1. Phelps Dodge Mining Company Mine Technology Group May 15, 2006 1 Challenges in moving from ad-hoc to planned mine technology innovation

2. May 15, 2006 2 Why Innovate in Mining? Obvious, right? Increase productivity and profitability Improve safety and ergonomics Improve our environmental record and eliminate liabilities Implement process control methodology Introduce information systems technology to gain control Low hanging fruit Reference Heather Ednie, Innovation CIM Magazine Feb. 2006 Peck & Skinner, Getting better bang for your buck with technology

3. May 15, 2006 3 Issues Most new mine technology today has been dependant on OEM/OTM innovation Super Haul trucks (CAT 797, Liebherr T282B, Komatsu 930/960E) GPS Technology (CAT CAES, Aquila Drill Manager, etc) Fleet Management Systems (CAT MineStar, Modular Intellimine) New Technology usually evaluated by the chief engineer at an individual mine, in his spare time Acceptance usually hindered by “fear of change”. Implementation usually hindered by: Lack of funding Management support Operational constraints Availability of manpower (local site champions) Integration with legacy systems Not invented here

4. May 15, 2006 4 PDMC Mine Technology Formally established in 2003 General charter: Improving mine safety Protecting the environment Increasing productivity and efficiency Enhancing machine availability Reduce operating costs and capitalization Key Focus Areas Smart machine technology Smart systems Automation and autonomous mining systems Bulk material handling

5. May 15, 2006 5 PDMC Mine Technology Technology development through five steps: Technology identification & business justification Lab testing through third party participants CRC Mining, Universities, entrepreneurial companies Field testing utilizing any of ten active mine sites Technology distributed across most sites PDMC mine implementation – Budget inclusion Commercialization where appropriate IP evaluation and protection throughout process MTG includes: Seven full-time project managers / SME’s Management of over 30 active technology projects Benchmarking technology and methods

6. May 15, 2006 6 PDMC Mine Technology Typical projects include: Safety: Equipment mount/dismount technology Driver fatigue monitoring Proximity Warning 3-Point operator seats Advanced operator simulation training Radar-Lidar slope and ore pass monitoring/warning system development Jolt-jar driver evaluation Environmental: Blast vibration monitoring and control. Dust suppression. Operator ergonomics. Used oil in ANFO.

7. May 15, 2006 7 PDMC Mine Technology – Projects Continued Other: Pit slope optimization. Advanced controlled blasting. CAES for precision ore control. Mine management system evaluation. Drilling: Drill - autonomy Water-jet assisted drilling Blasting: E-det utilization SPLIT fragmentation monitoring Optimal blast design Loading: Shovel payload system Shovel operator feedback system Optimal shovel control Adaptor sensing and control

8. May 15, 2006 8 PDMC Mine Technology Haulage Large scale truck evaluation Cat 797B vs. KAC 930E Autonomous haulage systems Mass material transport New engine technology – Cat HD (LNG interest) Tire sensing, monitoring and management Ultra-light bed testing Oil contamination control – component optimization Navigation control / peer-to-peer wireless data management

9. May 15, 2006 9 Biggest Challenges and Industry Needs Integration of technologies Operating systems Proprietary hardware/software Operator interfaces (displays) Communication systems Connectivity and Technology Standards Vision (Skinner & Bartlett) Major mining equipment should be configured by the OEM/OTM to be a natural extension of the mine operators Local Area Network. Hardware technology should be designed to be “plug & play” regardless of its intrinsic proprietary nature. Third-party applications can be readily integrated and cohabitate with, OEM software and application architecture. In all cases, data generated by an application is the sole property of the owner/operators while respecting the confidential nature thereof. Accessibility to the data will be freely provided without the need for additional interface programming

10. May 15, 2006 10 Slope Stability Radar

11. May 15, 2006 11 Slope Stability Radar

12. May 15, 2006 12 Simulator Utilization New Operator Training 1100 Operators Trained In Last 2 Years Control Familiarization Reduces Time Required In Field Proper Operating Procedures Reinforces Classroom Instruction Emergency Procedures Provides Opportunity To Practice Emergency Responses That Would Otherwise Be Unavailable

13. May 15, 2006 13 Morenci Simulator Results Baseline Findings Emergency Procedures 80% Failed To Successfully Respond To Fire 60% Failed To Successfully Respond To Loss Of Brakes Equipment Abuse 85% Had Some Form Of Brake Misuse 40% Indicated Misuse Of Transmission

14. May 15, 2006 14 Conclusions Mining R&D with Corporate mandate provides support for internal innovation More projects can be evaluated and successful projects have business case $ available to find solutions Encourages sameness and alignment of technology Benefits accrue to all properties Better networking with other industry representatives Vendor channel established to be heard Can generally stay abreast with OEM/OTM developments Allows us to coordinate and represent industry-level efforts