Australian Mining March 2015 by Prime Creative Media

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ONE ON ONE WITH BRYAN QUINN AUTOMATION SAFETY

VOLUME 107/2 | MARCH 2015

FLOODING THE PILBARA AN IRON ORE OVERSUPPLY?

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COMMENT

NO USE IN POINTING THE FINGER

COLE LATIMER

ozmining@cirrusmedia.com.au

ASSOCIATE PUBLISHER MARTIN SINCLAIR Email: martin.sinclair@cirrusmedia.com.au EDITOR COLE LATIMER Tel: (02) 8484 0652 Email: ozmining@cirrusmedia.com.au JOURNALISTS VICKY VALIDAKIS Tel: (02) 8484 0964 Email: vicky.validakis@cirrusmedia.com.au BRENT BALINSKI Tel: (02) 8484 0680 Email: brent.balinski@cirrusmedia.com.au BEN HAGEMANN Tel: (02) 8484 0884 Email: ben.hagemann@cirrusmedia.com.au

empers are fraying in the Pilbara as the iron ore price ingrains itself at a new lower benchmark, and accusations are flying as to who is to blame for the sector’s continuing woes. Much of this comes from Fortescue, following the painful recent reporting of its first half profit – or lack thereof – and a subsequent 81 per cent fall year on year. Fingers are being pointed as to who is to blame. Fortescue says Rio and BHP are at fault, as they continue to expand their operations and increase production. It says this tactic has flooded the market and created an oversupply that is pushing other miners out of the market, such as Mount Gibson Iron and Arrium, which posted a $1.5 billion loss. “As we know in the iron ore business there has been plenty of talk about what projects will come on but they have been delayed and not come on as forecast, but this apprehension of excess supply is influencing the price,” FMG CEO Nev Power said. However it is little surprise that BHP and Rio are continuing their ramp up and increasing their output, all things considered, with BHP alone having spent $32 billion on expansion projects in the last decade. The two companies have pumped excessive levels of cash into developing their Pilbara iron ore assets and have taken the stance that cutting production in the light of falling prices would only work to harm the Australian economy. “I strongly believe that the world will be best served by a sustainable supply of commodities at a fair price, and that capital resources should be directed towards the most efficient sources of that production in a manner that the world gets them as cheaply as possible, in terms of cost, and GROUP SALES MANAGER TIM RICHARDS Tel: (02) 8484 0829 Mob: 0420 550 799 Email: tim.richards@cirrusmedia.com.au KEY ACCOUNT MANAGER SHARON AMOS Tel: (07) 3261 8857 Fax: (07) 3261 8347 Mob: 0417 072 625 Email: sharon.amos@cirrusmedia.com.au SOUTH AFRICA BOB STEPHEN Stephen Marketing PO Box 75, Tarlton, Gauteng 1749, South Africa Tel: 27(011) 952 1721 Fax: 27(011) 952 1607 USA JONATHAN SISMEY Cirrus Media 24th Floor, 125 Park Avenue, New York, NY 10017 Tel: (1) 212 370 7445 Fax: (1) 212 370 7441 Email: jsismey@ix.netcom.com

with the greatest environmental performance and the smallest environmental footprint,” BHP CEO Andrew Mackenzie said. “The only certain effect of stalling production will be to reduce Australian exports.” Rio Tinto holds much the same view. So who is right here? Should production be scaled back, as per Fortescue’s view; are Rio and BHP are simply caught up in a sunk cost effect, and will continue to try and dig their way out of it to little avail? Or are BHP and Rio right in continuing to develop their resources and look for more efficiencies in their existing operations? Despite all the focus being placed on the Pilbara and its iron ore output, it isn’t just an Australian issue. Vale has somehow been left out of this debate, despite ramping up its iron ore production 6.5 per cent and announcing its intention to double iron ore exports to Australia’s main market – China – over the next five years. The plan was revealed at around the same time the iron ore price started to crash, as a ramp up in production by Vale coincided with BHP Billiton and Rio Tinto’s expansion plans, and somehow flew under the Australian radar. The iron ore dilemma isn’t just an Australian problem, and flinging blame isn’t going to solve it. The boom has passed, and the market is in a state of disarray, and many producers will fall by the wayside: that is simply the nature of cycles. Instead of miners working against one another now is the time for the industry to come together to ensure it can get through this global downturn and survive.

LARRY ARTHUR Cirrus Media Suite 203, 3700 Campus Drive, Newport Beach, CA 92660 Tel: (1) 949 756 1057 Fax: (1) 949 756 2514 Email: lharthur@ix.netcom.com GRAPHIC DESIGNER DAVE ASHLEY PRODUCTION CO-ORDINATOR TRACY ENGLE Tel: (02) 8484 0707 Fax: (02) 8484 0966 SUBSCRIPTION RATES Australia (surface mail) $140.00 (incl GST) New Zealand A$148.00 Overseas A$156.00 READER SERVICES 1300 360 126

AUSTRALIANMINING

MARCH 2015

ON THE FRONT COVER

On the front cover we’ve featured an iron ore stockpile at one of BHP’s Pilbara operations. In this edition we focus on the reaction of the major miners to the iron ore price plummet, and how they are attempting to stem the flow. We also sit down with BHP’s relatively new group head of technology, geoscience and engineering, Bryan Quinn, and discuss the miner’s focus on innovation and technology, and how it aims to bring new learnings to the company in an effort to become more efficient and productive. Australian Mining also has a high level insight into the effect of exhaust emission on workers and, in turn productivity, from former West Australian School of Mines head Ifan Odwyn Jones, and how these impacts can be mitigated.

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CONTENTS

TRACKING THE TRENDS

ONE ON ONE ASKING THE EXPERTS BHP’s group head of technology, geoscience and engineering talks with Australian Mining on automation and innovation

22-26

PILBARA SPOTLIGHT

THE YEAR AHEAD The top trends affecting mining in 2015: Part 1

MATERIALS HANDLING

RIO TINTO IN NEED OF A SHAVE Taking the knife to costs in the Pilbara

12-14

34-35

16-20

36-38

MAINTAINING POWER PROCESSES New conveyor drive implementations

PILBARA PRICE PAIN Who is to blame for the price fall?

DRILL, BLAST, GEOMECHANICS RAISING THE STANDARD Larger raisebores to hit Australia

AUTOMATION THE NEXT WAVE OF TECHNOLOGY What is making ripples in new technology

A SENSE IN DRILLING New in-hole technology HAMMERING PRODUCTIVITY Cutting DTH failures SAFETY IN THE WET Blasting in wet conditions

REGULARS

INDUSTRIAL COMMENT PROSPECT AWARDS

NEWS JOBS

48-49

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MARCH 2015

PRODUCT SHOWCASE

42-43

EVENTS

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INDUSTRIAL COMMENT

THE SIX MINING SOFTWARE STRATEGIES CEO OF GREENTREE PARTNER, ADDAX, DAVID SANKEY, LISTS THE CONSIDERATIONS FOR DEVELOPING YOUR SITE’S IT CAPABILITY.

he mining sector in 2015 can be defined by its lack of certainty. From the question of obtaining finance in a cautious global economy to geopolitical unrest, rising costs, declining revenues and market contraction, the sector is beset by unknowns. Despite this, mining and mining services organisations can still build competitiveness and increase profitability by maintaining tight management over the one thing they can control – their own business operations. In the current environment sound business knowledge, high productivity, an eye for innovation and the flexibility to respond to market changes are prerequisites. To support and encourage every one of these traits, a good IT strategy and the right information systems are essential. Following are six suggestions for developing such an IT capability. 1. Go modular These days, few if any companies have the luxury of spare resources waiting to work on getting a “big bang” software deployment right.

Nor do they have the time to spare integrating, updating and maintaining multiple systems. By deploying modular solutions, mining companies can implement incremental change, introducing technologies and processes at a pace that doesn’t overwhelm the business. Typically, when introducing a new solution, organisations begin with the basics: tenement management and financial applications, followed by project and construction modules for managing mine and/ or plant construction. Where mines are already operational, business needs will determine the roll-out order of followon modules such as mobile and fixed plant maintenance, stockpile/pit costing, supply chain management, human resources and payroll. 2. Keep it scalable From exploration and feasibility studies to production and sales, it’s impossible to be sure how big any operation will grow. Rather than face the disruption of upgrading to a larger system a few years down the track, look for solutions that

can grow with your company, supporting additional users, increasing workloads and providing additional functionality as you move through the cycle of mining production. 3. Consider the cloud The cloud offers many benefits to the mining sector including real time access to information from multiple sites, a single source of the truth, complete scalability and a reduction in IT costs. By making information more readily accessible, activities such as monthly reporting can be completed faster and more efficiently. Timely access to information also leads to faster decision making, something that is especially important when dealing with remote locations. In September last year, industry analyst, Frost & Sullivan noted the potential of the cloud for the mining sector in its “State of Cloud

THE SUPPORT SERVICE ARE CRITICAL IN DEVELOPMENT

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Computing in Australia, 2014” report, stating “A reduction in the price for raw materials is seeing mining companies become more focused on cost reduction than growth.” The adoption of cloud solutions is seen as a key way to achieve this. Also, cloud computing is driving innovation in areas such as training apps, solutions for a remote workforce and Internet of Things applications such as driverless trucks. 4. Bring Your Own Device (BYOD) Mobile devices such as tablets and smartphones are excellent tools for providing connectivity to employees everywhere. Used in conjunction with mobile-accessible business applications, they have the potential to streamline processes, improve productivity and enhance communication in the workplace. A well-managed BYOD policy that includes due consideration for IT security can save an organisation money in hardware expenditure and helps to ensure employees are provided with an easy transition to a more mobile way of working. 5. Choose software that is designed for the industry One-size-fits-all business applications can never capture the full complexity of a mining or mining services business. To support efficiency in every part of your organisation, look for a solution that understands mining’s unique challenges and which has been developed with the sector’s interests at its heart.

SCALABILITY IS A MAJOR ISSUE IN MINING IT

The best way to identify such software is to examine the range of functionality on offer. Does the system include tenement management to track transactional statistics such as metres drilled and assays processed? Can it provide standardised statutory reporting such as Form 5s and geospatial analytical reporting? Does it have the depth of functionality to handle construction, production reporting, large scale purchasing, asset management and plant maintenance? If you are in the mining services industry, will the system support equipment monitoring, maintenance and maximisation? 6. Get a good business engine Never forget that underneath all the mining functionality, you still need a business engine, one that can handle the myriad financial and management needs of the organisation including inventory, purchase orders, payroll, human resources, occupational health and safety, job cost and financial management. Above all, choose your vendor wisely. Always important, this is now essential as no one can afford to take risks with partners who may not deliver. Before any software purchase or change, check out your potential partner’s reputation for support. Seek references and ask their mining industry users: Given your time over, would you still purchase from this vendor?

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NEWS

THE LATEST MINING NEWS AND SAFETY AUSTRALIAN MINING PRESENTS THE LATEST NEWS AND SAFETY AFFECTING YOU FROM THE BOARDROOM TO THE MINE AND EVERYWHERE IN BETWEEN. VISIT WWW.MININGAUSTRALIA.COM.AU TO KEEP UP TO DATE WITH WHAT IS HAPPENING. INVESTIGATION INTO PILBARA PORT INJURIES BEGINS The Australian maritime Safety Authority will investigate an incident which injured two men at the Roy Hill Port construction project last month. The incident occurred on the Netherlands ship Happy Buccaneer, which left one man in a serious condition with a crushed foot, and the other with a broken leg. The ship was moored at Stanley Port at the Roy Hill South West Wharf. The Pilbara Port Authority said the accident did not affect port operations. A spokeswoman for Roy Hill said the company responded immediately to the emergency. “Roy Hill is a major operator in Port Hedland and has a highly capable emergency response and medical team based in Port Hedland,” she said. “We received a request for assistance and our team immediately responded to the incident, providing medical treatment to the injured people before they were transported to Port Hedland hospital for treatment. “Our thoughts are with the injured people, their families and work colleagues.”

LOW IRON ORE PRICE NOT OUR FAULT: BHP BILLITON BHP Billiton chief Andrew Mackenzie said calls to reduce iron ore production in the light of falling prices would only work to harm the Australian economy. Mackenzie blasted recent suggestions that the company had employed a flawed strategy in its ramp up of iron ore production. BHP has spent around $32 billion in the past ten years more than doubling its production out of the Pilbara. By 2017 the miner’s annual iron ore output will increase to 275 million tonnes. But with price of iron ore dropping by close to 50 per cent last year, the company has come under attack from West Australian Premier Colin Barnett over how it runs its business. Last year Barnett slammed both BHP

and Rio Tinto for plans to increase production. “This seeming strategy of the two major producers to flood the market (with supply) and force the price down, I mean, remember who your landlord is - that’s hurting Western Australia,” Barnett said. “I will just make the point, you can have your corporate strategy, but there’s also a sense of corporate social responsibility.” Fortescue Metals Group CEO Nev Power also recently pointed the finger at BHP for flooding the market. “As we know in the iron ore business there has been plenty of talk about what projects will come on but they have been delayed and not come on as forecast, but this apprehension of excess supply is influencing the price,” Power said. But Mackenzie is unapologetic, stating supply from a reliable miner like BHP created strong economic growth.

LARGEST COAL MINE IN RUSSIA OPENS A new 167 year life coal mine has opened in Russia. The new Arshanovsky open cut mine, in south eastern Siberia, has set a goal of two billion tonnes of coal extracted over its mine life, at a rate of around 10 million tonnes per annum. One of Australia’s largest coal mines, Adani’s Carmichael mine, has an operational life of only 60 years. The Russian mine will be located in the Khakassia region of Siberia, with plans to construct additional rail infrastructure to support the operation. The opening comes as Russia also announces the construction of two new coal ports in Siberia, which gives the nation more access to Chinese, Japanese, and Korean coal markets.

WA MINERS ASSURED CERTAINTY FOR ROYALTIES REVIEW The review into mining royalties in Western Australia should be made public as soon as possible, according to mines minister Bill Marmion. AUSTRALIANMINING

The draft review will go before Premier Colin Barnett for discussion this week. Marmion “hinted” he would recommend a staggered start to any changes to royalties, given the impact of commodities price drops. “The review had a number of terms of reference, one of which was to take into account the condition of commodity prices at the time,” Marmion said. “That will obviously be a factor in the discussion we have later this week.” The WA government announced the review in May 2012, which was intended to justify changes to bring royalties up to 10 per cent of the value of resources. Terms of reference for the review were not launched until August 2013. In the last 12 months the gold spot price has dropped from US$1382 down to around US$1210 per ounce, with a US$15 drop since Tuesday night. Royalties for gold and nickel are currently 2.5 per cent, and 7.5 per cent for iron ore. Gold miners have lobbied against royalty hikes, saying that there are many small producers that could not afford additional expense on marginal profit ratios.

