This has represented a difficult challenge for mines since 2008: none of the mines in the sample studied have succeeded in moving into this quadrant. This number is higher than the annual engine production of some of the smaller mining engine manufacturers. For machines without factory installed telematics solutions, external service providers can visit sites and add aftermarket hardware to upgrade equipment. Since then, he has worked in several marketing roles and now brings you the learnings from our key markets ranging from industrial to residential markets. This solution must of course pay for itself in the long run. To do this requires a determined focus on eliminating all forms of waste, reducing variability, and improving productivity of assets through advanced reliability and maintenance approaches, together with increased flexibility about changing conditions. The best way to improve SDL productivity is to keep the lead distance in the range of 6 to 9 m and at any time it should not exceed 18 m during any shift. A new way to measure productivity in mining operations Put simply, the industry needs a methodology to help managers understand whether or not they are improving their performance at breaking and moving rock. Safety is paramount to mining operations, and good safety methods can lead to improved production. 8 strategies for reclaiming efficiency and lowering costs in mining 1. Raw methane gas is 40 times more potent than tail pipe exhaust and will remain trapped in the atmosphere for hundreds of years. In that way, delivering data in the right time frame can actually reduce operations’ risk.” Tunnel Vision Since the opportunity for productivity improvement will lie in the areas that operational management can control, we have constructed our index to reflect these areas. Production line processes have a major bearing on overall productivity. Some of these, such as the extended maintenance intervals and engines capable to do more with less, will help miners both on sustainability and productivity fronts, a double gain for the industry,” said Steve Cummins, Director of Mining Business at Cummins. Everest, the Julong Copper Mine features over 65 Cummins engines powering excavators, dump trucks, power generators, drillings and bulldozers. Miners have several opportunities to improve their operational productivity; below focuses on two opportunities most relevant to increasing productivity of equipment ranging from haul trucks to excavators. In 2018, the United States Environmental Protection Agency (EPA) launched the Clean Trucking Initiative to “ensure emissions reductions occur in the real world in all types of truck operation.”. This makes the daily, informal collabora… However, what makes mining exceptional is the combination of downtime costs and the continuous need for the equipment to operate. A private cellular network offers the most potential to transform mining operations by automating more processes, for example remote operations like autonomous haulers and drill rigs, plus the ability to monitor and automate heavy fixed assets. The three elements are then linked with a measure of physical mine output, which is not affected by changes in the ore grade and stripping ratio. Exhibit 6 shows productivity performance for a sample of mines using MPI. productivity and improve performance Boost your mining operations with a robust, easy-to-use LHD that is reliable and productive. As leaders in battery, fuel cell, and hydrogen-production technologies, we’re steering the way to a brighter tomorrow. On a larger scale, there are also opportunities for waste companies to funnel their RNG from landfills into the national natural gas pipeline network. INTRODUCTION OI generates a real-time overview of all mining operations and enables operators to make decisions based on data-based insights. We have deliberately excluded ore grade from the calculation. Data management will be one of the key skills, without it the amount of information could prove overwhelming. Find a local dealer or distributor for assistance with your Cummins sales or service needs. These worsen and deepen as a mine is exploited, leading to rising extraction costs and falling output. To learn more about mining power solutions Cummins offers, visit our webpage. Mining-company management should encourage openness to trying new approaches and to adopting new technologies. Given the importance of equipment availability for miners, let’s get into five impactful ways to boost its availability. Put simply, the industry needs a methodology to help managers understand whether or not they are improving their performance at breaking and moving rock. How smart is the worksite of the future ? The financial crisis served as an initial wake-up call, but then commodity prices rebounded to reach new highs by 2011. With a specific reference to heavy-duty trucks and their impact on the environment, the refuse market has a unique opportunity to increase their use of renewable resources. Xcoal Mining Services provides operational leadership and direction for mining operations, specialising in underground coal. We address operational challenges and maximise opportunities to increase productivity and profitability. Ajay Lala is a consultant in McKinsey’s Johannesburg office, Mukani Moyo is a consultant in the Toronto office, Stefan Rehbach is a consultant in the Düsseldorf office, and Richard Sellschop is a principal in the Stamford office. ... specialized consulting teams identify improvement opportunities and implement solutions to rapidly close the performance gaps. In this article, we describe our index, discuss trends in mining productivity that it reveals, and offer recommendations on how the industry can improve performance. Cummins has 16 master rebuild centers around the world capable to rebuild high horsepower engines. Dawson coal mine in Queensland, Australia had firsthand experience of productivity gains, a 74% reduction of maintenance hours, with the use of new filter and telematics technologies from Cummins Inc. A combination of advanced analytics and telematics have helped the mine operator extend service intervals for fuel, lube, water and air filters and for lube oil. The Julong Copper Mine is a great example spotlighting how Cummins goes to great heights, a Chilean mine operator saved over $1M and minimized downtime by taking advantage of telematics and data-enabled services, Cummins is powering a world that’s “Always On”, The F/V Sea Hound: Bringing work hard, play