How to unlock productivity savings in mining operations part 1
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The document outlines significant productivity challenges in mining operations, highlighting that productivity is down 28% compared to a decade ago. It emphasizes the importance of maintaining conveyor systems, particularly focusing on the cost and frequency of idler roll replacements, which greatly affect operational efficiency and costs. Improvements are suggested through better roll design and management to reduce downtime and associated expenses, ultimately aiming for enhanced productivity and cost-effectiveness in mining operations.
How to unlock productivity savings in mining operations part 1
- 1. How to Unlock Productivity Savings in Mining Operations Part One in a Series: “Worldwide mining operations are as much as 28 percent less productive today than a decade ago…..” “Miners are seeking to cut costs incurred to produce mining output” (McKinsey Consulting 2015) A Report By: David Mallinson 11/06/2017 Part 1 “Not built to Last”
- 2. How to Unlock Productivity Savings in Mining Operations (Part One: “Not built to Last”) Executive Summary - As hard commodity prices, notably coal and Iron Ore soften dramatically miners are looking for ways to improve productivity - There are a number of different ways in which this can be achieved. One of these focuses on the cost of conveyor roll usage and replacement. - Two things need focused attention o The key drivers of conveyor roll failure needs to be fully understood in particular, the causes of bearing failure o Out-dated methodologies in conveyor construction need to be reviewed - Managing risks to mitigate productivity losses is critical - Solutions to this are: o Rolls that last longer, reducing the frequency of change-outs o Severely reduced roll change-out times - Rolls need re-designing to a quality construction - Roll Sets for conveyors need re-engineering - The upsides: o Avoidance both direct and indirect costs o Very significant productivity gains Overview -“Worldwide mining operations are as much as 28 percent less productive today than a decade ago…..” “CEOs have been acknowledging to investors that poor productivity performance must be addressed” “Miners are seeking to cut costs incurred to produce mining output” Source: McKinsey: “Productivity in mining operations: Reversing the downward trend” 2015 Prices are under pressure and this looks likely to continue 2010 2011 2012 2013 2014 2015 2016 Trend F'cast Q1'17 - Q4 2018** Indicator Aluminium ($/mt) 2173.12 2401.39 2023.28 1846.67 1867.42 1664.68 1604.18 Iron Ore ($/dmtu) 145.86 167.75 128.50 135.36 96.95 55.85 58.42 Copper ($/mt) 7534.78 8828.19 7962.35 7332.10 6863.40 5510.46 4867.90 Lead ($/mt) 2148.45 2400.81 2064.64 2139.79 2095.46 1787.82 1866.65 Tin ($/mt) 20405.62 26053.68 21125.99 22282.80 21898.87 16066.63 17933.76 Nickel ($/mt) 21808.85 22910.36 17547.55 15031.80 16893.38 11862.64 9595.18 Zinc Nickel 2160.74 2193.90 1950.41 1910.26 2160.97 1931.68 2089.98 Gold ($/troy oz) 1224.66 1569.21 1669.52 1411.46 1265.58 1160.66 1248.99 Platinum ($/troy oz) 1609.75 1719.48 1550.84 1486.55 1383.57 1053.20 987.09 Silver ($/troy oz) 20.15 35.22 31.14 23.85 19.07 15.72 17.15 * Source: World Bank ** Source: www.focus-economics.com KEY COMMODITY PRICES 2010-2016* 1
- 3. Industry margins under pressure due to pricing + escalating Capex and Opex As “core” hard commodity prices come under pressure Miners are seeking to boost productivity by reviewing all aspects of their operations notably Capex and Operating Costs to support their margins. There are many ways to address this issue: - Broad scale cost reduction efforts across the enterprise, benchmarking, restructuring etc. - Business transformation initiatives and programs - Capital spending squeezes, Working Capital reviews, review of cost of funds etc. - Lean management initiatives…pilot and scale up…self-directed teams etc. - Increasing production No doubt there are many more initiatives that could be deployed. At its most dramatic it may also mean an exit from the industry or industry segment if all attempts at productivity improvement fail and/or cannot keep pace with the pressures on margin. The whole basis of productivity is about ‘doing more with less’ so it is natural that at a time of margin pressure mining CEO’s and their leadership teams are actively involved and motivated to identify and implement solutions. Keeping things moving The average mine in Australia has around 15km of conveyors – some up to >30km, with CHPP (Coal Handling Preparation Plants) range >20Kms each and if you include bulk handling direct to seaport it very often extends beyond 50km. Keeping this ‘supply chain’ moving efficiently and effectively is one key to enhanced productivity If one conveyor stops….it all stops. 2