AUSTRALIAN MINING GETS THE LATEST NEWS EVERY DAY, PROVIDING MINING PROFESSIONALS WITH THE UP TO THE MINUTE INFORMATION ON SAFETY, NEWS AND TECHNOLOGY FOR THE AUSTRALIAN MINING AND RESOURCES INDUSTRY.

MINING DEALS AT LOWEST LEVEL IN A DECADE

ing package for Roy Hill iron ore project which was completed last year, are also set to continue in 2015.

Mergers and acquisitions in Australia’s mining sector have sunk to their lowest level in 10 years. A new report out by EY shows deal value in Australia was $US4.7 billion in 2014, down from $US5.5 billion in 2015. Deals for the year totalled 144, down from 178 in 2013 and at their lowest level since 2003, the report said. Worldwide, the story was not much better, with deal values falling to 10year lows of $44.6 billion. The results were somewhat surprising given the low commodity prices and distressed assets in the sector. It was widely thought 2014 would be fuelled by deal activity with private equity firms looking to gain market share. EY’s head of mining and metals Paul Murphy said that ongoing volatility and uncertainty would continue to keep investors at bay until price stability returned confidence. Murphy said the current sector focus on return on capital employed lends itself to short-term decision making, some of which has successfully instilled much needed discipline across the industry. However he said “standing still is not an option for the sector,” and expects 2015 to be a turning point for the return of private capital in mining. Innovative financing structures, shown to be successful by the US$7.2b fund-

WORKER DIES AT DAWSON COAL MINE

MARCH 2015

A coal miner has been killed and another man seriously injured after a tyre exploded at Anglo American’s Dawson coal mine. The incident occurred last month at about 5:30 am local time. It is understood that a second man was injured in the incident, reportedly suffering a shoulder injury, and has been taken to Theodore Hospital for treatment. Operations at the site are contracted to Leighton Holdings. Anglo American confirmed the incident, adding that all operations at the site have been suspended. It went on to state that emergency services were immediately notified, with the Queensland Mines Inspectorate already on their way to the site. “At this point in time our focus will be on ensuring the safety of all people at the mine site while the incident is being managed; Anglo American’s employee assistance program has also been made available to provide support and counselling to employees as required,” it said in a company statement. This incident is the second time a worker has been killed by an exploding tyre at an Anglo American coal mine.

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ONE ON ONE

ASKING THE EXPERTS: BRYAN QUINN AUSTRALIAN MINING SPEAKS TO BHP’S GROUP HEAD TECHNOLOGY, GEOSCIENCE, AND ENGINEERING BRYAN QUINN ABOUT THE MINER’S FIVE STREAM FOCUS.

nnovation. Adding value. Reducing exposure. Mining smarter. These are the bywords BHP is operating to in the new era of mining, according to the miner’s group head technology, geoscience, and engineering Bryan Quinn. Speaking at the recent BHP Science and Engineering awards, Quinn outlined BHP’s new approach to innovation, automation, and technology integration, and how the now trimmer company is seeking to become a greener, more efficient company in this age of tighter production costs. “We’re looking beyond production, and how to build our future, the acceleration of our resources, and more efficiency in operations,” Quinn said. It is little surprise the miner is looking towards the future, beyond how it once did things and towards a new mode of thinking. Following the splitting of its assets last year, and the shifting of these divested operations into the newly named South32, BHP has refocused on maximising efficiency in its iron ore, coal, copper, and petroleum, and how innovative technology is aiding these applications. “We’re refocusing on what will generate the most value; and where there is the biggest bang for our buck,” he said, pointing to applications at its jointowned Jimblebar iron ore operations and BHP’s new downhole tools. “We’re thinking now, for future operations.”

However, in line with the current global slowdown in actual exploration BHP is unlikely to carry out wide ranging exploration on the ground, Quinn explaining that instead the miner is looking to “a more efficient use of [existing] drillers and geologists, and using data better.” By understanding its deposits in a deeper manner and using more intuitive technology “we can give our geos more time to carry out analysis on site, cutting lab times and giving us more time to access the data”. “Additionally it also reduces the levels of exposure of people in the field,” he said. “We’re working with technology to help us find and define our current resources, and get a better understanding. “At the moment we aren’t focused on [new resource] discovery, we’re more focused on the developing downstream products at this time. “It’s about making these tangible benefits from sophisticated decisions. If you plan well you can execute it well.”

A FIVE STREAM FOCUS

In terms of actual focus areas for technological development Quinn was reticent to specifically outline strategy, however he did state that BHP is increasing its focus on maximising the value in its orebodies, increased vehicle efficiency, and the throughput stream from blasting through to processing. These are underlined by the company “using automation where it makes sense”.

“It often depends on the site itself, as it doesn’t always make sense to implement automation, so we’ll only use it where it can improve business opportunities.”

TRICKLE DOWN INNOVATION

When it comes to developing this knowledge, and using it as a decision making driver BHP is using a ‘suck-itand-see’ principle. “We’ve set up a structure in the organisation where we may not have [a lot of] people working on the development of new technologies, instead we have focused areas and parts of the business where we can uncover technology being researched and bring these people into our organisation via partnerships,” he said. “We’re working on how to work with academies and institutions to focus on these opportunities.” However Quinn was quick to add: “Where technology or an innovation makes

BHP’S BRYAN QUINN

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MARCH 2015

BHP IS FOCUSED ON BUILDING SKILLS INTERNALLY

value and doesn’t exist then we will invent it, but if it exists then we’ll buy it.” But Quinn said BHP is not on a technology acquisition spree. “Then we get to the next stage, and if a pilot trial is being done and it fits within our focus area we then ask – does it move the dial? That’s one of the major questions.” When it comes to innovation integration he said the miner will look to “leverage best practice across the company, business by business, learning from other parts of the business and then deliberately spreading that knowledge in a holistic manner”. “It’s about building capability, and working with the wider business to build this capability using technology, and then sharing this experience to further the business.” AM

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PILBARA SPOTLIGHT

RIO TINTO IN NEED OF A SHAVE AS IRON ORE PRICES BITE, RIO TINTO IS TAKING THE KNIFE TO ITS OPERATIONS

io Tinto’s iron ore business is in the process of a heavy cost cutting campaign, involving renegotiation of service contracts, reduction of scheduled maintenance task times, and changes to staff pay which will “reflect market conditions”. An internal document leaked to Australian Mining last month showed Rio Tinto iron ore chief executive Andrew Harding had outlined a series of cost cutting requirements, including an immediate hiring freeze, which he said must be performed to maintain business success. The document was distributed by email to members of management, and was read aloud to workers on all Rio Tinto iron ore sites in Western Australia. The areas said to require urgent attention include: • Cost-outs and capital reductions that are significantly below the existing plan; • The renegotiation of significant service and supply contracts; • Reflecting market conditions for employees and labour related costs;

• The extension of an immediate hiring freeze and review of organisational structures; • Revamping of the way we schedule maintenance – by intervals and task times; • A significant reduction in warehouse and stockpile inventories. Harding stressed that “the whole business will be called to contribute to this work, with a degree of urgency”. The document also said that all site superintendents will be subject to quarterly reviews, which would help to identify “pinch points” in the business. “These will cover safety, cost and productivity performance, as well as commitments for the forthcoming quarter,” Harding said. “I do not intend that any of these actions, and the extra efforts required on safety, will compromise our objective of continuing to be the best iron ore company in the world. “Indeed, I expect that they will actually ensure that we can continue to be ‘the best’.” Harding said the agenda was a large one, but “not unmanageable”. At the time of the internal doc-

ument release there were widespread rumours among staff on Rio Tinto sites around Western Australia which suggested plans to cut the Australian iron ore workforce by 10 to 15 per cent, however Rio Tinto said these claims were incorrect. Australian Mining contacted Rio Tinto to discuss the details of the documented adjustments, however a spokesperson for the miner said no further details could be disclosed. So far Rio Tinto has only been prepared to make the following statement: “We remain focused on maintaining our market competitiveness in very challenging industry conditions. For some

RIO IS RE-EXAMINING ITS SERVICE CONTRACTS

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MARCH 2015

time now our people have been pursuing cost and productivity improvements. We are constantly examining all parts of our business in order to remain strong and globally competitive.” Despite Rio Tinto’s unwillingness to comment on their efforts to cut business costs, it’s become apparent that the company have begun to undertake micro-level adjustments to shave off every last dollar possible. Shortly after Australian Mining’s initial report about the cuts, editorial staff received an email from Rio Tinto’s Hope Downs sites 1 and 4 stating that they would be cancelling their paid subscriptions to trade publications, a move made “in the effort to find cost savings”. Australian Mining understands that coffee machines had been removed from the Operations Centre in Perth, and fruit deliveries cancelled, indicating the seriousness of Rio Tinto’s focus on managerial staff. Workers at Tom Price and Paraburdoo sites say there have been around 40 contractors cut from various roles employed by labour hire firms Skilled and DT Workforce, with many more expected, however consultant manager Dave Hinton from DT Workforce says these claims are nothing unusual. “People are finished up for various reasons, performance, safety violations, and there are budgetary concerns as well. “We have a vast workforce out there and I can’t see any reason for that changing. “There are a lot of local people who work as support staff,

RIO IS FOCUSING ON ‘MARKET COMPETITVENESS’

and I’d suggest that some of the cuts are much like that. “Cost cutting is a natural progression for businesses that are under pressure, and everybody’s under pressure.” Hinton said that although people were concerned about their jobs, he didn’t view any recent cuts as being part of an unusual trend. “As far as production and maintenance is concerned, which is our bread and butter, the show will go on: There’s a lot of investment which has gone into producing 360 million tonnes per annum.” After Rio Tinto’s massive production upscaling over the past few years, it would seem a bad move on the companies part to cut out production staff. So while the production workforce may appear safe, it would seem from Harding’s statement that employees from the level of superintendents and upwards are not safe, with quarterly performance reviews leading to high-paying job cuts from management expected to come. In the meantime, Rio Tinto announced in their full year report that underlying earnings were down nine per cent on 2013, and that the company would continue the buyback of US $500 million worth of shares as part of their US$2 billion capital return program, with shareholders invited to tender at discounts of between 8 and 14 per cent to the market. AM

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PILBARA SPOTLIGHT

PILBARA PRICE PAIN ACCUSATIONS AND BLAME ARE BEING FLUNG AROUND THE PILBARA AS THE IRON ORE PRICE CONTINUES ITS FALL.

s miners bottom lines are being attacked by the iron ore price crash, the battle in the west has heated up as to who is to blame for the price pain. Once upon a time the price of iron ore sat at a sexy $187 a tonne, and Pilbara miners were rapidly ramping up production in order to cash in. This was a magical time when margins were high, construction of the next money-maker was fast-tracked, and workers from the east headed west in the hope of fame and glory. The era was known as The Boom, and was built on China’s expanding industrialisation program that saw annual economic growth at around 9 per cent – meaning they needed a whole lot of iron ore to help build buildings, bridges, railway systems, and infrastructure. But fast -orward four years, and the story now is a very different one.

As Chinese growth slows, iron ore is trading at around $63 per tonne, a massive 66 per cent decrease since it reached its dizzying heights in 2011. Unsurprisingly, this has led high-cost miners who entered when the market was up, to shut their operations. It also means a raft of job cuts, a halt to new projects, and a hit to the bottom line of iron ore miners – especially the ones who are invested in the steel-making commodity as their number one money-maker. Last month, Fortescue Metals Group posted a first half profit fall 81 per cent year on year. The miner recorded a firsthalf profit of $US331 million, down from the $US1.7 billion it posted a year ago. It comes as FMG’s realised price during the half year was $US66 a tonne compared to $US124 and despite the fact it increased shipping by 53 per cent to 82.7Mt. With results far from amaz-

RIO AND BHP ARE ACCUSED OF FLOODING THE MARKET

ing, Fortescue CEO Nev Power was quick to point the finger at Rio Tinto and BHP as the culprits behind iron ore’s plummeting price, as the two continue to expand their Pilbara iron ore operations in the face of falling prices. Rio Tinto will be producing 360 million tonnes of iron ore a year by the middle of 2015, meanwhile, BHP has said it plans to add 65 million tonnes to its operations. This would increase annual output to 275 million tonnes per annum by the 2017. Power said plans to continuing flooding the market has contributed to a softening Australian economy and that the strategy being employed by the miners was affecting the iron ore market. “As we know in the iron ore business there has been plenty of talk about what projects will come on but they have been delayed and not come on as forecast, but this apprehension of excess supply is influencing the price,” Power said. This is not the first time Rio and BHP have been accused of flooding the market in an effort to drive out smaller operators. Glencore chief Ivan Glasenberg stated that blame for the iron ore price fall should land squarely on the shoulders of major miners who have undertaken expansion projects. “Prices are coming off because we see massive expansions coming there from our major competitors,” Glasenberg said. While late last year West Australian Colin Barnett directly AUSTRALIANMINING

MARCH 2015

accused BHP and Rio of “working in a concert way”. “This seeming strategy of the two major producers to flood the market (with supply) and force the price down, I mean, remember who your landlord is – that’s hurting Western Australia,” Barnett said. “I will just make the point, you can have your corporate strategy, but there’s also a sense of corporate social responsibility. “And while you are pursuing your business strategy – which I tend to think is flawed – you are actually hurting the host State, the State that provides the iron ore and generates most of the wealth of Rio Tinto and BHP at a world scale.” However he backed down from accusations of actual collusion. Speaking to Grant Thornton partner – audit & assurance, Brock Mackenzie, he told Australian Mining that current conditions had created a perfect storm for the metal, as there are high levels of supply expected to come online from larger producers combined with a slowing growth in China. While the group said iron ore price volatility is not uncommon, the difference this time is the oversupply flooding the market. According to Anglo American, this global glut of iron ore, will keep prices at these five year lows for a minimum 12 months. New research from analyst firm Morningstar has forecast the metal to reach its lowest point in 2017, falling to US$70 per tonne before recovering to a

