Innovation and Technology

Our investments in innovation, research and development seek to bring competitive advantages to mining and metallurgy operations. This position is also aligned with fulfilling the goals established for the three strategic areas: Growth, Operational Excellence and Market Development.

In 2017, we invested US$ 8.5 million in new technology research and development. The amount is 5.8% above that realized in 2016 (US$ 8.0 million). All innovation projects are developed using funding from the Finep Financiadora de Estudos e Projetos fund, and some are executed in partnership with other institutions, such as the Empresa Brasileira de Pesquisa e Inovação Industrial (Embrapii), with which we had six contracts completed and 11 active at year’s end. Regarding technology, the main highlights were the biomass boiler projects in Três Marias, the dehalogenation of the Waelz oxide by autoclave and the transformation of the Waelz furnace slag for use in the cement industry, in Juiz de Fora.

The boiler came on stream in March and the results achieved with the substitution of 1A oil (derived from petroleum) by renewable fuels were significant. CO2 emissions were reduced by more than 33,362 tonnes — which represents about 22.1% of the unit’s total emissions. Another benefit is that the fuel — eucalyptus chips or sugarcane bagasse — is produced in the region, which helps to promote the local production chain and contributes to regional development.

For the autoclave project, the company developed and patented the technology, which allows greater flexibility in the use of the raw material in the halogen extraction process, consisting of the removal of fluorine and chlorine, halogens that interfere with the efficiency and control of electrolysis. This new process will provide processing for all Waelz oxide whose halogen has been removed by hydrometallurgy and, thus, boost the capacity of the ustulator to treat more concentrates. Without the autoclave, the Waelz oxide produced must be passed through the furnace, taking up space in the process or reducing the treatment capacity for zinc concentrates. The process is in the final stages of testing and should be operating at full capacity as of the first quarter of 2018.

Also in Juiz de Fora, the slag from the electric arc furnace is being transformed into a Waelz aggregate for use in the cement industry. The unit is already sending the product to the cement factories at a rate faster than waste is produced.

Solar Energy

Another project in progress, which also resulted in a patent, is to use solar energy in the electrolysis process at the Três Marias facility. Solar energy is used to generate direct current and, today, electrolysis requires this type of current. With this new technology, which should be tested in 2018, the process will be optimized. The big challenge is to have a plant that permits the use of many solar panels – and Três Marias has an inactive dam that will allow just that.

Industrial Automation Master Plan

As of the definition of Automation as an enabler of the company’s strategy and facing the challenges of Industry 4.0 and the Internet of Things (IoT), we put together an Automation and Information Master Plan (PDAI). Started in May 2016 and approved by our Board of Directors in September 2017 its goal was implementation of a digital transformation of our production units and new unit projects; above all, of underground operations with a long-term vision (10 years). In 2017, the PDAI had 15 projects under development, out of a total of approximately 500 in the portfolio.

The plan focuses on operational excellence for reducing costs with specific consumption taregts, optimizing the use of labor, operating stability, maximizing asset use, increasing productivity and, in particular, improving safety.

The plan is divided into four chapters:
❯ Greenfields Projects
❯ Mine (Digital Mining®)
❯ Processing
❯ Smelter

For the Greenfields Projects, we are committed to designing new units with the most appropriate level of automation; that is, what we expect to reach in the units already in operation only in the long-term. The most recent example is the Aripuanã project.

However, at that moment, our priority is underground operations, where we have the greatest opportunities for improvement. Thus, we have placed big expectations on Digital Mining® to reduce the severity of our accidents, increase our productivity, lower our costs, boost the availability and productivity of our assets and increasingly monitor and operate surface operations.

In ore Processing and Metallurgy chapters, we seek to raise the technological level of these processes, which are already automated, in search of operational excellence. As the levels come down, safe, well-controlled and stable processes guarantee the competitiveness of the business.

Digital Mining®

One of the chapters in our PDAI, Digital Mining® was created to facilitate the application of digital technologies in underground mining and brings significant gains by applying the concepts from the IoT, autonomous operation, asset management and process control in mine operations. In addition to improving working conditions and making the mining activity safer through the use of automation, this initiative helps boost productivity, maximize asset utilization, improve operational stability and, as a result, lowers operating costs.

Among the most important are:

Remote Detonation: A pilot project conducted at Morro Agudo to improve safety and increase productivity in operations. By means of a radiocommunication system, installed inside the mine, it is possible to carry out detonations in an automated and remote manner. Unlike the conventional process, which requires an on-site operator to prepare and detonate the explosives at a safe distance, the new technology allows setting it off from within a control room, thus reducing the employee’s exposure to risk and boosts operational efficiency. The project is part of the Morro Agudo Support Pillar Recovery program, and should be implemented in 2018, with an estimated time gain of 1 hour/day. The initiative will be replicated at our other mines.

On-demand Ventilation System: The project has several phases, the first being the implementation of control of the principal fans — already in operation in Vazante and Cerro Lindo. At the end of each shift, the mine is empty for a time, which is when detonations are scheduled and the gases that need to be eliminated are released. But, since the mine is empty, it is not necessary for the fans to run at full force. Through automation, it is possible to program a reduction in power to the fans during this period, which allows a cost-savings with electric power. In the first phase in Vazante alone, we estimate that we achieved savings of 2,246 MW of energy/year, enough to supply 1,224 houses, on average, in addition to improvements in safety. The plan is to apply the system in the other mines.