- 4. Managing Risk There are a number of risks associated with keeping and maintaining productivity associated with the conveyor and its operation. These range from the choice of the belt itself through to belt damage – at its worst belt ‘slicing’ and scalping from rollers – through to maintenance and replacement of conveyor rollers. Belt Damage occurs from the conveyor idler rollers when: - Shell wear caused by natural belt ‘hysteresis’ and other environmental causes when the bearings are tight, (higher ‘Rim Drag’) or become semi-seizing. This results in multiple flats forming on the shell surface around the roll. As a consequence the TIR/MIS becomes exaggerated. This in turn causes the belting to ‘Bounce’ on the rolls exerting forces, above the maximum allowable. This effect on the belting creates increased energy consumption, wave propagation forces, harmonic forces, tracking true-ality and hammering forces on all the adjacent rolls and associated surrounding infrastructure The outcome is overloading of all the conveyor componentry and structure leading to severe belt & carcass damage and eventual shredding of the carcass strength. In some cases this has been known to destroy very long sections of the conveyor as a whole & cause ‘Fire Initiation’ (Friction) from rolls – as well as maintenance and replacement of conveyor rolls. There have been many instances of superstructure failures requiring rectification from this type of roll failure issues. - NOTE:- & ‘Fire Initiation’(Friction) from rollers is an alarming occurrence and the whole industry knows it - because by Law the Mines Inspectorate has to become involved in such instances & has to close the mine while detailed reporting is undertaken. - Shell Over-Heating due to friction to the belting cover from a seized roll which can initiate a ‘Fire Hazard’ or at worst case smoke inundation which in an underground mine can cause mine closure for more than 24 hours whilst a full review and Mines Inspectorate Notification activities take place. - Shell wear caused by natural belt ‘hysteresis’ and other environmental causations results in oval holes in the shell which shaves the belting covers creating severe belt damage and eventual shredding of the carcass strength. Often called ‘Potato Peeling’ - Shell to bearing housing weld failure. This has the effect of slicing the conveyor - often called the ‘Pizza Cutter Effect’ The results can be a catastrophic loss in production. Case studies in the industry reveal losses can be tens of millions of dollars a day in lost production depending on the size & nature of the operation. Idler Roll Failure is another key cause of roll replacement and/or belt failure. This occurs in many different ways: - Incorrect specified roll parameters or quality. - Over load characteristics. - Conveyor Design flaws. - Bearing failure. - Roll Sealing componentry causing high ‘Rim Drag’. - Shell wear (Belt Circumferal Difference causing 'Belt Hysteresis’). - Shell to bearing housing weld failure. (The ‘pizza cutter’ effect). 3
- 5. - Shell Grade competency i.e. Conventional rolls = Grade 200-250mpa (Shell flexing & bending creates sprag locking the ball rolling elements and seizing the bearing). - Bearing seizure causing shell wear, flat-spotting & holing. (The potato peeler effect). - Bearing seizure causing frictional heating at contact between the shell tubing and belt cover. (Fire Initiation & Smoke emissions). - Structural design & installation limitations or competency, including environmental. - Poor Handling Practices. Idler Roll Change-out is a natural result of roll failure. How this is handled, whether as a result of routine inspection or sudden failure can prove time consuming and costly in a number ways: - Frequency of idler roll replacement - Direct cost of replacement rolls - Replacement activities - Production Downtime Indirectly there are a number of further potential costs and risks associated with the above including OH&S, efficient use of employee resources etc. Looking at the each of these in turn: Idler roll replacement: - The average mine with >15km of conveyor has 15,000 idler rolls. On average 20% of these require replacement every year. - Every stoppage to do this results in lost productivity Direct Costs: - Typical roll costs are approximately $200 per unit - Annual cost – 200 x 45,000 x 20% = $1.8m per year - If idler roll replacement in one year can be reduced to zero the saving would be $1.8m - If idler roll replacement in 2 years was (say) 0% this saving would be $3.6m These sums are not insignificant. The operation can either employ these funds more usefully and productively – or drop them to the bottom line. But these are just the direct costs of idler roll replacement. The indirect costs can be similarly impactful. Consider the following: - Labour units required - Conveyor stoppage and associated direct costs. This has been estimated at typically $0.2m EBITDA per hour1 - Energy consumption on restarting the conveyor In short, reducing the requirement for roll replacement can save considerable sums of money and resources than can be redeployed or depleted over time via natural attrition as operational effectiveness improves. Replacement Activities. It is generally agree that roll inspection and replacement activities are best kept to a minimum. Typical of these activities would be: 1 The Hidden Costs of Bulk Materials Handling in Australian Mining Operations Part Two – “Show Me The money” 4
- 6. - Routine inspection and problem identification - Materials and labour planning including cross functional co ordination - Roll replacement The average time for roll replacement from fixed frames is approximately 1-2 hours and two labour units Some traditional rolls can weigh in excess of 190kg presenting greater Occupational Health and Safety issues. Some of these OH&S effects are not immediately obvious. Heavier components increase the risk of injury when being manually handled. Conveyor idler change out is a unique situation, where it is difficult or prohibitively expensive to provide mechanical assistance. Anything that can be done to reduce roll change-out time will have a direct and significant impact on cost productivity and profit. These three areas provide opportunities for greater improvement and very significant cost savings Idler Roll Failure is another key cause of roll replacement and/or belt failure. This occurs in many different ways: - Bearing