THE PILBARA IS STILL SEEING EXPANSIONS

more stable US$75 per tonne by 2020, due to Chinese iron ore miners slowing output and the righting of prices as more stock floods the market. Mackenzie explained there are “a lot of issues likely to be ahead on the supply side, with it more than likely that larger producers will also use the situation to gain more market share and edge out the smaller producers, so we are likely to see these larger producers use this aggressive pricing environment as an opportunity to push more marginal operations out, so that smaller producers fall by the wayside”. “Only the big suppliers with world-class assets, scale of production, efficiency, and good costs will be able to survive,” Vale global director of ferrous marketing and sales, Claudio Alves, stated, as his company received the greenlight to begin exporting to China using the enormous Valemax iron ore transport ships, and announced an intent to double exports to the nation. Power said it is strategies like this that will ultimately flood the market with more ore and lead to more pain for a sector already under immense pressure. “All companies have their options and own strategic decisions to make but the iron ore price going down has drained a lot of cash out of all of the industry, irrespective of what their cost structure is.” AM

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DRILL, BLAST & GEOMECHANICS

RAISING THE STANDARD NEW, LARGER MACHINES ARE TAKING THE DIFFICULTY OUT OF DRILLING IN UNDERGROUND OPERATIONS.

s commodity prices rise, and operators look to more efficient processes, the question is being asked whether it is more productive to run a large fleet, or one massive machine. The debate between using a multi-machine approach or employing a single machine able to do the job of many has been a constant one in the mining industry. For instance, does a miner using one massive crusher on site, which takes up less space than three of four smaller crushers and potentially processes more throughput while requiring fewer stockpiles of equipment to keep it running, or go for the multiple machine option which allows for more scheduled downtimes and repairs of equipment without completely removing site capacity? As miners are looking to get more product through more efficiently, more at turning towards the benefits offered by larger, single machine set-ups. In terms of drilling and raisebore operations, Pybar has brought new capability to the Australian mining industry after acquiring one of the most powerful raisebore rigs available globally – the Herrenknecht RBR600-VF. The machine will be used in shaft construction operations. According to Pybar the majority of raisebore rigs in Australia have a maximum diameter of around six metres or less; however the RBR600-VF has the capacity to construct shafts ranging in diameter from 2.4 metres to 8 metres

up to 1000 metres in length, making it one of only two in Australia with shaft diameters of more than six metres. Unsurprisingly, drilling shafts of up to a kilometre with large diameters requires rigs with high torque and high thrust forces. Currently the second largest in Australia, Pybar’s raisebore rig delivers a thrust force of 10,000kN, or sufficient capacity to lift a 1000 tonne weight un-

der the rig, with the RBR600-VF is designed for the construction of shafts in hard rock to depths of 1000 metres. The raisebore has a reaming torque of 550kN and a max static torque of 750kN, with inclination capabilities, from vertical of 0 to 45 degrees. It also more efficient than other rigs on the market due to its variable frequency drive, meaning whether it utilising mains power or generators its power

THE RIG HAS A THRUST FORCE OF 10,000KN

AUSTRALIANMINING

MARCH 2015

consumption will still be approximately half that of an equivalent capacity machine with a hydraulic drive. The rig has three motors, with installed power of 540kW. Added to this is its track-mounted mobile and compact design, allowing for more work within confined spaces and in turn slashing the level of investment needed in developing underground operations in regards to access roads and underground chambers. It has an extended height of 6.65 metres and a retracted height of 4.86 metres, with a depth of 2.3 metres and width of 2.39 metres. As the industry increasingly looks to non-entry mining solutions, the rig allows for the reaming of shafts in a less labour intensive, safer manner, whilst also being more cost effective than conventional shaft sinking. It can also be used to create shafts for ventilation, access, haulage, and pressure shafts for hydropower plants. Safety has also been a design feature, with a mechanised drill rod handling and wrench system installed for safe and easy handling. Speaking on the rig acquisition, Pybar CEO Paul Rouse said it has made the contractor a significant player in the underground mining space. “There are very few contractors with this level of rig capability; it provides us with the capability to service the largest underground mining projects in Australia,” he said. The rigs will arrive in March. AM

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AM0315_018

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DRILL, BLAST & GEOMECHANICS

A SENSE IN DRILLING NEW AGREEMENTS SEE THE DEVELOPMENT OF IN-HOLE TECHNOLOGY.

Logging results are now deoart Longyear has signed a commer- livered to the explorer as soon cialisation agree- as the drill hole is completed. Commenting on the agreement, ment with the Deep Exploration DET CRC CEO professor RichTechnologies Co- ard Hillis said the AutoSonde operative Research Centre (DET commercialisation with Boart CRC) for its in-hole sensor tech- Longyear is a major milestone in the CRC’s history, and will nology AutoSonde. The technology has been de- act as a precursor for other techveloped by DET CRC partic- nology being developed. “The AutoSonde agreement ipants Globaltech Corporation and Curtin University, and pro- is the first of our three key pilvides geophysical logging infor- lar technologies to be commermation similar to that recorded cialised, with the other two by conventional wireline logging, key pillar technologies – the “but with significant reduction Coiled Tubing (CT) Drill Rig with the data to be uploaded in costs, inconvenience and risks and Lab-at-Rig top of the hole to the internet for real-time reinvolved,” the DET CRC said. sending – in development and mote access, helping explorers AutoSonde works by being low- showing enormous promise,” make better drilling decisions and, in due course, replace time ered inside drill rods to the bot- Hillis said. The Coiled Tubing rig was consuming and expensive lab tom of the hole upon completion of drilling, after which the hole is launched in late 2013, and uses based assays of drilling samples. Hillis added that its new techgeophysically logged as the rods a continuous reel of tubing that are being pulled out of the hole, eliminates the manual handling nology – AutoSonde – “enables completely removing the needs of drill rods, directly address- the collection of geophysical data for an entirely separate conven- ing many of the hand injury while a hole is being drilled intional wireline logging crew or ad- issues that arise during manu- stead of the current method of ditional rig time to log the hole. al handling, while at the same having a specialist crew carry It also removes much of the time maximising the amount out the process once the drill rig risk of hole collapse prior to or of time the bit is at the bot- has left, which previously added significant time, costs and tom of the hole. during logging. The Lab-at-Rig analytical risks to the process”. The technology can also be “The recorded data is available combined with a survey tool so system, which was developed that geophysical information can with Imdex and Olympus, pro- within minutes of drilling and be recovered at the same time vides geochemical and miner- can be sent around the world for immediate as A routine M 0 3 hole 1 5 _orientation 0 0 0 _ SisE I alogical 1information 2 0 1 5 on - 0drilling 2 - 0 9 T 1 5 : 3 0analysis; : 5 5 +this 1 1repre: 0 0 samples as they are recovered sents a step change in the quality carried out.

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and amount of data the minerals industry can now capture.” The agreement with Boart Longyear is for a total count gamma sensor, with additional sensors such as magnetic susceptibility, induction, and spectral gamma still in development and to be offered separately for commercialisation. The gamma sensor itself measures naturally occurring gamma radiation which is commonly used in mineral exploration to characterise different types of rock and alteration related to mineral deposits. Boart Longyear products senior vice president Kent Hoots said the agreement is a key strategic decision for the company, and aids its expansion of its in-

REMOVES THE NEED FOR WIRELINE LOGGING

hole instrumentation product offering. “The primary focus for the introduction of this technology will be mineral exploration, initially with diamond coring, but there will be additional opportunities for the introduction of the tool in reverse circulation and mud rotary drilling,” Hoots said. “The AutoSonde is an enormous step forward as a combined survey and gamma tool providing geophysical information at a lower cost than a traditional geophysical survey.” The tool is slated for release later this year. AM

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DRILL, BLAST & GEOMECHANICS

HAMMERING PRODUCTIVITY NEW DRILLING COMPONENTS ARE DECREASING DTH FAILURE RATES.

Following the field trials, which bond technology could exceed aserbond hadsseen positive results from compared the new DTH ham- the performance reported durits Down-the-Hole mer and associated technology ing this trial in other production hammer and drilling with other existing commercial environments and applications.” Laserbond added that it is alternatives, independent supercomponent trials. According to the visor Xtega said: “The results now focusing on increasing this company, independently super- of the trial conclude that there average lifespan to around 2.85 vised field trials of its new class is a decrease in the rate of abra- times that of other equipment. Xtega also investigated the of hammers “demonstrated a ma- sive wear.” The study found an average likely impact on operating costs jor life extension of these high wear components, resulting in of 3514 metres were drilled with for the equipment. It found “in these mine consubstantial reduction in over- industry standard hammers before failure occurred, whereas ditions the average extended all drilling costs”. Last year the company com- the ones incorporating Laser- DTH hammer life yielded a pleted patented applications for bond technology drilled more 7 per cent saving to the total its new laser processing method- than double this before seeing drilling costs”. Laserbond went on to state ology, allowing for innovations failures occur – with an averthat it is now signing a number in product development, with age of 8578 metres achieved. “Laserbond technology had an of drilling operator test partners the first being the DTH hammer for mining and exploration. average life approximately 2.44 in Australia to trial the equipLaserbond stated that “the times greater than the stand- ment on a wider sample of ‘aggressive’ ground conditions. new DTH hammer design over- ard components,” Xtega said. The trials should be complet“Give that the trial environcomes premature failures due to high wear rates in hard, highly ment provided drilling condi- ed within three months, after abrasive ground conditions typ- tions which would be considered which the company will look to1release ically A Mfound 0 3 1 in 5 drill _ 0 0and 0 _blast L O A to -be particularly 1 2 0 1 abrasive, 5 - 0 2 it - is 1 6 T 5 : 0 0a :limited 4 1 + 1product 1 : 0 0 quite possible that the Laser- range. AM mining operations”.

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AM0315_020

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DRILL, BLAST & GEOMECHANICS

SAFETY IN THE WET A UNIQUE SET OF PROBLEMS CAUSED BY A MASSIVE MINE CREATED A UNIQUE BLASTING SOLUTION.

he size, scale, and remoteness of the massive Roy Hill iron ore mine has created a raft of hurdles in developing the operation. The $10 billion project requires mine, rail, and port infrastructure, with such a ramp up that construction already sits at 60 per cent, as it seeks to hit its massive 55 million tonnes per annum production rate. However these hurdles and high targets have seen contractors and workers on site approach these issues in unique and innovative ways. One contractor, Action Drill and Blast (ADB), has been carrying out drill and blast work at the site, and used an innovative hybrid explosive technology to overcome the project’s challenging ground and logistical conditions. In December 2013, ADB was awarded the contract for drill and blast works covering over 170 kilometres of rail cuttings (which increased to 220km during the course of the contract) for the Roy Hill rail track by mining and civil contractor, NRW. NRW is sub-contracted to Roy Hill’s EPC Samsung C&T for the Roy Hill rail earthworks, whilst ADB is a wholly owned subsidiary of NRW Holdings. The ADB project itself required a team of 65 personnel operating eight drill rigs – a mix of Atlas Copco F9C and D65 drills to drill and blast approximately 2.4 million cubic metres (bcm) of

insitu rock for a large portion of the 344 kilometre long rail track which is being constructed from the mine site, located north of Newman, to Port Hedland. However it was not completely straightforward, with ADB encountering several operational challenges on site, including very wet ground conditions: heavy rainfall resulted in significant levels of ground water and closed parts of the site for length periods; logistical challenges: poor roads and the wide spread nature of the site made equipment and personnel mobilisation time consuming and negated off-site explosive storage as an option; and communications challenges: the lack of radio and phone coverage due to the remote location meant special systems were needed to manage interactions between staff and other mine infrastructure owners. To overcome these wide ranging issues, ADB used ‘hybrid’ explosive technology WALA during the process. “The company highlighted the cost

benefits of its in-house supply capability, the ability to store the product onsite, and its suitability for use in both wet and dry ground conditions and the availability of variable density bulk explosive product,” ADB stated. “These advantages proved even more critical to project delivery given the quantity of water encountered – far more than has been historically seen on these types of projects – and the logistical challenges.” Most projects use ANFO explosive mixes as they are cost effective and relatively easy to store. However it has major downsides, because unlike WALA it is not suitable for use in wet ground as water mixed with ANFO creates toxic nitrogen dioxide gas. “WALA is a new generation of bulk explosives. Unlike the conventional emulsion and watergel bulk explosives, WALA employs a cutting edge technology called NanoBlok. This enables WALA to achieve very light densities – as low as 0.7 grams per centimetre cubed (g/cc) –

BLASTERS CAN DRILL FEWER HOLES WITH WIDER PATTERSN USING WALA

AUSTRALIANMINING

MARCH 2015

ROY HILL’S SCALE CREATED NEW ISSUES FOR BLASTERS

while maintaining water resistance and initiation sensitivity,” ADB explained. The mix also has more effective energy strength, and is considered a quadruple salt bulk explosive. The single salt ANE formulation ADB used to compare the WALA to ANE is the standard formulation used by some of the ANE suppliers in WA. Some of these suppliers have a water content of up to 22 per cent. The WALA formulation which was used for the trial in a Queensland mining operation and at Roy Hill Rail Project has a water content of 10.22 per cent. The combination of high VOD (the speed it detonates at), greater sensitivity at lower densities in smaller diameter holes and high detonation temperature/ pressure creates unique characteristics in blasting performance. Its NanoBlok characteristics also enable WALA to tolerate a longer sleeping period in the presence of water and to soft ground conditions without producing post blast fuming. Smaller holes and wider patterns were used on WALA patterns comparing to ANFO.This meant drilling fewer holes in hard wet ground and was a huge cost saving measure on the project. Where ANFO can only be augered/ poured into blast holes WALA was pumped at low densities through small diameter hoses on tight patterns, uneven ground, split benches and difficult to reach blast holes that ANFO would have been manually handled in buckets to the blast holes. WALA can also be pumped as far as 60m away from the MPU. ADB design engineers estimated WALA’s bulk effective energy strength to be at least 15 per cent higher than comparable emulsion bulk products. AM

AM0315_000_ESS

2015-02-17T10:48:22+11:00

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AM0315_022

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2015 MINING TRENDS

TRACKING THE TRENDS: THE TOP 10 TRENDS THAT WILL AFFECT MINING IN 2015 – PART 1 AUSTRALIAN MINING AND DELOITTE EXAMINE THE FIRST FIVE OF TEN TRENDS THAT WILL BE AFFECTING MINERS AND THE INDUSTRY IN 2015.

eloitte have released a list of the top ten industry trends we can expect in 2015. With a number of challenges faced by the sector this year, it’s important to stay a few steps ahead and pay attention to the indicators. As we all know, the mining industry is cyclical in nature, and despite the ongoing commodities downturn after the mining boom, the upswing is on its way, It’s simply a matter of when we will start to see this resurgence. Australian Mining takes a look at each of these ten tips from

Deloitte to see what’s in store through this ebbing year in the mining cycle.

