1. Sophisticated Simplicity Heavy Haul Operations Supported by Proven Technology Mike Darby Karribrook WA Pty Ltd

2. Presentation Overview  What is “Sophisticated Simplicity”?  BHP Billiton’s Railway NW Australia  BHPB’s use of technology  Example of Sophisticated Simplicity in a Heavy Haul Railway Operations supported by proven technology 5/24/2015 2

3. What is Sophisticated Simplicity? Traditional Approach Simple System Proven Technologies

4. BHP Billiton Ltd  Is the worlds largest diversified resources company (>US$100 billion)  Global resource development company  BHP Billiton Iron Ore located in Northern Australia: Developed a “ Fit for Purpose ” Railway Operates in a harsh and isolated environment Operates the heaviest axle loads/trains in the world

5. Operations in ‘Cyclone Alley’

6. BHP Billiton Iron Ore Railway

7. History of the BHP Billiton Railway  Mt Whaleback was the largest single iron ore deposit in the world (>1 billion tonnes)  Historically Iron Ore deposits in Western Australia seen as too far (400 km) from tidewater prior to heavy haul railways  Heavy haul rail line built in 1969 by North American contractor  In 1970 Oroville Dam Project cars and dumpers brought from California to Australia / evolved as a North American Railroad  Regulated by Mines Department not DOT

8. BHP Billiton Iron Ore Railway  Good Safety Is Good Business  Continuous Improvement  Use Assets to Their Full Potential  Research and Development Operating Philosophies:

9.  High axle load issues  Hot bearing-Hot/Cold Wheel Detectors  Wheel Impact Monitor  “Weigh-in-Motion” Weighbridges  Acoustic Bearing Detection  Instrumented ore cars  Auto Locomotive Downloads  Video Imaging  Workshop Initiatives Proven Technologies

10. Axle Load Evolution 19701974198619962005 28.5 tonnes 30.0 tonnes 32.5 tonnes 35.0 tonnes 40 tonnes Wet tonnes per wagon Axle Loading

11. Issues with 40 tonne Axle Load “Thermit” Welds/Flash Butt Welds - 6000 “Thermit” welds – 2% failure/annum - 35000 flash butt welds -.008% failure/annum - Program in place to replace “thermit” welds Rail Grinding Program Wheel/Rail Interface Weekly Rail Ultra Sonic Inspection

12. Thermit/Flash Butt Welds

13. Stress Free Temperature (SFT)  Incorrect SFT leads to: Track buckles – when hot Rail Breaks – when cold  1,000 meters rail @ 60°C is 999.386meters @ 5°C  25°C change causes 92 tonnes of tensile force  “Thermit” welds Sensitive to SFT & lateral loading  Concrete SFT 33 - 38°C  Timber & Steel SFT 35 - 40°

14. Painting Welds Reduce lateral loading

15. Hot/Cold Wheel/Bearing Detection  18 hot bearing wheel detectors  1 cold wheel detector  Automated and site activated

16. Impact Detection & Weigh-In Motion  1 impact load detector  4 weigh-in motion scales

17. Acoustic Bearing Detection Following faults are detected:  Cone Faults  Roller Faults  Audible Wheel Flats  Cup Faults  Looseness / fretting  Noisy Wheel sets (flanging)

18. Consequence of System Breakdown

19. Result of System Breakdown

20.  4 IOC ’ s in service  Vertical suspension travel (ride quality)  Wheel-rail acceleration (rail condition)  In-train forces  Lateral stability (hunting)  Longitudinal acceleration  Car body/draft gear pocket strains  Temperature  Brake pipe pressure Instrumented Ore Cars (IOC)

21. Auto Locomotive Downloads The “Black-Box” is downloaded at each arrival at port  Driver education/incident management  Fuel utilization  Data for automated train operation  All operating parameters

22. Video Imaging Measures:  Flange Height  Flange Width  Vertical Flange  Hollowing Depth  Rim Thickness  Wheel Diameter

23. Workshop Initiatives  Component Tracking  Ultra-Sonic Wheel Testing  Super Clean Wheel Specs  Bearing Quality Assurance  “H” Class Bearings  40 tonne trucks  Side Wall Thickness Tracking  Asset Protection Information Integration

24. Ultrasonic Wheel Inspection

25. Shop Facilities

26. 37 Traceable Components for each Ore Cars Component Tracking

27. Coupler Inspection  Developed in UK, for in- situe inspection  Uses ultrasonic probe inserted through the drain hole  Detect lower pulling lug cracks which are the primary mode of failure for fixed & rotary couplers

28. BHP Iron Ore Railroad Ore Car Wheel Life 1980 2006 million km million km Life extension 0.34 1.95 6.5 fold increase Rail Life (Tangent Track) 1980 2006 million gross metric tonnes metric tonnes Life extension 350 1,200 3.4 fold increase R&D into the rail/wheel interface allows for the useful life of assets to be extended Productivity Results

29. Employee Productivity Tripled in the last 10 years (‘000’s tonnes per employee /yr)

31. Heavy Haul Railways of the Future  KIS: Keep it simple Train operation designed with minimum interfaces  Implicit safe operation Design the operation to avoid train movements  Intense capital utilization Use assets to the fullest  Integrated knowledge process implementation Proven technology to protect assets

32. The Knowledge Process Integrated data collection information implementation knowledge System management

33. What’s in the Future ?  Continued safety focus  Human resource efficiency  Higher axle loads  Evolution of “ Cruise Control ”  Automated trains  Electric brakes

34. Electric Brakes  Handbrakes on grades can be managed  Ease of train handling all brakes on and off simultaneously within 7 seconds graduated release Faster brake charging time  Reduced in train coupler forces and less brake shoe wear  Distributed power (no radio based locotrol)  End of train monitoring  Brake system charges while brakes are applied  Load / empty features not required

35. Advantages cont.  Faster train cycle time Faster accelerations brakes release sooner May be able to increase speed of loaded trains Graduated release of train brakes  Individual wagon brake status monitoring  Fault finding i.e. train break location  Faster train brake charging times (uses less air)  Fuel savings as brakes release faster  Increased wheel life No sticking brakes / hot wheels  Even wearing brake shoes

36. “Highway” for future Developments  Derailment detection  Hot bearing / hot wheel detection  Hand brake status  “GPS” train braking (individual brakes graduated as loads traverse undulation)  Car weights linked to load out facilities (ensures each car is loaded to maximum)  Automated trains platform

37. Objective “Move 6 million tonnes of product per annum a distance of 100 km”

38. Simple ApproachTraditional Approach  250 cars/wagons  7 locomotives  Rotary/Bottom dump wagons  Rotary or bottom dump station  80 employees  Extensive track/yard system  Cost for plant >US$100 million  High maintenance costs  80 cars/wagons  3 locomotives (Push/Pull)  Side dump cars/wagons  Flat unloading platform  35 employees  Simple track/yard system  Cost for plant <US$30 million  Less plant to maintain  Supported by proven technology

39. The End Result