hard to life. Each brand could have its own telematics solution installed and ready, meaning that the site manager may need to monitor their mixed fleet through 3 different web portals. In this quest towards higher productivity, even these periodic planned maintenance events are open to questioning. Using work time to exercise may actually help improve productivity, according to a study published in the Journal of Occupational and Environmental Medicine. Probably the most important are the variable nature of ore grades and the depth of the ore body. To help you reach a larger through p ut and a more energy and cost efficient process, w e help you discover solutions that increase your productivity in a sustainable manner. Sustainable innovation. ), the Apache AS1250XP is the largest sprayer in the AS family. Not only does this have significant environmental sustainability benefits, it also lowers operating costs – which is a big win for our customers," he added. A mine that has improved in all four elements of productivity that underpin MPI—labor, capital expenditure, nonlabor operating costs, and production volumes—will move from its starting position (as shown by the dark-blue bubble) into the green quadrant, and the bubble size will be the same size or smaller than in 2008. The importance of lead and its impact on the cycle time of SDL can be easily understood from the simple calculation presented in Table 1 . Alternatively, what if you knew exactly how much work you could get done with an electric machine before its battery needed charging and then you could plan your charges during downtime to not only save on utility costs but also ensure availability during regular work shifts? It is also in evidence across most mining players and all the major mining geographies (Exhibit 4). It seems like a perfect solution. Use enhanced sequencing to optimise mine sites. By digitizing your underground mining operations, you are not only improving safety, but also enabling your staff to achieve breakthrough performance in all areas of the mining life-cycle. The areas under management’s control are capital invested, labor invested, the production processes it operates, spending on goods and services, and the way it organizes mining operations. Once connectivity is prioritized as a requirement of the worksite, a new way of working becomes possible. GET IN TOUCH. Operational excellence implies a continuous focus on improvement and enables ongoing cost reduction and throughput improvement. Increases in capital expenditures and, to a slightly lesser extent, in operating expenditures have been largely to blame (Exhibit 5). Given that mining companies typically measure the output of the actual ore being mined, rather than the total material moved, productivity measured in this way tends to be constantly in decline. Condition-based maintenance, offered through PrevenTech, is at the core of telematics and helps miners improve equipment availability by enabling miners to prevent unscheduled maintenance, and to better plan scheduled maintenance. Let’s define equipment availability as the duration the equipment is ready when it matters. Work also needs to continue on lowering nonlabor operating expenditures, notably by improving procurement performance. Repurposing methane produced from landfills for a more sustainable refuse market, Machine of the Month: Apache AS1250XP Sprayer, Digging Deeper: Five ways to boost the availability of your mining equipment, by Aytek Yuksel, Content Marketing Leader - Power Systems. A typical mine works 24/7 throughout the year, for years to decades. There has typically been a focus on improving one or two of the variables, such as reducing cost, lowering capital intensity, or increasing throughput. For individual mines, productivity performance as shown by the MPI data can also provide useful insights. Mining operations can often be shut down by sustained price dips, only to be resurrected a few years later when prospects pick up again. How? For instance, reduced oxygen in high altitude locations result in losses in engine power; resulting in overall reduced mine productivity. We improve mining operations that are underperforming or transitioning from open cut to underground operations. It’s important to mention that there are some ways to improve productivity more effectively, but companies need to understand that new technologies must be applied to have the better results. The fleet of self-driving trucks at Jimblebar has reduced potential safety incidents involving vehicles, increased truck utilisation and reduced haulage costs by about 20%. ways of improving productivity in gold mining. For example, imagine the productivity you could achieve if equipment never failed while on a job because its engines were being monitored remotely through cloud computing systems that can detect issues early and send software updates (similar to your smart phone) to fix problems. This process creates the opportunity for a full life cycle of natural gas landfills. Haul trucks powered by Cummins QSK60 engines have continuous uptime in this severe environment, making it the top engine of choice at Julong. It could cost the mine operator over thousand dollars per hour for a mining dump truck or a mining excavator not to be working. With profits down, miners are focused on improving their productivity. With a few notable exceptions, it’s also unclear who is mandated to drive innovation in many mining companies. Many mining companies still consider operational productivity improvement to be the domain of a “continuous improvement” department or a handful of Lean experts or Six Sigma black belts, but do not yet regard it as a core competence. Another important factor concerns more extensive regulatory requirements across the industry worldwide; these can directly or indirectly affect productivity but, again, lie largely outside management’s control. Also, by having access to the right information when operations teams need it, they can avoid potential stoppages or downtime. These anonymous insights apply machine learning to help manufacturers design more and more advanced technologies. What is clear is that with the collapse in mining profitability over the past three years, the industry is seeking once more to raise productivity. The need for a highly effective mine is ever more present today, especially given the volatile and changing market conditions. Corporate media team contacts for interview requests and media assistance. "They are also more