Optimising mining operations – a discussion of practical constraints and opportunities

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Outlook

2

Everything feels good now as prices are high. However ...

2011 2012 2013 2014 2015 2016 LTP0

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0

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Gold $/ozCopper $/tIron ore $/tThermal Coal $/t

$/un

it

$/un

it

3

What potential exists in Open Pits?

9 10 11 12 13 14 15 16 17 18 19 202

3

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Кол

ичес

тво

погр

ужен

ных

БелА

Зов,

шт/

час

Часы в течении смены

4

Underground?

0

100000

200000

300000

400000

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600000

700000

800000

900000

Potential Increase winding speed15%

Improve loadingefficiency to 0.9

Eliminate carry back Fill wagons to >95%capacity

Present capacity

5

Processing?

Current Increase availability

Increase cir-culating load

Cyclone improve-

ments

Potential0

10

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30

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Current Lack of ore

Bins full Choke feed

Medium crushers

Choke feed

Medium & Fine

crushers

Fit scalp-ing

screens

Potential0

10

20

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80

Going forward

• Benchmarking & time studies to identify opportunities

• Determine effectiveness of reporting & planning systems

• Determine barriers to change• Value opportunities • Identify & prioritise solutions• Prepare implementation

plans

Diagnosis, analysis, planning

Implementation Perpetuation

Phase 1 Phase 2 Phase 3

3-Phase Process

• Make the implementation plans happen

• Change management – strategy , policy, enhanced working practices, better supervision, training, new technology

• Ensure the improvements are maintained and enhanced through ongoing review and support

• Instill a culture of continuous improvement

• Re-set technical limits – ‘raise the bar’

DIAGNOSING THE OPPORTUNITY/SETTING GOALS

Build a fact base to understand operations

Operating equipment effectiveness

Historical performance

Process maps

Use appropriate tools to set targets

• Theoretical/design limits of equipment (adjust + for safety factor)

• Benchmarking

• Repeated best

• Observations/trial

• Management consensus

• Solid understanding of current operating situation

• Prioritized set of KPIs that drive value

• Specific limits and targets for highest value KPIs

Deliverables

ANALYTICAL TOOLS - MAINTENANCE BENCHMARKING

Performance levels

Organization structure

Spare parts and contractor management

Equipment maintenance strategy

• Maintenance strategy is in place with excellent results

• Maintenance prevention is the main focus

•Workers are flexible to work in different areas

•Team leader concept is fully in use

• Purchasing of equipment is based on total cost of ownership, ramp-up time, changeover time, maintainability, reliability

• Number of vendors reduced• Parts availability, quality,

inventories, and usage are under control

• Full standardization achieved for all machines/parts

• Org boundaries crossed often• Span of control appropriate

for nature of work/worker skills

• Organizational structure clear

• Lifecycle costs part of purchasing decision

• All depts are involved in purchasing process

• OEE is improving fastStandardized parts list is widely used

• Maintenance system exists with good results

• Diagnostic toolsare introduced

• Strategy for major equipment is in place

• Machine history is recorded and analyzed

• Criticality of partsis understood

• Spare parts inventorieshave been decreased and new standards set

• Parts usage is kept under control• Pressure is on parts quality

• Span of control manageable• Staffing is applied well across

shifts• Few classifications exist

• Maintenance is involvedin purchasing of new equipment

• TCO is defined• Standardization has begun• Model lifecycle cost equipment

exists

• Parts usage, quality, availability, and inventories have to be placed under control

• No clear maintenance strategy exists

• Breakdown maintenance widely used

• Organizational structure unclear

• Large number of classifications

• Staffing weak on shifts

• New equipment purchasing is based on initial cost and technical specifications

• Vendors are selected• Parts availability and usage daily

tracking is in place• Pull replenishment system is in

place to reorder parts

Procurement

Level 1“Expert”“Best Practice”

Level 3

Level 4“Basic”

Level 2

Roles of each advisorPwC• Understand current efficiency• Understand actual costs• Implement information systems• Create link to financing

SRK• Understand current effectiveness

through benchmarking• Identifies opportunities• Highlights effectiveness of current

information system• Highlights priority • Overcomes resistance to change

• Understand long term mine plan• Identify future issues • Understand effectiveness of the

planning system• Value potential for change

• Consider re-engineering the operation

• Alternative mining or processing method

• Change of technology

10

Summary• Most mines we have visited can increase productivity by 20-30% • Most changes do not require significant investment or new skills• Key is good quality information and understanding the impact on

productivity and costs• Understanding benchmarks helps overcome resistance to change• Best solutions improve effectiveness as well as efficiency• Start now to prepare for tighter markets