PRODUCTIVITY

The Number One, hit-with-abullet tip from Deloitte in 2015 is the trend towards increased productivity. It’s been the main buzzword of the mining industry since “boom” took a dive, and for good reason. Australia’s productivity has been on the nose for some years because of complacency caused by sky-high commodity prices. Globally, productivity fell 20 per cent in the resources industries, according to Pricewater-

houseCoopers in their ‘Mining for Efficiency’ report. Australia’s productivity rating slumped from a peak of 104 points in 2007 down to a miserable 88 points in 2013, with mining equipment outputs running lower than North America in all classes. During the boom junior miners took advantage of easy entry to the industry, the major players executed plans to increase their production to staggering volumes (exports from Port Hedland are up 30 per cent in the last year alone), but failed to pay closer attention to interrelated processes to increase proAUSTRALIANMINING

MARCH 2015

ductivity itself on the ground. Now we’re seeing an industry environment in which junior iron ore miners are starting to drop like Asian airliners because of unsustainable production costs, and the majors are not seeing the returns that were expected out of the billions of dollars worth of processing infrastructure investment. Even Fortescue Metals Group have had to work to cut their cash costs in order to deal with the floundering price of iron ore, which has plunged to lows not seen since the financial crisis (at time of writing around US$62 per tonne).

Confidence in industry growth has been running at an all-time low, with 93 per cent of mining leaders around the world pessimistic about their prospects for growth, according to Newport Consulting’s 2014 Mining Business Outlook. Companies accept they cannot rely on a commodity price rally, so sustainable productivity improvements are the only way to squeeze more out of operating costs. The major miners have already gone through a major cost cutting phase: Glencore briefly tried closing coal mines in NSW, and there have been na-

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2015 MINING TRENDS

tionwide staff redundancies, especially in Queensland coal. BHP simplified its portfolio by demerging all assets apart from iron ore, copper, coal and petroleum, spinning off non-core assets such as aluminium, bauxite and nickel. The last one hasn’t gone so well however, as attempts to sell off Nickel West were in vain. Rio Tinto also divested underperforming coal assets to pare back the business. So the key now is to enhance the ways in which we produce commodities. The key to increasing productivity lies in innovation, Deloitte consulting mining leader Julian Dolby says. “Although miners are working to control expenses, declining grades will put continual pressure on costs,” he said. “To regain momentum, and lay a strong foundation for the next mining cycle, companies need to accelerate their efficiency programs and invest more in innovation.” The advice from PwC in their global productivity assessment ‘Mining for Efficiency’ recommended companies focus on three key factors for mining productivity execution. These are mine strategy, data management, and people. By recognising the complex inter-relationships within and between these factors, productivity on the ground can be improved, not only by applying pressure on management and workforces to shave off the seconds, but by embracing innovative technological developments which can make use of micromanaged data in the most economic way. Of course, mine managers AM 0 9 1been 4 _ 0 0 kind 0 _ QofU I have never the people to ignore innovative ways

to speed production, but the complacency and focus on quantity over quality of production which has plagued the beginning of this decade is a luxury we can no longer afford.

ity (shaving off the seconds to scale up the tonnes), or straight up technological improvements. Remote mining, driverless trucks and other forms of automation are not imaginings of the future any more, and while their development will require INNOVATION Although we already touched a great deal more innovation, on innovation in terms of pro- there is much more to innovaductivity, that is certainly not tion than research and development around processes and the end of the story. Deloitte predicts innovation technologies. Reduction of capital intensity will be one of the biggest driving forces in the mining industry is the most common means of in 2015, but it needs to happen improving business, and we’ve seen this in the mass restrucin, well, innovative ways. The traditional forms of inno- turing of 2014, with divestment vation, the ones that would imme- of assets, mine closures, and rediately spring to mind, generally staffing on lower wages, but what - to1cost2controls, 0 1 4 -incremen0 8 - 1 4 T 1 0 the : 3 reduction 1 : 3 2 +of1 people 0 : 0 0 about relate tal improvements to productiv- intensity, or energy intensity?

AUSTRALIANMINING

MARCH 2015

There is always further to go in reducing the necessary manpower, in streamlining work processes in the pit or underground, and automating. The reduction of energy intensity certainly requires a great deal more development to help reduce both cost and carbon footprint of operations. Looking at new forms of incorporating renewables into remote power generation is an area which will be especially important in Australia for reducing power costs in processing and accommodation by utilising increasingly reliable hybrid systems. But innovation is required in all facets of business, and the only limits are our collective imagination.

INNOVATION IN IRON ORE HAS BEEN A MAJOR FOCUS

Deloitte remarks upon innovative approaches to leveraging supplier knowledge, redefining participation in the energy value chain, and finding new ways to engage in partnerships with stakeholders that can be beneficial and even profitable. In short, Deloitte thinks mining companies need to overcome its traditional tendencies to conservatism. ‘If it ain’t broke…’ is not an acceptable policy, it presents no way forward. Conventional means of innovation must reContinued page 24

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2015 MINING TRENDS

From page 23 main in play, but they can’t be the sole content of the mining trick bag. One example given is that miners sometimes struggle to adopt technologies which have been made to work at other operations, and in such a case management need to understand that it may not necessarily be a technology problem, but rather an adoption problem which requires some rethinking and restructuring. Cloud technology, minute to second monitoring of microdata, with the means to micromanage remotely; This is just one example of the kind of innovation that needs industry uptake in order to develop new ways of using the technology. We already have a few companies in Australia who are concentrating on this new cloud based infotech market. At a recent meeting in Sydney about new developments in disruptive cloud technology, Kim Benito, Vice President of business management systems company Zuora, talked to Australian Mining about the new subscription based economy. Benito referred to brainstorming going on at several major OEMs in the US, who she said have seen and acted on the benefits of a subscrip-

tion based model in heavy machinery hire operated with the flexibility that cloud software portals can afford. Rather than customers buying their own machines from distributors and paying for servicing, miners could simply rent machines under a system where they pay per tonne of earth moved, which would be monitored real time in the cloud, not only to ensure there were no unnecessary charges, but to ensure fast connection and flexibility in terms of last minute changes and fast emerging requirements. This kind of innovation can undoubtedly free up precious capital for junior to mid-tier miners to be used for other, hopefully more innovative, means of reinvestment. The same kind of real-time monitoring could be applied to labour hire in order to make costing of major construction projects more accurate, and increase long term feasibility through knowing exactly how much to pay the contractor per units of work performed, rather than relying on periodical inspections by the client and progress reports by the contractor. Cloud Awakening founder and CEO Chris Petersen also spoke with Australian Mining about the ways cloud information systems are ripe for new waves of innovation that could

completely change the in-house processing of data at the micro and macro levels of business. “Literally 100 per cent of the companies I’ve come into contact with in the mining industry, that I’ve personally dealt with, all use Excel for asset tracking, and they were working so hard and so fast with such limited overall budgets for personnel, that they grabbed whatever tools they could, often Excel,” Petersen said. “So they left themselves in an absolute pickle, not being

BIG DATA IS ALLOWING FOR GREATER INSIGHTS

AUSTRALIANMINING

MARCH 2015

able to scale their business and leaving it ripe for issues down the line: A company that’s investing hundreds of millions or more on construction, operation and maintenance of a mine all based on a spreadsheet that was built at a single point in time, I could never see that as a viable solution.” Petersen said Asset-Guru, the proprietary software run by Cloud Awakening, was built to allow companies to scale their business through live tracking of asset growth, which streamlines the data entry process by capturing once, rather than many times and requiring double handling information in the office. “People are stuck in the office rather than being on site, and mining really is all about what comes out of the ground, so having an iPad-ready application is a no-brainer when it comes to managing this information.” Cloud computing is one example of a technology waiting to be integrated with others to form the basis of new innovation, in anything from data management to haul truck loading. Take the Titan 3330 Production monitor, for example: A graphic interface in the excavator cabin shows the operator exactly how much material is in each scoop, measured to prevent under or overfilling of haul trucks. Sensors on the hydraulics of the excavator record every movement and weight, and using GPS logging maps can be built showing the density of materi-

INNOVATION IS DRIVING PRODUCTIVITY

al as it’s dug from the ground. With information sent live to the cloud, engineers on site or even in Perth can monitor progress and issue commands to alter the input of the vectors involved to achieve desired outcomes. But there are many more avenues of emerging technology just waiting for leverage: Cyber security, embedded logic, Big Data, modelling and 3D visualisation, nanomaterials, energy storage, renewable energy conversion, carbon capture and emissions reduction, superconductivity, non-detonating solutions… Even SMS and mobile phone technology is unbelievably underutilised, more often than not due to the reluctance to change policies on the ground, shutting off one avenue for practical innovations yet to be discovered. All of these sort are ideas born into the market and waiting for the right team to explore and integrate with other practices. And herein lies the real key, one which has always been the most important factor of innovation: People. In order to innovate, we need to have ideas, and in order to have ideas, we need good people with the right education, training, and chiefly intuition to conceive and visualise the breakthrough ideas that will take us ever closer to the 22nd century. These principles must be

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2015 MINING TRENDS

embedded into the company psyche, to foster the kind of consciousness and environment that allows for such creativity to thrive, but also to have the positive management systems in place to enable leaders to take on board the grass roots ideas had on the ground by workers, who might otherwise be ignored by superintendents with too much on their plate to worry about changing horses mid-stream. Live reporting at all levels can certainly assist the innovation and idea uptake process at the level of management, providing a more direct connection between the suits in Perth and the high-vizzed workers whose hands are on the levers every day. It’s about building and being part of an innovation ecosystem, Deloitte says, by polling talent, ideas and insights and having the means to develop and implement. Deloitte also presented the notion that mining companies need to abandon the traditional urge to test new systems to scale. Instead new ideas need proof of concept to be developed on a small scale, made to work and then rapidly scaled up, eliminating the risk involved with taking on board new tech. Above all, companies need to brace themselves for these new operational realities. Openmindedness and readiness to adapt and change must come

at the very start, because without that even the very best idea will never get off the ground.

POWER & ENERGY COSTS

Over the past decade, power consumption by the Australian mining industry has increased by 60 per cent. On top of that, the price of diesel continues to rise: For the time being oil prices are at a low, but for how long? Until now the prices have been climbing at a rate of 10 to 15 per cent each year. From the perspective of health and safety, diesel comes with a raft of hazards, from environmental risks associated with transport over long distances to remote locations. The World Health organisation has also declared diesel exhaust particulates to be carcinogenic. All of this means it is very likely there will be greater focus on trying to reduce the cost of power generation through alternative sources, and companies have looked towards renewables for new answers. A great many individuals still delight in attempting to cut down the virtues of renewable energy and the need to reduce man-made carbon emissions, but climate change has been recognised by the major miners and industry groups for several years. People have criticised the reliability, ability to generate

base-load power, and expensive capital costs of building infrastructure, but as renewable technology improves these arguments are steadily being disproven in the face of decreasing costs, and better, more reliable power generation. Capital costs have significantly decreased for renewable infrastructure, especially in the field of solar photovoltaic panels, which are now half the price they were ten years ago. Deloitte says despite the higher up-front capital costs of renewable infrastructure, the all-in cost of energy factors in lower operating costs and fixed energy

MINERS ARE TURNING TO ALTERNATIVE ENERGY

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MARCH 2015

prices, resulting in fuel saving anywhere from 10 to 40 per cent. Systems such as hybrid power generators, which combine renewable energy such as solar or wind with diesel power have become very attractive to miners in remote areas, where the problem of intermittent power is answered by a backup source: Systems like this are already being used with great success. Another benefit of adopting renewables is to enhance the environmental ethics of mining companies, winning their detractors over with responsible policies which provide for movement towards more diverse power sources. Barrick Gold have already built a wind farm in Chile, and Rio Tinto have built the same in Canada, while Codelco uses a solar plant in Chile. As companies come to adopt new technologies and adapt them to their site specific needs, the quality of power generation through innovative research and development will only strengthen the uptake of sustainable practices. The biggest swing we are already seeing is the move towards LNG power plants, and construction of pipelines to bring the gas directly to site. As part of the APA Goldfields gas pipeline expansion, construction of 293km of pipeline will begin in March 2015. The new pipeline will extend beyond Murrin Murrin’s lateral pipeline to Anglogold Ashanti’s Sunrise Dam and Tropicana gold mines, to be used to fire power generation facilities.

RISING FUEL COSTS ARE HITTING THE BOTTOM LINE

The power stations at both mines will be modified to run on 100 per cent natural gas, while retaining diesel back up capacity. FMG have also been planning major transitions to gas-fired power, readying for construction of the 270km Fortescue River gas pipeline which will deliver gas from the existing Dampier to Bunbury Natural Gas Pipeline to Fortescue Metals Group’s 125MW Solomon Hub power station, a project worth $178 million. All of this forms part of FMG wider strategy to cut energy costs and cut emissions across their operations. Deloitte have recommended companies consider a range of issues in determining the cost saving measures to be implemented for reducing project power expenditure. These include managing energy as a portfolio within the organisation, by tracking the micro-detail of demand. A detailed view enables identification of opportunities to use different fuels or systems. While wind and solar are well known (and much-maligned by those who have failed to keep up to date with emergent technologies), there are other renewable options such as biomass, hydroelectricity (limited capacity in Australia, but certainly has applications for Australian Continued page 26

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From page 25 companies abroad) and geothermal energy. LNG has also emerged as a viable and cheaper fuel than diesel, and can be used for power generation and all forms of mobile plant. Gas pipelines also preclude the need for long-distance road or rail transport of fuel. Another aspect of cost saving to consider is the kinds of investment available from the government, particularly through the Australian Renewable Energy Agency (ARENA), which assists with funding and development of power generation technologies in the private sector with a view to reducing carbon emissions. Leaving a smaller carbon footprint makes projects of all sizes more acceptable to community and special interest groups, and attracts the attention of key industry stakeholders and investors, especially given the recent trend for ethical ESG (environment, social, governance) divestment.