Collision Prevention System to Reduce Accidents with People and Machines: A system to prevent collisions between machines and equipment in the mine and the operators that are moving about in the underground. It consists of an electronic identification device (tag) in the miner’s flashlight that begins to blink as he approaches a machine or person and, in turn, this sounds an audible alarm so that the operator is alerted.

Simba Automation: The pilot project was tested in Vazante and is based on the autonomous operation of machines underground in the mine. A fully autonomous drill has been developed that can be left untended and would continue to operate autonomously during shift changes. Still in the testing stage, in three months the project generated an estimated additional 1.2% of ore during the year (12 thousand tons), and there is the possibility of even more gains as the project evolves.

Manufacturing Execution System (MES): The MES is a management system using information in real-time to strengthen the production routine. It began in Cajamarquilla and today it is in the execution and control phase in Vazante. The system has already begun to be implemented in Três Marias after which it will be extended to cover operations in Juiz de Fora. Developed jointly by the areas of Automation, Management and IT, the MES is designed to strengthen routine management, based on appropriate methods and tools, and assess the benefits that are associated with the company’s improvements and synergies. This information — such as up-to-date inventory information, shipment of production confirmations for each shift, a secure and automated database — promotes optimization at all production stages ranging from the issue of a service order to the shipment of finished products, producing more assertive reporting for decision making.

Data Networks for Underground Mines: Throughout 2017, we created our network architecture, which will be responsible for enabling our Digital Mining program, through which we can remotely control the operation and, through the high data transmission capacity, collect information from people and machines, transmit voice communication and images, thus enhancing security and enabling our new model.

In order for the entire Plan to be implemented and deliver effective results, everyone’s commitment to behavioral change and the development of our employees’ critical skills is important. We have to understand, at all levels of the company, from the most operational areas, that automated processes bring more gains, proffer more safety and make the working environment a better place.

At the School of Automation program, we are also planning to hold virtual classes to develop behavioral skills and automation techniques focusing on Innovation and High Performance at various levels of the company. The pilot project will be adopted in the Vazante and Cerro Lindo units.

Mining Lab

The first initiatives of the Mining Lab program, which we created in 2016 to provide support for startups with innovative projects in the mining industry, are already beginning to deliver results, with five projects in the pre-operational testing phase. The initiatives were selected in early 2017 among 115 registered. The first projects selected for this program were in renewable energy and nanotechnology. The goal was to identify technological solutions that enable as well replace traditional energy sources such as fossil fuels with more efficient and renewable alternatives, and using nanoparticle recovery technology in mining industry processes and products.

The Mining Lab program was a pioneering and daring initiative to link the world of mining and metallurgy to that of B2B startups. The investment in the fist group was by approximately US$ 277.8 thousand and already has a return of US$ 379.4 thousand in cost reduction. The projects also provide gains in environmental and social issues, such as reducing atmospheric emissions through increased energy efficiency and renewable energy projects, and promoting the generation of regional income, with consequent benefits for communities near our operations.

Projects included in the mining lab program

Scope

Startup: Bchem Solutions
Renewable energy – This technology turns residual vegetable oil into a biodiesel fuel with high combustion power, which can be used as fuel for mining equipment, with low production of pollutants in combustion. The environmental gain from this technology comes at both ends: it prevents used oil from being dumped in the environment, polluting rivers and soil, and produces a biodiesel that replaces the fossil fuels traditionally used in mining. There are also cost reductions for the plant.

Project Phase

A pilot plant will be installed at Vazante and begin testing oil in April 2018.

Startup: ZEG Environmental
Renewable energy – A process called flash dissociation transforms organic waste into gas and vapor, which can then be used in the company’s industrial processes, reducing the consumption of fossil fuels, which are more expensive and polluting. Cornstalk, scraps of wood and tires, among other things, can be used as starting materials.

The expectation is that equipment will be installed in Juiz de Fora during 2018 and that production will start in 2019 using eucalyptus scrap.

Startup: Bioware – Development of Energy and Environmental Technology
Renewable energy – This technology transforms organic material (biomass) into fuel oil, which can be used in equipment that produces zinc oxide. The project will use eucalyptus, already existing in the region, as its raw material. In addition to using a renewable source fuel, whose use generates lower emissions of greenhouse gases, the project will generate income for the region through the purchase of eucalyptus.

Testing will begin in June 2018, expected to be delivered in August 2018.

Startup: nChemi
Nanotechnology – This technology consists of producing nanoparticles of treated metal oxides with organic molecules on their surfaces. These molecules can have specific characteristics, such as compatibility with organic, aqueous media or polymer matrices, response to temperature, pH and other factors. The solution s designed to assist in the development of nanoparticles and the pilot application in samples of the effluents from the Três Marias refinery, to capture magnesium cations. In addition to the development of innovative technology for our operations, which may help reduce the amount of metals contained in effluents, this technology may be promising for the capture of other commercially valuable ions such as those of gallium, cadmium, tantalum and others.

nChemi synthesized the nanoparticle according to schedule, which in initial testing still presented low efficiency of absorption of magnesium. With our support, the company is looking for ways to improve absorption efficiency. The project is expected to be completed in June 2018.

Startup: Ecosolutions
Nanotechnology – The technology is designed to improve the separation of minerals in a given effluent, through physical processes. As an additional benefit in the process, the company is able recycle water and filter out minerals with potential sales for agriculture.

Project is with 89% ahead of schedule in the construction of the prototype. The supplier partnered with Senai-Cimatec, which issued a report with the tests on its own pilot equipment that served as a basis for designing the field test equipment. The project is expected to be finalized, with a conclusive report, in June 2018