failure. - Shell wear (Belt Circumferal Difference causing 'Belt Hysteresis’). - Shell to bearing housing weld failure. (The ‘pizza cutter’ effect) - Shell Grade competency i.e. Conventional rolls = Grade 200-250mpa (Shell flexing & bending creates sprag locking the ball rolling elements and seizing the bearing) - Bearing seizure causing shell wear, flat-spotting & holing. (The potato peeler effect) - Structural design & installation limitations or competency, including environmental. - Poor Handling Practices Idler Roll Changeover is a natural result of roll failure. How this is handled, whether as a result of routine inspection or sudden failure can prove time consuming and costly in a number ways: - Frequency of idler roll replacement - Direct cost of replacement rolls - Replacement activities Indirectly there are a number of further potential costs and risks associated with the above including OH&S, efficient use of employee resources etc. Realistic Options What can Mine operators do? - Bear the costs and work harder to keep them to a minimum - Reduce direct costs of roll purchases – negotiate better prices and service - Stretch manpower associated with these activities to keep labour costs to a minimum 5
- 7. There are no doubt a number of creative alternatives but in the end roll replacement is inevitable; it is therefore best kept to a minimum. At the same time the speed at which the roll replacement takes place must also be minimised and carried out effectively. Solutions 1) Rolls that last longer 2) Solutions that dramatically reduce roll replacement time, cost and risk. Outcomes - Total Cost of Ownership due to roll purchases dramatically reduces - Productivity improvements due to significant decreases in line stoppages 1) Rolls that last longer: To do this the rolls must be designed to: - Have reduced bearing failure – the key cause of roll replacement - Feature significantly improved TIR2 and MIS3 readings. These are to do with the roundness of the pipe outer shell. It is essential to ensure pipe roundness to maximise efficiency and reduce risk of shell failure and belt damage and reduce the energy usage. - Feature reduced Rim Drag - Be made of tougher material - Weigh much less Reduced bearing Failure: Contamination. This occurs when foreign material enters the bearing. It may be dirt, dust or water causing corrosion. All bearing housings are fitted with seals to prevent this. They are fitted to either side of the bearing. However fluctuations in ambient & operational temperatures between the inside area of the roll shell and the outside area, apply positive or negative pressure forces. These help the ingress of externally built up contaminants such as welding and dust debris & corrosion and moisture accumulation contaminants. These contaminants transit past the lubricant and protection sealing components if ‘Breather Holes’ are employed in the manufacturing process. Lubricant Failure. Lubricant failure can be caused by a loss of grease from mechanical forces or over heating of the grease by generally accepted parameters that degrade the specifications, or if the grease supplied is not suitable for the environment in which the rolls are employed. 2 TIR is a measurement of the gross out of radius dimension of an idler. It measures ovality and bending of the shell tube. It also checks whether the heads have been inserted squarely or have deviated from true, due to welding processes. It is measured by turning an idler on its axis and measuring the surface position on a dial gauge of several points along the idler. The furthest reading is subtracted from the closest. 3 MIS is a measurement of the maximum instantaneous slope of the pipe shell. MIS is measured by taking an accurate reading around the diameter of the pipe every 6 degrees of rotation and comparing each reading to its adjacent readings. This indicates the slope of change of roundness, ovality or denting of the shell tube. This type of measurement is repeated at three locations along the roller. It has been found to directly correlate to the noisiness of the idler’s interaction with the belt above it. As noise is generated by a vibratory force, any noise is placing more stress on the bearings and associated structural componentry. 6
- 8. Excessive loads, overheating and Brinelling3F 4 . This failure group is related to the damage that occurs to the bearing’s surface once its elastic load limit has been exceeded. (Elastic load limit is the amount of force a material can take and still return to its original shape once the force has been removed) The smooth surface of the bearing becomes galled and fine particles of metal begin to break away. Once this starts, the bearing will quickly heat up and weaken the properties of the lubricating grease, which leads to thermal runaway and self-destruction. Misaligned Structure, Idler Sets and the operating environment can contribute to idler work loadings that are outside their specified parameters. Misalignment. A bearing or idler roll that is not mounted truly at right angles to its rotating forces can develop premature wear points. This mis- alignment4F 5 can add overload forces beyond the capabilities of the bearing(s). This then increases the TIR reading and adds to the ‘out of balance’ forces. The rolls subsequently respond with poor performance and reduced life span. These loadings can drain energy and increase maintenance levels. They are typically the result of poor design or poor installation. This has led to an industry practice where short lived rolls are being considered as consumables, instead of being listed as failing assets. Poor handling. This occurs