CONTROLLING SUPPLY

Miners are now walking the supply demand tightrope. Massive production upscaling in Australia of iron ore and coal during the boom has left some in a difficult position. Global surplus of commodities have driven prices down, and in the case of iron ore, it just keeps going down. The price

has halved since the same time last year, from around US$120 per tonne down to just above US$60 per tonne. This has been disastrous for several small miners, who have had to put mines into care and maintenance while they wait out the global slump in hope of more favourable times. Exploration too has suffered, with budgets being cut around the world, and some operators pulling out of greenfield development altogether. With the trend of downsizing and focusing on core business, the seemingly unnecessary expense of greenfield exploration is one seems easy to cut, but this will have impacts down the line. Deloitte suggests that due to the downturn in exploration, new project pipelines have already begun to dwindle, and this could put the future of supply at risk. While companies focus on production and cost cutting, there are fewer discoveries to feed supply in the future, and this may create a supply imbalance and tip the mining sector back into an unsustainable production cycle.

FINDING FINANCING

In the last great mining bust it wasn’t unusual to find more geologists working as taxi drivers than in the field. As more juniors fall in the face of disappearing finance the mining sector is finding itself facing the bottom of the mar-

ket as capital dries up and investors become more wary of the market. A major indicator of the dire position of the market is the number of small cap mining companies being used as a vehicle for backdoor listing. As of February there have been at least seven of these backdoor listings, where resource companies acquire technology plays to act as a shell company for new businesses in Australia. The same is happening in Canada, only with medical marijuana companies in place of technology. The major factor in these movements is the lack of capital. According to Deloitte CIS mining leader Nikolay Demidov: “The lack of capital available

TRADITIONAL EQUITY MARKETS ARE DRYING UP

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MARCH 2015

to juniors may force a dramatic industry collaboration.” “Some projects will need to be shelved, most developmentstage projects will be put on hold, and many distressed companies should consider ways to strike a merger of equals,” he said. According to IBISWorld, after the settling of the current uneven commodities market an era of consolidation will take hold, with more mergers and acquisitions as a result of these tight capital markets. One of these major merging of equals foreshadowed by Demidov is the much reported, and mooted, merger between Rio Tinto and Glencore. Speaking to Grant Thornton partner – audit & assurance, Brock Mackenzie, he explained there are “a lot of issues likely to be ahead on the supply side, with it more than likely that larger producers will also use the situation to gain more market share and edge out the smaller producers, so we are likely to see these larger producers use this aggressive pricing environment as an opportunity to push more marginal operations out, so that smaller producers fall by the wayside”. Junior miners have borne the brunt of investment reluctance to date, with nearly 200 Australian mining companies filing for bankruptcy between June 2013 and September 2014. While this is removing what some would see as deadwood, it leaves a gap in the market traditionally played by juniors – that of the aggressive, risky explorer. But even the majors cannot avoid the financial pain.

MINERS ARE WALKING THE SUPPLY/DEMAND TIGHTROPE

Global mining stocks are down approximately 43 per cent since 2010, with much of the fall in the iron ore space. This downward trend has made “equity investors leery of the sector,” according to Deloitte, and “as a result 2013 marked one of the worst years in history for new mining listings. Chinese investors have begun cooling off, while traditional investors are also becoming extremely selective in their capital financing, with Deloitte explaining that “the days of waiting to be noticed by a Chinese SOE are long over”, putting the onus back on the juniors to find investors. “The time is now ripe for miners to proactively woo investors who may have the wherewithal to help finance the industry’s growth by striking diplomatic missions and building relationships in less traditional locales across the Middle East and nonChinese Asia,” Deloitte said. As Vale’s Claudio Alves told Bloomberg: “Only the big suppliers with world-class assets, scale of production, efficiency, and good costs will be able to survive.” Unless mining companies move out of their typical capital markets and seek new alternative funding routes, looking more to foreign investors in new markets, pooling resources, offtake agreements or convertible debt structures, and approaching interested private equity players, the already small funding pool is likely to only dry up further. AM

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The latest safety information and innovations

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SAFETY FIRST

HEALTH CHALLENGES FACING UNDERGROUND HARD-ROCK MINING FORMER LONG SERVING HEAD OF WASM, PROFESSOR IFAN ODWYN JONES A.O., INVESTIGATES THE AFFECT OF DIESEL PARTICULATE INHALATION ON UNDERGROUND MINERS

air appear to be prone to substantial excess lifetime risks of lung cancer above the usually acceptable limits in the United States and Europe. If these general statements reflect a serious community challenge one wonders how much more serious is the challenge for those responsible for the health and welfare of miners employed in underground mines where diesel powered equipment predominate. Responsible management of workplaces, regardless of the industry, is a risk management exercise and whilst the total elimination of risk is unrealistic, management is expected to have control strategies in place to reduce the risk to levels “as low as is reasonably practicable” (ALARP).

here are two vital ingredients for healthy living; clean air and pure water. Even though we live in a well organised, caring and wellresourced country we still have to be vigilant about the quality of the air we breathe and water we drink. Modern technology can, however, whilst solving one problem unwittingly create another unexpected and unintended problem, as it has in the case of the diesel engine on which we are so reliant. On the one hand modern diesel engines have become significantly more efficient than their predecessors whilst on the other their exhaust products have become more toxic and increasingly hazardous. In 2006 the California Air Resources Board estimated that diesel exhaust pollution directly accounted for 2400 deaths and annually and nearly 3000 hospital admissions for respiratory and cardiac related diseases at a cost of US$19 billion (Krishovko B.A., et al, 2008). More recently, Vermeulen et al, (2014) also concluded that Diesel Exhaust Emissions (DEE) at levels common in the workplace and in outdoor

HEALTH HAZARD ASSOCIATED WITH DIESEL EXHAUSTS

Whereas the health effects of inhaling diesel exhaust products have been investigated and commented on over many decades the scale of the challenge became much clearer in 2012 following two significant events. In March of that year the National Institute for Occupational Safety and Health

4.0

Nuclei Mode - Usually forms from volatile precursors as exhaust dilutes and cools

3.5 3.0 2.5

Ultrafine Particles Dp < 100 mm

In some cases this mode may consist of very small particles below the range of conventional instruments, Dp < 10 mm

2.0 1.5

Coarse Mode - Usually consists of reentrained accumulation mode particles, crankcase fumes

0.5

PM10 Dp < 10 µm

Accumulation Mode - Usually forms from carbonaceous agglomerates and adsorbed material

1.0

0.0

THE NATURE OF THE CHALLENGE

Fine Particles Dp < 2.5 µm

Nanoparticles Dp < 50 mm

100

Diameter (nm)

Number

Surface

(NIOSH) and the National Cancer Institute (NCI) published their 20-year “Diesel Exhaust in Miners Study” report. This study involved a cohort mortality study of 12,315 mineworkers exposed to diesel exhaust at eight US nonmetal mines. This study indicated a strong relationship between the level of exposure to diesel exhaust and risk of lung cancer mortality. At higher exposures to diesel exhaust, the mortality rates were about 3 to 5 times greater compared to those workers who had the lowest exposures (Attfield MD., et al, 2012). Soon thereafter a panel of experts, convened by the World Health Organisation’s (WHO) “International Agency for Research on Cancer” (IARDC), changed the categorisation of diesel exhaust from Group 2A to “Carcinogenic to Humans, Group 1”, based on the evidence of a number of epidemiological and toxicological studies carried out over the previous decades.

1,000

10,000

Mass

FIGURE 1: TYPICAL ENGINE EXHAUST PARTICLE SIZE DISTRIBUTION BY MASS, NUMBER, AND SURFACE AREA. DP IS THE AEROSOL PARTICLE DIAMETER (ADAPTED FROM KITTELSON D. 1998).

AUSTRALIANMINING

The exhaust products from diesel engines include a mixture of high temperature carbonaceous particles (Soot) and gases, including oxides of carbon, nitrogen and sulphur as well as a wide range of Volatile Organic Compounds (VOCs). In the older, less efficient engines, more carbonaceous material or soot particles were produced which, whilst undesirable, served a very useful purpose in adsorbing much of the toxic gases on their surface. They also provided a very useful surface for the condensed gases which formulated in the ambient dilution zone beyond the tailpipe exit (Uhrner U., et al, 2011.). As the newer more efficient engines, with various after-treatment devices, came on stream the physical and chemical dynamics occurring in the dilution plume changed. With greatly reduced discharge of emitted primary carbonaceous particles the cooling of the hot

MARCH 2015

UNDERGROUND MINERS ARE EXPOSED TO HIGH LEVELS OF EXHAUST FUMES

gases not only caused condensation but, as they became super-saturated, the VOCs etc., nucleate and in so doing produce a new range of very fine particulates (Kittelson and Abdul- Khalek, 1999. Kittelson, et al., 2002. Ning et al, 2010. Kittelson and Kraft, 2014.) Indeed, researchers investigating such conditions have clearly identified a tri-modal distribution of particulates (Kittelson and Kraft, 2014) as shown in Fig 1. Nucleation mode: Particulates composed mainly of volatile organic and sulphur compounds which typically have aerodynamic diameters less than 50 nm with maximum concentrations occurring in the range 10-20 nm. These particulates typically make up less than 10% of the particle mass but more than 90% of the total particle number. Accumulation mode: Sub-micron particulates consisting mainly of carbonaceous agglomerates with condensates and adsorbed material having aerodynamic diameters ranging from 50-500 nm and maximum concentrations occurring between 100 and 200 nm. This mode contains most of the particle mass. Coarse mode: Soot particles with aerodynamic diameters in excess of one micron (1000 nm). Fig 2 demonstrates the likely sequence of particle formation taking place as the exhaust products move along the tailpipe and thereafter into the dilution and cooling plume in the ambient air for a heavy duty diesel engine in cruise conditions (Kittleson D, et al 2014). Within the dilution zone there is competition between the nucleation of ultrafine particulates and the adsorption and/or condensation processes with fast dilution and cooling in the presence of low concentrations of ac-

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Carbon formation/oxidation t = 2 ms, p = 150 atm., T = 2500 K

There is potential to form solid nanoparticles here if the ratio of ash to carbon is high.

Formation

Ash Condensation t = 10 ms, p = 20 atm., T = 1500 K

Decreasing temperature

cumulation mode soot particles favouring nucleation (Ning et al, 2010). The nucleation mode particles due to their high number concentration, surface area, size and toxicity present the most serious health hazard since their ability to be transported to the lower levels of the lung and penetrate the epithelium make them the major cause of adverse health effects. Whereas high nanoparticle emissions are not a new development, what is new and unexpected is that nanoparticle emissions may not decrease along with mass emissions, but may actually increase.

Increasing Time

Exit Tailpipe t = 0.5 s, p = 1 atm., T = 600 K

This is where most of the volatile nanoparticles emitted by engines usually form.

Atmospheric Aging Exposure

Sulfate/SOF Nucleation and Growth t = 0.6 s, p = 1 atm., D = 10, T = 330 K

Fresh Aerosol over Roadway-Inhalation/Aging t = 2 s, p = 1 atm., D = 1000, T = 300 K

MINE VENTILATION SYSTEMS.

One of, if not the most important, Increasing residence time requirement in the planning and management of underground mines is the provision of safe atmospheres within FIGURE 2: HISTORY OF PARTICLE FORMATION IN A COMPRESSION IGNITION which workers can breathe and work. ENGINE (ADAPTED FROM KITTELSON ET AL., 2006) In some jurisdictions this requires each production unit within the mine to have injury or illness to mineworkers must the mine in sequence with the worst its own supply of fresh air obtained be within acceptable limits and be “as atmospheric conditions being experifrom the main intake airway. Such syslow as is reasonably practicable”. enced at the lowest point in the circuit tems, referred to as “Parallel Ventilawhere the atmosphere contains all tion”, ensure the pollutants generated the additive pollutants generated at all in each section are returned directly to HEALTH RISKS TO MINEWORKERS upstream locations. the main return airway and are isolated The following statements made by Dr In a recent paper (Brake D.J., 2012) from other sections in the mine. Patrick Glynn in recent articles (Glynn the author presents an even-handed However, Western Australian metal P., 2011, Walker S., 2014) highlights comparison of both systems listing mines predominantly use the “Series the challenges facing those responsiadvantages Ventilation” A M 0 3 1system 5 _ 0 whereby 0 0 _ Sthe C Hven-1 their 2 0 1 5 - 0 2as - well 1 6 as T 1emphasis3 : 3 5 : 3 ble 9 +for 1 the 1 : health 0 0 and welfare of miners ing the need to ensure that the risk of tilating air traverses each section of in WA’s Underground Hard Rock Mines:

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AUSTRALIANMINING

MARCH 2015

“With the aim of reducing DPM mass, engine manufacturers have improved the combustion efficiency of diesel engines by the introduction of common rail and turbocharging”. However, “an unwanted outcome of this development is the increase in the number of diesel particulates with a more than 50% reduction in average diesel particulate size. This reduction in DPM size is of particular concern as larger DPM (less than 2.5 microns) coated with polyaromatic hydrocarbons (a known carcinogen) will affect a minority of the population whereas the smaller (less than 100 nm) DPM can cross the lung membrane barrier into the bloodstream. This has the potential for health effects to 100% of the population.” As stated by Ning et al, (2010) retrofitted vehicles with diesel particulate filters and other treatment control devices greatly reduce the emitted primary soot particles. However, this reduction in particle surface area facilitates the formation of nucleation mode particulates from the organic vapours under favourable temperature and dilution conditions. The scale of the problem is magnified many times over in our “Series Ventilated” underground hard rock mines by virtue of the fact that: • The materials handling of waste rock Continued page 30

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SAFETY FIRST

From page 29 and ore is typically carried out in the intake airway by LHD’s (up to 330 kW) loading diesel trucks (up to 600 kW) transporting rock/ore out of the mine for the full shift and running back empty ready for another full load. • All ancillary equipment such as jumbo drill rigs and LHDs etc., are also diesel powered and in regular use at various levels in the mine. Consequently it is not difficult to appreciate the compounding and additive effect of the diesel exhaust products from all these items of equipment as the intake air continues on its path from the mine portal to the lower levels of the mine.

EXPOSURE METRICS

It has become increasingly clear to researchers that the current metric in use for assessing the level of DPM in underground workplaces based on mass of elemental carbon per unit volume (mg/m3) is inadequate. Other relevant factors such as size distribution of the particulates, their total surface area and their composition appear to be much more relevant in assessing the health hazards associated with the inhalation of DPM., Wierzbicka et al, (2014). As stated earlier ultrafine particulates can make up 90% of the total number of particulates in diesel exhausts’ ambient dilution plumes and in general terms the smaller the particle inhaled the greater the health risk. As the average size of particles decrease their surface area per unit mass increases, thus making them more biologically active and allowing greater exposure of their surface chemistry to the alveoli tissue in the lung and their subsequent uptake across the lung membrane into the blood stream and lymph circulation enabling them to reach such sensitive targets as the lymph nodes, spleen, heart and possibly the central nervous system. Whereas current guidelines require the mass of elemental carbon to be measured, with the maximum level of exposure set at 0.1 mg/m3 for an 8 hour shift, both mass, particulate/aerosol size, number and surface area should be measured to better assess the adverse health impact of ultrafine aerosols in underground metal and non-metal mines ( Bugarski and Timko, 2007), not forgetting the gas phase components that also have carcinogenic and irritation effects. Ultimately it may be possible to develop a new metric based on a “Lung Deposited Dose” for exposure groups Wierzbicka et al, (2014).

