Techenomics Mongolia LLC Business Council Mongolia 26.1.2013

Presentation by :

Chris Adsett - CEO

• Techenomics International, trading as Techenomics

Mongolia LLC in Mongolia, specialise in providing Oil

Analysis Services, Non Destructive Testing (NDT),

Magnetic Plug Inspections, Filtration and Contamination

Control Management Systems, and ONSPEC Specialty

Lubricants to the mining, earthmoving, construction,

offshore production, shipbuilding, and transport industries

in Australia , South East Asia, Mongolia and East Africa.

Techenomics is an ISO9001 Quality Endorsed Company.

Who we are

• The company has been in operation for over 25 years. With

operations located in the Hunter Valley, Bowen Basin and

Perth in Australia , Batam and Kalimantan in Indonesia,

Mongolia, PNG, Thailand, Istanbul and Madagascar,

Who we are

• My talk today is about the Importance of oil analysis to

Industry of which mining is the biggest industrial sector in

Mongolia. Power generation and rail transport are also

industries that benefit from condition monitoring/oil

analysis.

• Oil analysis is importance as along with associated tools it

will save money, improve operating performance, lower

unscheduled downtime and decrease hydrocarbon usage.

Importance of Oil Analyis

29 January 2013

Loss of Usefulness

Surface Degradation(70%) Obsolescence (15%) Accidents (15%)

Corrosion (20%) Mechanical Wear (50%)

Abrasion Adhesion Fatigue

Life expectancy factors

Preventing Failure

29 January 2013

Effects of dirt on hydraulic systems

and lubrication

• 50% OF COMPONENTS NEED REPLACING THROUGH WEAR. - Rabinowitz Massachuesetts Inst. of Tech., 1981 • 55% OF PROBLEMS DUE TO DIRT. - DTI Survey of Hydraulic equipment, 1983 • A BEARING WITH 100µm FILTERED OIL HAS 1/100th LIFE OF 3um FILTERED OIL. - Jackobson, SKF, 1987 • 70% OF FAILURES TO BEARINGS IN INDUSTRY ARE CAUSED BY INGRESSION OF DIRT - Forschungs Vereiningung Antriebstechnik

29 January 2013

•Built in Contamination • Cylinders, fluids, hoses, hydraulic motors, lines and pipes, pumps, reservoirs, valves, etc..

•Generated Contaminants • Assembly of system • Operation of system • Break-in of system

• Fluid Breakdown •External Ingression

• Reservoir Breathing • Cylinder rod seals • Bearing seals

•Maintenance Introduced Contaminants • Disassembly / assembly • Equipment Servicing / Top up oil

Sources of contamination

14/11

16/13

15/12

17/14

18/15

20/17

19/16

21/18

100% 300% 500% 700%

13/10

Hydraulics and Diesel

Engines

Journal Bearings

and Turbo Machinery

Rolling Element

Bearings

Gearbox and Other

200% 400% 600%

ISO Code

Life Extension Through Contamination

Control

Contamination Control

How Much “Dirt” is present in ISO 18/16/13 Oil?

How Much of a Difference Will Cleaning Your Oil from

ISO 23/21/17 to ISO 18/16/13 Really Make?

Example: 60 LPM Pump Working 20 Hours / day for 300 Days

532.1 Kg/yr

66.4 Kg/yr

16.6 Kg/yr

Amount of “Contaminants” Flowing

Through Pump in One Year

ISO 18/16/13: 0.77mg/L x 60 = 46.2 mg/min x 60 min x 20hrs x 300 = 16,632,000 mg/year = 16.63Kg

ISO Code of Fluid

ISO 23/21/18

ISO 21/18/15

ISO 18/16/13

0

10

20

30

40

50

60

70

80

90

100

Yr 1 Yr 2 Yr 3 Yr 4 Yr 5

Hydraulic Fluid Consumption Hydraulic Breakdown Frequency

Australian company claimed an almost unbelievable 97% reduction in hydraulic components failures in 5 years after

implementing a contamination control program

Facts

0

10

20

30

40

50

60

70

80

90

100

0 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8

Action Plan: Cleanliness Targets Sampling Ports Improved Filters and Breathers On-site Particle Counts

Achievements: 75% reduction in oil consumption 80% reduction in hydraulic repairs

Same company on another site • 50% reduction in bearing purchases • 80% reduction in hydraulic pump replacement; • 83% reduction in oil consumption; • 90% reduction in pump overhauls; and • 90% reduction in frequency of lubrication failures.

Facts

Proven Results

13

$-

$100,000.00

$200,000.00

$300,000.00

$400,000.00

$500,000.00

$600,000.00

$700,000.00

$800,000.00

0

2

4

6

8

10

12

14

16

18

Q1

- 1

999

Q2

- 1

999

Q3

- 1

999

Q4

- 1

999

Q1

- 2

000

Q2

- 2

000

Q3

- 2

000

Q4

- 2

000

Q1

- 2

001

Q2

- 2

001

Q3

- 2

001

Q4

- 2

001

Q1

- 2

002

Q2

- 2

002

Q3

- 2

002

Q4

- 2

002

Q1

- 2

003

Q2

- 2

003

Q3

- 2

003

Q4

- 2

003

Nickel Mine - Western Australia

Failures Value

Fluid Management Program Implemented

Fluid Management Program Ceased

Techenomics Abilities

FLAC SERVICES

•The complete industrial site management “system” that ensures

the elimination of contamination of Fuel, Lubricants, Air and

Coolants.

•The system can be applied to a complete mine site or modest

workshop to reduce the wear caused by contaminants introduced

through poor maintenance practices.

•It’s not uncommon to improve component life by 3-4 times and

reduce lubricant consumption by as much as 50% when the FLAC

system is implemented.

Wear metal (Lead) and Oil Viscosity Trending

Oil Analysis Case Study

Oil Analysis Case Study

Condition Monitoring with Oil analysis

Imagine being able to see exactly what’s happening inside an Engine, Gearbox,

Hydraulic system, etc. Oil analysis is a preventive maintenance tool that provides

of fluid condition and the internal condition of a component or system without

disassembly. What would be happen if we do not care about the health of our

machines.

We will look / find the components of the machine as shown below :

Techenomics in Mongolia

• Full condition Monitoring services,

including oil grease, coolant,

transformer oils and fuel analysis.

• Hydraulic oil testing including

foam.

• Operate extensively at regional

level.

Going forward

• Develop regional laboratories in

regions such as Tsogt Tsetsii.

• Filtration units to refurbish oil.

• Vibration Analysis.

• TFMS to assist Mongolian

companies reach international

standards of oil cleanliness.

Global Economy

We remain confident in the long term outlook for

the global economy 1. Encouraging signs have emerged in

the

external environment

• A range of Chinese leading

indicators suggest economic growth

has stabilised at an elevated rate

• In the United States, consumer

confidence and retail sales have

improved with initial signs of a

recovery in the housing market

2. Our positive long term view remains

unchanged

• Chinese GDP is forecast to almost

triple by CY25

• Urbanisation and industrialisation will

remain the primary drivers of

economic growth

Closing

Thank you for your time

Please feel free to take one of our cards or you may

contact us at

info@techenomics.com

20