during transport from the manufacturer to site and during installation and can distort tube, distort bearing housings and damage bearings. Testing by D.R. Watson and J. Van Niekerk of South Africa has shown that a force of approximately 2 tonnes was sufficient to cause plastic deformation of a 3mm thick end cap on a standard roll. Improved TIR and MIS TIR, MIS, and idler performance. TIR is a measurement of the gross out of radius dimension of an idler. It measures ovality and bending moment of the shell tube. When installed, poor TIR places a continuous shock load on the bearing with every revolution of the idler. It also creates a flapping effect in the passing belt as it is lifted and lowered on each revolution of the idler. This phenomenon is evidenced by vibration and noise. As this energy is transferred into the supporting structure, it strains and can eventually fracture, substantial support fabrications. 4 Localized surface corrosion; a cause of damage to bearings 5 A conveyor can run true with idler rolls in +/- squareness state balancing the tracking of the belting within limits. This is not a recommended method to track a conveyor belt for longevity. 87
- 9. MIS has been found to directly correlate to the noisiness of the idler’s interaction with the belt above it. As noise is generated by a vibratory force, any noise is placing more stress on the bearings and associated structural componentry. Improved Rim Drag Rim Drag & Idler performance. Rim drag is the amount of force needed to turn an idler in Newtons. This force is multiplied by the speed of the conveyor in meters per second, to determine the energy required to turn the idler in watts. Lower rim drag, means a lower power bill. Tougher material Material used and idler performance. Typically rolls are made of carbon (black) steel. However to perform effectively and last longer rolls need to be made of steel with a much higher tensile strength. Not only will this tougher material provide superior wear characteristics it will also deliver much improved surface smoothness. However, if an idler surface is too smooth, it will slip against the belt creating flat spots and heat in the idler. (This is an issue with high grades of quality stainless steel rolls that ‘work- harden’ and polish) A materials is required that combines a longer wearing hardness with sufficient surface corrosion(‘Tea Staining’), to ensure that work hardening and slippage is reduced to as low as practical achievable. Less Weight Impact of idler roll weight. When considering the true cost of any piece of equipment, one cost that is often underestimated, is the cost to human well-being. Conveyor idler roll change-out is a unique situation, where it is difficult or expensive or impractical to access by remote means to provide mechanical assistance. Some of the OH&S effects are not immediately obvious. Heavier components increase the risk of injury when being manually handled in an extended physical manner often associated with confined space not unlike those in the confines of a conveyor system. 2) Solutions that dramatically reduce roll replacement time, cost and risk. The key issues to be addressed to reduce time spent on replacing idler rolls revolve around the following: - Fixed Idler Sets for idler rolls - Specialized belt lifting equipment - Plant and or equipment to gain access by personnel and replacement parts - Work in ‘hazardous areas’ - Minimal or no real or readily accessibility to installed locations - Height awareness in elevated locations - Disruption to operations 8
- 10. Fixed Idler Sets. These generally require the belting to be lifted if possible or complete removal and to be stood aside for roll replacement prior to re-installation under the conveyor. This is both time consuming and extremely hazardous. When in operation many of these are subject to being clogged with dust, dirt, mud, moisture and other debris. This can be time consuming and even hazardous during change-out. The ideal idler roll set needs to accommodate the requirements for roll change-out simply and effectively. Typical fixed set roll change outs can take up to 2 hours per frame dependent on complexity of the location. This time needs to be significantly reduced if improved productivity is being sought. Technically qualified staff. Specialised equipment and technically qualified staff are required since belt lifting equipment must be deployed. This requires planning and organising the suitable resources - which may be deployed elsewhere on site for other work commitments. Idler roll replacement should be carried out using relatively unskilled labour. Work in ‘hazardous areas’ This includes working in areas such as between the conveyor’s fixed assemblies requiring the conveyor belt to be raised for change outs. The ideal roll changeover would avoid obvious work hazards and severely mitigate risks to Human well-being. Roll changeovers in the ideal world, would be conducted without stoppages to the conveyor belts and subsequent impacts on productivity at the same time reducing OH&S risk. Conclusion - The impact of roll change-outs significantly impact on mine productivity. - Most mining enterprises are seeking to preserve and/or improve margins in the light of soft commodity prices. - Conveyors and conveyor management practices are worthy of detailed investigation and innovative thinking. - In this way attempts can be made to release the obvious benefits which are estimated to be in the millions of dollars per year. Click here to receive Part 2 in this series: “How to Unlock Productivity Savings in Mining Operations” Part Three: “Show Me the Money” 9