NITROGEN DIOXIDE ISSUE

Underground miners working with diesel powered equipment can potentially

be exposed to a range of gases in addition to diesel particulates and the ventilation rates must always be sufficient to dilute these gases to below the threshold limit values (TLV). These gases include carbon monoxide, carbon dioxide and oxides of nitrogen and of these nitric oxide (NO) and nitrogen dioxide (NO2) along with diesel particulates are the most difficult engine emission products to control. Both NO and NO2 can cause short-term (acute) and long-term (chronic) health problems, mostly pulmonary and cardiac related (Cauda E.G., et al 2005). Of these NO2 is extremely toxic and its Time Weighted Average (TWA) for an eight hour shift was recently reduced by the American Conference of Government Industrial Hygienists (ACGIH) from 3 ppm to 0.2 ppm. In high concentrations NO2 forms nitric acid in the lungs causing pulmonary oedema. The after-treatment diesel exhaust devices usually include a filtration system to remove the particulates and an oxidation catalyst (DOC) to promote oxidation of Carbon Monoxide (CO), gas phase Hydrocarbons (HC) and the organic fraction of diesel particulates to harmless oxidised products. Oxidation catalysts whilst promoting oxidation of all compounds can generate unwanted products such as sulphuric acid from Sulphur Dioxide (SO2) which can nucleate as sulphate particulates and the more toxic NO2 from the oxidation of NO. Both these outcomes are highly undesirable and warrant further investigation. The European Commission’s “Scientific Committee on Occupational Exposure limits for NO2” (SCOEL, 2014) recommends and 8 – hour TWA of 0.5 ppm (0.955 mg/m3) and a STEL of 1 ppm (1.91 mg/m3). As stated in a recent article ( Walker S, 2014) “hence the need for a better understanding of the conditions under which NO2 is produced during diesel-engine operation, with the aim of developing effective control strategies and technologies AUSTRALIANMINING

EMISSION LEVELS CAN BE MITIGATED

that are applicable to machines working underground”. It is of course necessary to adjust the standard 8-hour/5-day week TWA Standards for non-standard shifts and rosters. Whilst there are numerous models available for doing so, the simplest and perhaps the most conservative one is the “Brief and Scala’ model (1975) and the Reduction Factor (RF) for the case of a seven day working week is: RF = 40/h x ((168 – h)/128) Where: h = average hours worked per shift 168 – h = exposure free hours per week

RISK REDUCTION

Bearing in mind the potential health hazard to underground miners of consistent and long-term inhalation of diesel exhaust products surely the matter is deserving of a well-structured and organised industry-wide “Risk Assessment”. This would normally involve a team of qualified and experienced personnel carrying out a HAZOP or similar analysis with the intention of identifying existing controls and those which should be adopted along with a list of recommended management actions, auditing procedures and timetable for implementation. Needless to say, to be successful, a whole mine approach would be required taking into account mining operations, maintenance practices, fuel quality, ventilation provisions, monitoring of air quality and the provision of well-structured education and training programs. In this regard the Resources Safety Division of the Western Australian Department of Mines and Petroleum (DMP) has through its Mining Industry Advisory Council published a useful and informative set of Guidelines; not to mention the New South Wales’ MDG 29 and Queensland’s QGN 21 guidelines which are

MARCH 2015

equally informative and helpful. The hierarchy of controls worthy of consideration include: • Replacement of diesel powered plant and equipment with electrically operated units. • Use of lower emission fuel e.g. use ultra-low sulphur fuel (< 10 ppm) and/or biodiesel/blends instead of petroleum diesel. • Improving the mine ventilation system, possibly using ventilation on demand (VOD) and/or use of alternative ventilation systems at workplaces and workshops etc. • Isolate personnel as far as is humanly possible in enclosed pressure-controlled cabs and use respiratory protection for those working in high emission environments. • Keep up to date with relevant and recent research work and consider full-scale trials of newly developed systems such as the combined CSIRO Acoustic Agglomeration system and efficient exhaust catalyser. • Ensure high standard of education and training for management staff and mineworkers.

CONCLUSIONS

Bearing in mind the seriousness of this complex issue and its potential to adversely affect the health and wellbeing of underground hard-rock mineworkers where diesel powered equipment predominate, and whilst acknowledging the existence of well-structured “Diesel Emissions Management Plans” at most mines, a thorough review of the atmospheric quality conditions currently prevailing in a representative sample of our underground mines would be a good first step because an effective strategy to deal with the challenge can only be based on the facts. In this regard reference should be made to the Nanotechnology Safety and Health Research Program at the National Institute for Occupational Safety and Health (NIOSH), which has involved full scale studies characterising the physical, chemical and toxicological properties of diesel aerosols in an occupational setting at NIOSH’s Lake Lynn Laboratory experimental mine in Pennsylvania (Bugarski and Timko, 2007). Thereafter the industry should take ownership of the challenge by fostering and financing well-targeted research as well as developing, in collaboration with equipment manufacturers and the various State Government Mines’ Departments etc., appropriate Codes of Practice and Guidelines for the Ventilation and Air Quality Control in Underground Hard-rock Mines where diesel powered equipment predominate with such outcomes being embedded within the new “Harmonised Work Health and Safety Regulations”.

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OPINION: THE TEMPTATIONS OF INCIDENTAL REPORTING IN INDUSTRIES WHERE SAFETY IS KEY, THERE’S HUGE PRESSURE TO KEEP THE STATS LOOKING GOOD. BUT WHAT HAPPENS IF DATA CAN BE MANIPULATED TO SUIT BUSINESS NEEDS? BEN HAGEMANN LOOKS AT THE TEMPTATION TO TWIST THE NUMBERS THROUGH A LITTLE CREATIVE CLASSIFICATION.

magine there’s been an incident in your processing plant, with machinery affected by a series of unfortunate process deviations. Alarm bells sound and inevitably, production will be affected. What do you do? Do you switch the alarm off, hope no one heard it and try to carry on without recording the events that led to said loss of production? No, of course you don’t. Quite apart from the fact that your job might be on the line for such a grievous neglect of duty, you wouldn’t do these things because you would want to know exactly what went on, and how you could prevent it from happening in the future: You wouldn’t want anyone else to make the same mistakes. Unfortunately this kind of administrative behaviour is found all over the nation, and in various industries including mining, when it comes to something far more important: The physical safety of our workers. Admittedly, the Australian mining industry has some of the most stringent administrative safety processes in the world. If you talk to mining professionals from other countries they tell you the degree of paperwork required on the job in Australia is borderline obsessive compulsive. However, there are problems with the system. All companies in Australia keep statistics relating to the number of injuries recorded during a given time period. Often these come as an injury rate per hundreds of thousands of hours worked. This kind of lagging performance indicator certainly makes for interesting reading, but contributes far less to preventative action. The other most popular measurement, the one we see on boards in factories and at mine site entrances, relates to Lost Time Injuries, or LTIs. “No LTIs for 160 days,” for example, will be proudly emblazoned with stickon numbers, ready to increase on a daily basis until that fateful day (may it never come). But it will come. The safety culture of

Zero Harm is a noble goal, but also an imaginary, impossible construct. In BHP inductions, new workers are told “You have to BELIEVE in Zero Harm,” which makes the safety officers sound alarmingly like some kind of bizarre cult, rather than the realists you expect to ensure processes are safe. And many companies have similar, branded names and logos to demonstrate their commitment to safety on site for workers. By placing importance on the statistics, like LTIs or injury frequency, there’s a clear motivation to keep these statistics as low as possible, and with that motivation comes temptation. Safety staff are expected to keep things safe, and that is all good and well, but what if the collected safety statistics reflect on the performance of safety staff? Is there a temptation to record fewer severe injuries by reclassifying those injuries to register a lower impact on periodic safety report? What happens when you have to take down the numbers on the LTI board and start again from double zeros? Picture this: A man seriously injures his back at work, lifting an object at the instruction of his supervisor. He is taken to medical care, treated with pain medication, and returned home. Within 24 hours he gets a visit at home from the site safety officer, who is concerned about his condition and wants him to come back to work. The next day he visits again, but this time he says there are suitable duties for the injured worker in the office, and that it would be better to get back to work rather than push the time at home into the realm of a LTI. This would seem to be an unprofessional impropriety which may leave the worker feeling pressured to take the hint and show up for some paper shuffling simply to keep the LTIs down, but this kind of behaviour takes place all the time – The problem is we don’t know how often because of the lack of reporting. AUSTRALIANMINING

This particular example is a real anecdote which cannot be properly described for legal reasons, but the worker in question was pressured into returning to work despite being on prescription opiates, after the safety officer told him that another worker N 1 1 1 3 _ after 0 0 0his_ back SAF didn’tF “co-operate” injury and that things were not looking

SIMPLY ROLLING DOWN SLEEVES ISN’T THE BE ALL AND END ALL OF SAFETY

good for his future employment. Despite there being a zero tolerance to testing positive for drugs on site, a 1

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Continued page 32

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SAFETY FIRST

From page 31 worker who was inebriated by painkillers was allowed back on site by the site manager, who said this was fine because a doctor had prescribed the pills. This is an example of a chronic breakdown of the administrative safety systems on site, where the motivation to avoid reporting a serious injury by getting the worker back on site was valued more by safety and management staff than the actual recovery and ongoing safety of the worker. Health and safety officer Goran Prvulovic wrote in a recent op-ed that there exists in Australian industry certain practices and behaviours aimed at undermining the reported severity of injuries, practices which result in the loss of opportunities for improvement to overall organisational safety performance. “In some cases, these practices can also create further damage to injured persons and as a result increase adverse legal exposure for the senior decision makers,” Prvulovic said. The temptation for occupational health and safety staff is to try to influence the type of injury recorded, or if possible, avoid recording it at all. This can be especially so if the performance of the safety staff and responsible management on site is linked to KPIs, where the absence of incidents indicates a higher level of safety, and in turn better pay rises and annual bonuses. “If we look at the problem from the standpoint of some senior managers, it is far easier and faster for someone to ‘tweak’ a figure than to seriously engage and apply efforts in management of health and safety,” Prvulovic said. In one of the worst kind of examples, management can wilfully ignore an injured worker and fail to report the incident at all.

There is a case currently before the Queensland Workers’ Compensation Regulator involving a worker at the Mt Isa mine who collapsed and lost consciousness on site. The worker said Xstrata (now Glencore) did not report the event for three years, despite the fact that a worker collapsing on site is a mandatorily reportable event under the Mines Act. According to the worker, superintendents at the mine did not prepare the report until it was requested by the Mines Department. The same worker described an event in which a mill motor blew up and threw a 20 foot flame past four workers, another event which went without an incident report despite referral to superintendents. Allegations about a systemic lack of incident reporting at Mt Isa have been referred to the Queensland Ombudsman, and will bear further discussion later in the year. Such lack of reporting, or alteration to incident classifications, renders data produced by companies suspect, and makes work harder for investigators down the line. By the same token, it does not necessarily follow that more incidents mean safety staff are not performing adequately in their job; After all, workers will make mistakes that result in injuries, regardless of how many ‘Take Fives’, hazard reduction cards or JSAs they fill out on a daily basis. Herein lies a different problem, relating to proactive management of potential incidents. We are all familiar with the hierarchy of controls: Elimination, Substitution, Isolation, Engineering, Administration, and Personal Protective Equipment (PPE). However, despite the theory taught in long induction sessions (sometimes for days in the case of BHP and Rio

ACCURATE REPORTING KEEPS MINERS AHEAD OF THE TREND

AUSTRALIANMINING

Tinto sites), actual practice at the work front relies extremely heavily on administration and PPE, which are supposed to be last lines of defence. It has certainly been suggested on many sites that greater emphasis on undertaking safety paperwork can itself breed complacency among hands-on employees at the work front. Safety statistics have become very important for the business, however. Mining contractors frequently boast of amazing safety records: One major earthmoving contractor during the Pilbara boom claimed to have an LTI-free period running into years, which gave them a competitive advantage in the tender process. Better safety records can also reduce the insurance premiums, which is a huge safety incentive for companies which need to reduce regular administrative running costs. “In today’s competitive world, contracts are won or lost on safety performance, and this in itself can be a powerful motivator towards undermining the severity and work relatedness of injuries,” Prvulovic said. “In some organisations inappropriate classification practices occur with a clear intent to embellish their safety performance.” In a situation like the current climate of low commodity prices, we have seen the management structure of miners shift their strategic focus from investment to cost-cutting, and anecdotal reports suggest large numbers of safety staff have been cut alongside with other sectors within individual businesses. While safety does not contribute to the immediate productive capability of a project or mine, it can be (mistakenly) seen as an area which can be whittled down without adverse effect thanks

MARCH 2015

PPE: THE LAST LINE OF DEFENCE

to established safety protocols and procedures. In the long term any reduction in operating cost that is based on removing real services and staff, rather than corresponding operational shifts towards greater efficiency, will have an effect down the track. There are companies that have served as a stark reminder of the consequences of cutting back on safety staff, decisions made by upper management to reduce costs by dropping experienced staff, and over the past year we have seen a startling jump in the fatality trend, nearly one worker every two weeks. 2015 looks even worse, with four deaths registered in only six weeks. We’ve also seen a number of significant near-misses with major crane accidents at Roy Hill and Inpex’s Ichthys project. The temptation to ‘juke the numbers’ when it comes to reporting of safety incidents may find justification in business practice, but at what cost down the line, to both the business and individual workers? What is clear is that it is in the best interests of employers to properly report and maintain their safety records. With detailed reporting systems of work and operation can be checked and adjusted so that they evolve to the needs of workers on site, and reduce those numbers. Any attempt to cover up or sweeten the story about injuries and safety incidents is short sighted, a means to short term gains that will inevitably lead to more injuries, and have potentially disastrous consequences in the long term.

