acid plant Smelter offgas To Acid Plant Hot ESP Dust (Product recycled to primary process) Quench Tower Hydro cyclone Wet ESP Removal of Impurities Arsenic, heavy metals & weak acid Hg-Tower & Se- Filter Boliden Norsink Process To Effluent Treatment Plant Removal of Mercury Additional removal in Se-Filter 25
With Outotec s technology expertise and Aurubis operational excellence the lowest emission levels are achieved The Hamburg smelter is one of the world s cleanest primary copper smelters SO 2 emissions Avg all plants = 125 kg SO 2 /t Cu Avg Europ. plants = 43 kg SO 2 /t Cu Aurubis Hamburg = 4 kg SO 2 /t Cu Outotec as one-stop-shop for metallurgical off-gas cleaning Dedusting Scrubbing SO 2 capture to produce sulphuric acid Effluent treatment plant. Inhouse smelting expertise to understand the emission source characteristics 26
ELE has been delivering its growth strategy based on the expansion in new verticals, maintaining its strength in traditional business We have built and will build the right solutions for our customer s raw materials;... flexibility;... sustainibility; environmental demands 2010-2012 we planned... Key theme: Reinforcement of technology portfolio with acquisitions, augmentation of key resources, seeding of future growth drivers Focused, synergetic acquisitions in Energy and IWT Acquire competences and technologies in existing value chains through bolt-on acquisitions/alliances eg HEROS, biomass/sludge incineration On time implementation of Eesti project for further development into Oil shale/sands We delivered... Completion of EPI acquisition with global roll-out ongoing First wins in IWT Increased competences in both traditional and new fields (Alumina Refinery, HEROS, Sludge incineration) Mechanical completion of Eesti Pilot plant Continued technological leadership (e.g. Alumina) 2013-2015 we will focus on... Hot commissioning completion of Narva Oil shale reference plant Global roll-out of energy solutions based on solid demand for alternative energy solutions, however timing impacted by unpredictability of governmental regulations Focus on winning deals in industrial water treatment solutions through own R&D and acquisitions Tightening environmental regulations driving demand of sulfuric acid and gas cleaning technologies 27 2012 CMD
Our mission: Sustainable use of Earth's natural resources. 28