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Keeping you safe on site AUSTRALIANMINING

MARCH 2015

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MATERIALS HANDLING

MAINTAINING POWER PROCESSES NEW CONVEYOR DRIVES ARE MAKING COAL HANDLING MORE EFFICIENT AT LOY YANG.

ower stations are 24/7 operations. So ensuring they continue to run, no matter what, is a difficult enough proposition, but when these power stations are faced with the prospect of having to increase their output then making sure they are kept supplied creates a whole new raft of challenges. As part of a push in the industry to become more sustainable whilst still delivering the same levels or higher of power, AGL’s Loy Yang power station underwent a conveyor system upgrade to extend the machinery and minimise production stoppages, breakdowns, and unscheduled downtimes. The Loy Yang mine itself is a massive operation that uses mainly automated processes to transport coal from the bottom of the pit to the nearby power station. It employs massive bucket wheel excavators that exhume

up to 4000 tonnes of coal per hour, after which it deposits the material on to dredgers conveyors that feed on to main transfer conveyors that run on each level of the mine. These main transfer conveyor systems comprise multiple separate conveyors, each with a belt-width of two metres and a travel speed of 5.2 meters per second (approximately 19 kilometres per hour), and have a combined length of 25 kilometres. The conveyors then move the coal to a raw coal bunker, which has an 80,000 tonne capacity. Additional conveyors then move the coal from this bunker to two separate power stations located at the top of the mine, AGL’s Loy Yang 2210MW and GDF Suez’s Loy Yang B 1000MW power stations. However, as the coal bunker only has enough capacity to fuel 20 hours of power generation, it is crucial that the conveying system consistently performs.

Working with Rockwell Automation, Loy Yang installed an upgrade in its four-level open cut coal mine, which included the redesign and progressive changeover of the existing coal transfer conveyor system.

THE CONVEYORS RUN OVER 25 KILOMETRES

AUSTRALIANMINING

MARCH 2015

KEEPING CURRENT

The original legacy transfer conveyor drive systems at the Loy Yang mine were based on water-cooled eddy-current coupling (ECC) technology. While the ECCs were an ideal drive solution when first installed, as they provided high torque over a wide speed range – which is ideal for moving large amounts of coal from the bottom of a pit to the surface, it had become clear that these drives systems were now struggling to move the coal as effectively as possible. On top of this, the existing eddy-current coupling drive systems were becoming more difficult to maintain while the control systems became unreliable. “The ECCs are an older method of conveyor control and as the mine continued to grow we needed additional power so it was clear that we needed to move towards a more modern system,” AGL Loy Yang mine electrical superintendent, Robert Collins, said. “The need to keep up with increased power demand provided AGL Loy Yang with the opportunity to implement a drive solution incorporating the latest technology that would work ef-

AGL’S LOY YANG POWER STATION

fectively in the mine’s rugged environment,” he said. To overcome this issue affecting the large numbers of conveyors on site, AGL Loy Yang focused on implementing new drive architecture technology in a gradual manner to allow for integration with existing drive systems and control architecture without heavily impacting production. Working with Rockwell Automation, AGL Loy Yang developed a new drive solution built around an Allen-Bradley PowerFlex 7000 medium voltage AC drive. Known as ‘direct-to-drive’ technology, it helps to eliminate the need for isolation transformer applications. The mine’s engineering team decided to equip each conveyor with a fully self-contained, cooled, and removable drive package that could be easily installed or uninstalled on all the site’s conveyors. The simplified nature of the drives eased the development of the portable drive packages. “The transformerless con-

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MATERIALS HANDLING

drive packages with the existing ECC drives. “Integrating the new drives at the mine has been a relatively straightforward project to complete,” he said. “We have a lot of experience using the drives now, making it a fairly easy, run of the mill upgrade that doesn’t take too long.”

figuration of the PowerFlex 7000 meant we were able to help minimise the footprint of the drive package,” Rockwell engineering team leader, John Dunn, said. “The main electrical feature is the load sharing between different drives on each conveyor; we developed a portioned stainless steel IP65-rated enclosure, equipped with an airconditioned cooling system, to house each of the 6.6kV PowerFlex drives,” he said. “The ‘minimal component count’ was also a feature of the drive solution, with fewer parts eliminating the number of things that could go wrong.”

THE END GAME

INTEGRATION ON SITE

Nine drive packages have been supplied to the coal mine to date. Engineers overcame the integration issues caused by the existing drive technology and THE NEW DRIVES CUT control architecture by inter- the mine’s existing communi- ed via these EOIs or through the CONVEYOR DOWNTIMES mine’s SCADA system,” Dunn facing the first drive packages cations network. Each drive package is then explained. with PLC5 systems packages “The locally mounted EOIs in a neighbouring switchroom. equipped with an Allen-Bradley It then uses ControlLogix, electronic operator interface lo- make it easier for site person- the drives to the elements.” The two teams also worked which is linked to the mine’s cated on the front panel of the nel to access drive diagnostics without supervisory ac-E R drive A M 0 2 control 1 5 _ 0and 0 0data _ S - enclosure. 1 2 0 1 5 - 0 1 - 2 0 T 1 0 : 3opening 3 : 5 4 +the 1 1dust: 0 0 together to devise a strategy to “The drives can be interrogat- proof enclosures and exposing seamlessly synchronise the new quisition (SCADA) system, via

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Since the installation of the drives Loy Yang has seen a reduction in production stoppages, breakdowns, and unscheduled downtimes. Engineers now have advanced diagnostics and troubleshooting capabilities, allowing for a reduction in maintenance, and allows them to eliminate isolation transformers whilst providing load sharing between conveyors, which can now regenerate energy if required. However the job is not yet done, with additional upgrades slated. Following this project the AGL Loy Yang team is now planning to progressively replace other ECC drives across the mine, and is designing a new downhill conveyor based on the drive that will be used for backfilling the mine. AM

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AUTOMATION

THE NEXT WAVE OF TECHNOLOGY AN INSIGHT INTO WHAT IS MAKING RIPPLES IN THE MINING TECHNOLOGY SPHERE. COLE LATIMER WRITES.

ining has been lumped with a public image of it as a slow, plodding industry filled with massive tottering machines lumbering across the landscape. And while this was once true, it simply isn’t the case anymore. With the easy to detect and easy to mine deposits nearing the end of their lifespan or already long gone, mining has been forced to become more innovative, seeking new ways to use technology, and even develop its own, to not only uncover new deposits, but extract the ore in a more productive way. This greater drive for productivity is now, more than ever, crucial as we move into an era of stagnating commodity prices combined with historically high operating costs that were created as a hangover of the mining boom. The industry is changing rapidly, and forging new paths in productivity, and the way in which it mines.

So what technology is leading the way, and how is the mining industry adapting to this brave new world? While it appears little has changed for the public as massive mine trucks make their way across the site, everything is not as it seems as the now driverless trucks become more and more prevalent. Automation, which is allowing for these driverless vehicles, is one of the major defining factors of the new era of mining. But as Rio Tinto group executive and head of technology and innovation, Greg Lilleyman told Australian Mining: “A well run mine that implements automation becomes a well run mine that is automated, while a poorly run mine that implements automation simply becomes a poorly run mine that has automation.” Or as Accenture’s mining program and project manager Nigel Court more succinctly put it: “A fool with a tool is still a fool.” Automation is making the large machines move, but it is

in the nitty gritty,, management processes, and deep analysis of operations that miners will be making major strides ahead. Understanding the impact of automation and new technology, and the best way to utilise it on site in conjunction with better operating principles matters more than ever. The ability to centralise talent, use these combined skills to increase productivity and efficiency on site, integrate new methods of operation, as well as new technologies, is what

AUTOMATION IS DRIVING CHANGE IN MINING

AUSTRALIANMINING

MARCH 2015

will help propel mining into a new age. However, Court added: “We need a clear corporate mandate on how operations are going to use it, because if there is no corporate mandate then it’s basically useless.”

BIG DATA REVOLUTION

Big Data is a relatively new player in the mining tool box, and is connected to the rise of the Internet of Things. Essentially it is the ability for increased reporting and capture of data sets across multiple systems, combined with IoT’s capacity to allow for interconnectedness between machines and computers. The integration of Big Data processes into operations is allowing miners to gain real time, deep, and granular views of their operations and equipment Miners are now seeing, for the first time, every single aspect of their site and fleets, their operations, and true productivity. Court gave an example of a partnership with GE, where operational information is captured on planes in flight, so that operators on the ground can make decisions on its condition and choose to carry out maintenance activities as soon as it lands. With this foresight “it allows operators to reschedule their plans around incoming data and plan for the future,” Court said. “For instance, if a shovel was down at one mine site then you can reschedule operations so that

WHAT IS THE NEXT BIG LEAP IN MINING TECHNOLOGY?

train times can work this into their timetables and move product more efficiently, and you have trains potentially going to other mines still producing at the same rates to collect ore. You don’t have much of the the same idle machinery you once had,” he said. This has far reaching implications, with Big Data integration allowing for wider decisions across all operations, not just singular sites. However, for all the data capture that the new technology allows, miners still have to develop the capability to actual understand and use it, and with the integration of Big Data still in its infancy the road ahead is yet to be forged. Speaking to BHP’s group head technology, geoscience, and engineering Bryan Quinn, he told Australian Mining Big Data is bringing opportunities for all of the industry, however it is still early stages. “People are developing smart systems to do detailed data analytics on all that data, and right now we’re observing it and looking at what’s right for us for the future as well,” he said. “We already have all our mining fleet over real-time information, our processing plants have real-time information, so Continued page 38

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AUTOMATION

From page 36 bringing it all in one point and actually doing the right data analytics to look at how to progress is fundamental to improving, so it makes good sense to be doing more of that.” “We’ve just started dipping our toe in to Big Data,” Lilleyman told Australian Mining, “we’re really starting to understand how this concept can best apply to our business”. “For us Big Data is about knowing how to ask the right questions before we start using it, as its different to standard analytics, it’s predictive. “Previously, to get an understanding of our operations, we looked at the prior month and saw how sites performed and then change the operations from there whereas now Big Data allow you to identify patterns to predict operations in the future to where there might be a safety issue, or where equipment failures may occur, or how operations may perform in into the future.” Court went on to add this predictive analysis can create machine plans that allow users to gain keener insights into true operating capacity and make decisions regarding maintenance such as whether to run machines close to risk failure but increase

production against fixing a machine now and avoiding potential permanent damage. “There’s a lot of opportunity, but it is still a bit of ‘watch this space’,” Lilleyman added.

NEW TECHNOLOGY

But is not just about real time operational data and its usage, simulations are also becoming more prevalent within the industry. “We’re really seeing the emergence of simulation in mining, for use in remote operation centres, in planning and scheduling, and in training,” Court said. Much of this is being driven by the aforementioned integration of Big Data. “Operators can now trial new modelling and fleet management plans, for a better and more rounded view of operations, and make tweaks to obtain maximum efficiency before they implement anything,” Court said. “They can use these simulations to create a model of good performance, so when they combine this with real time data that can get notifications of machinery operations and historical data from their operations around the world they can predict trends and implement new methods to become more efficient. “Without a doubt we’ll see more simulation come in to play,

so we can have an end-to-end overview and capacity.”

CENTRALISATION

However the two major miners are taking vastly different approaches when it comes to remote operations and the centralisation of skills. Rio Tinto’s focus has seen it bring together its skilled operators into single locations de-

HOW WILL 3D PRINTING CHANGE MINING? IMAGE: RICH BROWN/CNET

AUSTRALIANMINING

MARCH 2015

signed to service its sites as part of its wider Mine of the Future program, unveiling the Processing Centre of Excellence in Brisbane last year. It is designed to provide processing solutions and initiatives to mine sites in Mongolia (at Oyu Tolgoi), the US (at Kennecott), and across Australia (at five different sites). A massive interactive screen shows and analyses technical data in real time, “allowing processing improvements to be immediately introduced and operational performance to be optimised,” the miner said. Early trials have already led to improvements such as adjusting the flotation process for gold and copper recovery at Oyu Tolgoi in Mongolia. However BHP’s Quinn told Australian Mining it has a different model to Rio Tinto. “Our model is very much focusing on the core things that matter, and building capability in the businesses,” he said. “We work with our businesses to build that capability inside iron ore, copper, coal, wherever it may be; therefore if we do some detailed data analytics and we find there’s some big opportunities we would gather the right people together from all the commodities, work with them and then get them to take it away and do the detailed analysis, learn, and then share these learnings across the organisation.” According to Court skills cen-

NEW LEVELS OF INTERCONNECTEDNESS HAVE BEEN REACHED

tralisation, particularly in regards to processing, will become more prevalent, however it will create new issues such as data centralisation and the like, creating “new problems in new places”.

PRINTING

3D printing is being billed as the new wave in manufacturing, and is beginning to make own mark in mining. “We’re already starting to see small scale 3D printing on site in Brazil, where small parts are printed as a stop-gap solution if they can’t source a proper part,” Court said. The ability to do this on a wider scale in mining would likely create a whole new vendor/client model, with a new operational data sharing paradigm model with more equipment data going to the OEMs to help make design decisions in the future. However it also creates a serious issue for equipment counterfeiting. In an effort to overcome this this “OEMs could licence models to print parts and a warranty for its operation until an OEM part can arrive on site,” Court said. While these technologies are still in their infancy, the effect they are likely to have on mining productivity will be immeasurable. AM

© 2014 Siemens Product Lifecycle Management Software Inc. All rights reserved. Siemens and the Siemens logo are registered trademarks of Siemens AG. All other logos, trademarks or service marks used herein are the property of their respective owners.

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SOFTWARE & HARDWARE

CREATING MORE OPEN CONTRACTING NEW SOFTWARE IS ALLOWING FOR GREATER VISIBILITY ACROSS CONTRACTOR MANAGEMENT.

n the constant push for cost efficiencies and greater productivity miners are re-examining their processes and how they manage every aspect of their operation, They are striving for greater visibility in order to gain a deep understanding of how they work, who works, and their workflow, in particular with contractors. Sourcing, reporting, tracking, and performance management have all risen in priority, but unfortunately visibility remains clouded. The traditional way of doing this involved delving through reams of paper, but miners began searching for a better way in order to improve their “governance, visibility in real time and control over contracting activities,” at least according to Iluka and a major miner. They focused on five major aspects to gain this greater control: contracts – including worker histories, skills, insurance, and key dates; sourcing – including procurement planning procedures and time frames; management – including performance KPIs and milestones; workflows and business processes; and project management, including prioritisation, project cash flow, and issue management. However both miners faced the unique problem of dealing with a number of different sites which all had their own ways of operating. The miners faced a serious hurdle in implementing a single source system that

not only provided greater visibility, but also a common operating process that ensured the same measurability and reporting for each project or mine. “Previous processes were reliant upon separate registers and databases to manage procurement and contracts for projects, claims, site instructions and communications,” the major miner explained. “We required a single source of information that would summarise the ‘health’ of a contract, to easily and quickly convey all costs including potential costs through unrecognised site instructions and claims,” the miner said. “The ability to standardise processes that supported various project delivery methodologies EPCM, EPC and FEED was also another key driver for us.” Iluka itself had restricted visibility into overall contract information, as there was “no reporting that was specifically targeted at contract spend, contract type, activity or performance,” the miner explained. “We required a tool that would measure these activities.” The two businesses turned to Open Windows CONTRACTS and CONTRACTS Portal to provide them with the greater visibility and support they needed combined with a capability to remotely access the data. Iluka explained: “The CMS offered a functional and user friendly management tool and enabled the ‘embedding’ of standard contracting processes and workflows within the system.”

A LIGHT WAS SHONE ON CONTRACTOR WORK PERFOMANCE

AUSTRALIANMINING

The major miner added: “We used the portal to improve process approval automation, contractor relationship management and enable a centralised contract management life-cycle repository.” For the miners, it changed their whole approach as process workflow templates were now configured to enable contract managers to simply step through their day-to-day tasks whilst maintaining the organisation’s structured electronic approvals. The major has already recognised the benefits of a wide ranging contract management system, which enabled them to eliminate multiple individual registers and databases and manage the entire contract lifecycle in one centralised system “Using an electronic approvals process benefited the organisation by reducing the reliance on forms and templates for approvals that was often a long, drawn out process,” it said. It also uncovered inefficiencies in the existing practices, allowing the miner to stamp out poor processes. “It has brought to the foreground activities that were not good Contract Administration but were accepted as the normal practice. “The implementation of the system has assisted us in improved cycle times from concept to execution of a contract by reducing the time frame by four weeks by being able to implement an automated and streamlined approval process “Using the Schedule of Rates import functionality enabled quick setup of contract line items that can then be viewed and claimed for payment by external contractors via the CONTRACTS Portal,” it said. “Contractors submitting claims for payment utilise export and import function-

MARCH 2015

PROCESS WERE STANDARDISED ACROSS MULTIPLE SITES

ality by exporting the current Schedule of Rates lines, updating claimed quantities and importing back into the CONTRACTS Portal for assessment and approval by contract managers.” One of the users of the program added: “I have greater oversight and visibility on what is happening within projects, in regards to contracts and procurement, providing information for effective analysis and decision making.” For Iluka it allowed them to configure end-to-end process templates that covered tender creation, evaluation and award, contract execution and performance management, through to expiring contract review and close outs. “Once a contract has been awarded and is being managed in Open Windows CONTRACTS, integration to Iluka’s finance system gives contract managers a view of related financial transactions directly within their contract management system,” Iluka said. “Supplier information is also kept in-sync using the integration to ensure accurate data is always available and maintained. “With improved controls and vital integrations into company systems our company now experiences much better ‘on-time’ management of contracts,” Iluka said. “Open Windows provided a platform for data integration with our existing company reporting system for more comprehensive and granular reporting of contract activity which enabled greater visibility for more informed business decisions.” AM

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PRODUCT SHOWCASE

MAGNETIC WEAR SYSTEM

GIMBAL RATCHET Ratchet company GearWrench are known for creating unique hand tools, designed with the ever-changing mechanical landscape in mind. The latest offering is a one-of-a-kind Drive Gimbal Ratchet, a hand tool that offers special access for those working in tight spaces. It’s basically the ratchet equivalent of a short screwdriver, which can be used in small, cramped spaces where you would fail to a decent swing out of a full handled ratchet. The design allows it to fit perfectly into the palm of your hand, all the while ready to get up and around any obstacle that stands between you and that hard to reach fastener. Available in 1/4” drive and 3/8” drive, the Gimbal Ratchet head can rotate on two planes, providing easier access for the user. Built with a 72-tooth ratcheting mechanism, the Gimbal provides a five-degree swing arc and allows technicians to spin fasteners on and off in hard-to-reach areas.

HAS A FIVE-DEGREE SWING ARC

Like other GearWrench ratchets, the Gimbal Ratchet exceeds ASME performance requirements, and the aluminium finish offers protection. • Gear Wrench www.gearwrench.com.au

SINGLE-USE VERSATILE GLOVES Ansell Industrial Healthcare announces the availability of Microflex single use gloves throughout Australasia and China. One of the world’s most trusted brands in single use gloves, Microflex comprises of a highly diversified portfolio of hand protection solutions that often exceed industry standards. The Microflex range of premium disposable gloves will now be available in Australia, New Zealand and China. Six styles of single use gloves will be progressively introduced to Ansell’s Microflex line, showcasing the brand’s purpose-designed solutions to meet specific end-user needs based upon task, application, and environment. The six styles include Microflex 93-853 High Risk Disposable Nitrile Gloves, Microflex 93-856 High Visibility Nitrile Gloves, Microflex 93-843 Durable, Heavy-Duty Coverage Nitrile Disposable Gloves, Microflex 93-852 Distinct Black Disposable Nitrile Gloves, Microflex 73-847 Wet Grip & Ergonomic Certified Disposable Neoprene Gloves, and Microflex 93-833 Certified Ergonomic Nitrile Disposable Gloves. • Ansell Industrial healthcare 1800 512 746 INCREASED HAND PROTECTION www.ppe.ansell.com.au

POWER SUPPLY UNITS Global electrical connectivity and electronics leader Weidmuller announces the launch of its new generation of switched-mode power supply units tailored to match specific needs. Weidmuller’s new PROeco, PROmax and PRO-H power supply units meet the latest standards and maximise reliability and efficiency to ensure trouble-free operation of a plant, avoiding expensive downtime. Available in single and three-phase units, the PROeco models include 12V, 24V and 48V options, all delivering the basic functions required from a power supply unit together with high effi-

ciency and service-friendliness. Ideal for use in field cabinets, flat distributor boxes or compact series machines, the highly reliable and robust PROeco series provides up to 93% efficiency and minimal no-load losses to ensure low energy consumption and a long service life. The low heat generated from the units facilitates their use in small cabinets and housing. Key features of the PROeco power packs include wide temperature range from -25°C to +70°C; high MTBF value of more than 500,000 hours; remarkably compact slim design with a maximum depth of just 120mm to accurately fit into the smallest cabinet; easy installation and operation; and tricolour LED display and integrated status reAUSTRALIANMINING

Kinder & Co introduces the K-Magrepair magnetic wear and repair system, an innovative solution that utilises advanced magnetic technology for many wear-related problems in conveyor systems. With the ability to hold in place even under the heaviest impact load, the K-Magrepair magnetic wear and repair range provides prompt on-the-fly temporary repair to steel equipment such as chutes, bins and pipes, minimising disruption and stoppage downtime, and ensuring optimal productivity. Featuring a composite rubber or polyurethane casing on all sides, the K-Magrepair magnetic wear and repair system eliminates the need to section out and re-weld damaged steel caused by high abrasion appli-

ALLOWS FOR ON-THE-FLY REPAIRS

lay for simple error detection and convenient remote monitoring. Specifically created for demanding applications in mechanical and plant engineering, light process applications and marine engineering, the PROmax switched-mode power supply range includes single and two/three-phase models and output voltages of 5V DC to 48V DC, and offers the assurance of high performance and durability. Key features of the PROmax range include MTBF values exceeding 500,000 hours; wide temperature range of -25°C to +70°C; start-up temperatures of -40°C; robust and powerful units delivering continuous power of up to 120% at temperatures up to +45°C and high output peaks up to 300% for safe operation;

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cations in conveying lines and vibratory feeds systems. The K-Magrepair magnetic wear and repair range includes K-Magrepair temporary panels, K-Magrepair reusable patches, and K-Magrepair HD wear plates. K-Magrepair temporary panels provide quick abrasion-resistant repair to worn or damaged chute and bin walls, K-Magrepair temporary panels fasten utilising only magnetic force without any need for welding, bolting or adhesives to install the panels. K-Magrepair reusable patches provide instant repair to leaks in steel equipment, K-Magrepair reusable patches are suitable for wet or dry applications, and enable continuous flow of high pressure applications until permanent repair. • Kinder & Co 03 9587 9244 sales@kinder.com.au www.kinder.com.au

compliance with surge protection category III and SEMI F47; and compact and narrow design allowing units to be fitted directly side by side on a DIN rail to save space. Designed for the most demanding of tasks, the PRO-H family of switched mode power supply units are particularly suitable for special applications in power stations, and chemical, pharmaceutical and process industries where reliability is absolutely critical. Key features of the PRO-H units include single and two phase wide voltage power supply models providing a high MTBF up to 1.8 million hours for a long, reliable service life. • Weidmuller www.weidmuller.com.au

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PRODUCT SHOWCASE

EASY CLOSE BOOTS Wolverine has launched a new series of work boot with heavy industry in mind. The new boots, dubbed Tarmac, have been built to be lighter, safer, and stronger. The shoes incorporate technologies exclusive to Wolverine, and feature CarbonMax Nano carbon fibre toe caps, making it 50 per cent lighter than steel

cap boots and stronger under compression loads, whilst ArmorTek toe bumper and heel counter guards are lighter than a rubber bump cap and three times more abrasion resistant. They have full grain leather uppers, reflective EVA midsoles, 300 degree heat resistant outer soles, and padded collars. The shoes also feature an innovative Boa Closure Systems, that offers a high level of convenience. It has no laces, zips, or gussets, and allows the boot to be tightened or adjusted using a simple knob. The boots are available in a variety of sizes, with boot height options of six inches available. • Wolverine 03 9621 7551 www.wolverine. com/AU/en

UPGRADED DRILL

Caterpillar has upgraded the MD6640 Rotary Drill with the new Cat 390 excavator undercarriage, which helps minimise downtime, reduces operating costs and increases machine productivity. The MD6640 is electrically powered and is Caterpillar’s largest rotary drill – capable of hole diameters as large as 349 mm with bit loads up to 64 000 kg. The new undercarriage delivers 32 per cent more drawbar pull for increased steering performance and 56 per cent greater gradeability for traveling on ramps and slopes. Double grouser track shoes provide more traction, and the longer undercarriage reduces ground pressure for improved performance in soft underfoot conditions. The new undercarriage also reduces maintenance and increases durability. All rollers and idlers are sealed for life, which means they don’t require periodic lubrication. The new positive pin retention system increases track reliability and eliminates pin walking, and automatic hydraulic tensioning reduces undercarriage wear. Dual axles with an oscillating front yoke provide flexibility to propel over rough terrain, and they reduce main frame maintenance. The new Cat undercarriage can be retrofitted to models in the field. The MD6640 mast system features square tubular members, which have twice the bending strength of angle iron. The mast machinery integrates the pulldown and rotary drive into one system and avoids the A M0 3 1 5 _ 0 0 0 _ U N I 1 2 0 1 5 - 0 2 - 1 higher 7 T 1 maintenance 3 : 0 6 : 1 associated 0 + 1 1 : with 0 0 chain and caBOOTS ARE CLOSED WITH A TWIST OF THE KNOB ble systems.

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AN UPGRADED EXCAVATOR UNDERCARRIAGE

The rack and pinion system applies constant bit load pressure. Three different mast height options allow single-pass depths of as much as 21.3 m and multipass depths of as much as 42.6 m. The Drillstring Changeout System enables quick drill pipe changes. The design allows angle hole drilling to 25° in 5° increments. Additionally, vibration and noise are minimised by the use of the proven Programmed Drill Control option, cushioned centraliser and shock sub. • Caterpillar www.au.cat.com

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PROSPECT AWARDS

THE 12TH AUSTRALIAN MINING PROSPECT AWARDS FOR MORE THAN A DECADE AUSTRALIAN MINING HAS BEEN RECOGNISING AND REWARDING EXCELLENCE IN THE MINING INDUSTRY.

ustralian Mining has recognised and rewarded excellence in the mining industry for more than ten years, and we’ll continue to do so through the 2015 Prospect Awards. The awards will highlight all aspects of the mineral resources industry: From new technology, the closer focus on productivity, the workers at the front lines, through to those doing the all-important work of innovating and inspiring new ide-

as for the future, the Prospect Awards focuses on the good work done in our mining industry on a daily basis. The Prospect Awards incorporates a gala evening when the industry can stop, and reflect on the positive impact being made, not only on production, but on Australia as a whole. The 2014 Prospect Awards saw good attendance despite a year of plummeting prices, with Peabody taking out the Mine of the Year award for their Millennium Coal Mine, and the Tropicana Gold Mine winning

the hard rock mine category for being ahead of schedule on a joint venture that will see all-in costs of around $600 per ounce. In the field of innovation we saw a number of excellent entries, including the EnviroLAV underground toilet, which only needs emptying every 18 months thanks to its biotech solution for breaking down waste. However, this year we’ve decided that there has been so much innovation across a broad range of fields that we will introduce new categories which will enable a better level of com-

part of it is due to the people that support our winners, the people who know their colleague, their company has achieved greatness, and deserves the attention of the entire industry. This is not the time to wait for someone else to put their hand up, so if you do know of someone who ought to be recognised and rewarded, get online and get a hold of one of the Prospect Awards nomination forms, and make sure your nomination is in with a chance to be among the elite names of Australian Mining. AM

INNOVATION WAS RECOGNISED ON THE NIGHT

WINNERS CELEBRATED TAKING HOME THE AWARDS

AUSTRALIANMINING

petition and recognition for the creativity and hard-work needed to make meaningful changes in this industry. That is not to say that we don’t expect to see forms of innovation come through in every category, giving the organisations and individuals that make our industry great the opportunity to shine through the crowd and have their undivided moment of recognition. The key to the success of the Prospect Awards lies not only with the spirit of innovation within the award winners, but a large

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MINING: AUSTRALIAâ&#x20AC;&#x2122;S MOST RENOWNED INDUSTRY

NOMINATIONS NOW OPEN

Nominations are now open for the 12th Annual Australian Mining Prospect Awards, to be held in 2015, so nominate today to be a part of one of the biggest nights in the mining industry! A total of 13 awards will be up for grabs on the night, highlighting companies innovation and excellence in the mining industry. All finalists will receive free publicity in Australian Mining Magazine and two free tickets to the gala dinner where the winners will be announced. Head to the website to see all the category details and nominate!

For more information about the nomination process please contact Cole Latimer, editor for Australian Mining magazine cole.latimer@cirrusmedia.com.au or 02 8484 0652 or visit www.prospectawards.com.au Platinum Sponsor