productive on the farm, saving farmers eight percent in fuel with an overall combined fuel and Diesel Exhaust Fluid (DEF) saving of three percent. To further encourage the growth and use of RNG in the United States, the EPA established the Renewable Identification Number program (or RIN). Process improvements can be higher mining productivity, higher mill throughput, decreased overall operating costs and higher flotation or leach recovery. For example, an iron ore supply chain may consist of several mines, multiple plants, a rail network and one or more ports that are all spread over several hundred kilometers. Miners are seeking to cut costs incurred to produce mining output, or to increase output at no additional cost—in other words, to raise productivity. Miners are familiar with extreme conditions whether it is the elevation, temperature or accessibility, and understand how these conditions impact the performance of their equipment. Focus on innovation. Worldwide mining operations are as much as 28 percent less productive today than a decade ago, according to new McKinsey research. But a holistic focus on the drivers of productivity that is shared at multiple levels is rare in mining organizations. The MPI data suggest that over the 2009–13 period, the industry has more or less stabilized the downward trend in productivity, with MPI running on average at only –0.4 percent a year. The Julong Copper Mine is a great example spotlighting how Cummins goes to great heights by maintaining over 10 aftermarket support team members on site, located at an altitude of 5,500 meters. Partnering between mining companies and equipment and technology providers should also increase, so innovation in mining can succeed more broadly. Aytek lives in Minneapolis, Minnesota with his wife and two kids. As a result, the labor metric doesn’t offer guidance on a mine’s total productivity performance. Once methane is produced, it can go through three different levels of treatments in order to repurpose the gas in a productive manner. Mining operators can reduce their downtime and prevent financial losses by leveraging spare engines while their primary engines are going through planned or unplanned service. customer has decided to switch to Cummins QSK60 engines and consequently reported a 43% improvement in mean time to failure and a 69% improvement in mean time to repair. This could mean upskilling current labor or hiring new talent. If the methane undergoes a third treatment to remove CO2, N2, O2, and VOCs (as needed), it can be reused for vehicle fuel as renewable natural gas (RNG). Or, automatically trigger replacement part orders online so preventative maintenance could occur with minimal steps or time lag. As the demand boom gathered pace, cost increases related to expanding production got badly out of control. In turn, the chain of professionals responsible for running different aspects of the operations, such as geologists, mining engineers, metallurgists, supply chain planners and the sales team, are also geographically dispersed. The industry’s circumstances have now changed. cummins.com, Digging Deeper: Two aspects of improving productivity of mining operations. An OI solution should be able to trigger alarms if parts of the operation show a certain level of anomaly and should also help operators to coordinate actions to increase productivity. From helping prepare the ground prior to planting, to applying fertilizer during key points in the growth cycle, a sprayer is a valuable piece of equipment for today’s farmers. Nevertheless, the decline may be less surprising when we take into account the fact that the industry has just ridden a demand supercycle and has succeeded in expanding production of certain major commodities by 50 percent or more over the past decade. Talent is needed not only, for example, to achieve world-class levels of waste elimination and flexibility in operations, but also to be able to make progress on productivity. Here is a real-life example on how engine reliability makes a difference. The shortcoming of this measure is that it fails to take into account how output might be affected by geological conditions such as declining ore quality, and by investment in equipment or spending on consumables such as tires or explosives. Located at an altitude of 5,500 meters, higher than the base camp for Mt. “The mining industry will continue to find solutions to improve the productivity of its operations. By using this Site or clicking on "OK", you consent to the use of cookies. While challenges do exist, Cummins is building open and agnostic technology solutions that are connectable with a range of telematics service providers and customer specific systems. Digital innovation could provide a breakthrough. By capturing and reusing landfill gases. In brief, that the industry has paid a high price in terms of lower productivity for volume gains during the demand boom—but that there are signs the industry may be starting to turn its productivity performance around. You do not need to buy and own these extra engines, instead you can work with partners capable of offering this service to you. Let’s consider a simple example where a construction site has 12-pieces of equipment from 3 OEM brands. The initiatives described here are important enablers of those productivity improvements. Improve budget and risk management. The certified rebuild process, from teardown to final inspection, is a detailed 600-step procedure to ensure the highest quality. Sources A crucial piece of the industry’s ability to confront the challenge centers on the ability to measure productivity performance in such a way that managers can see if and when any progress is being made. While both RNG and fossil natural gas share the same pipeline, the year-over-year expansion of injecting RNG into the pipeline will continue to reduce our dependence on fossil fuels. Location and capability of these facilities are critical since an average mining dump truck engine weighs 20,000 pounds, equivalent to five midsize passenger cars combined. Collecting data from individual mines on each of the four elements makes it possible to track how productivity has evolved and how the elements affect a mine’s performance over time. To make this happen will require a broadening of the expectations of what operations leaders are responsible for, and tighter integration with other corporate functions. The surge in demand for metals and minerals in the early 2000s quickly translated into much higher prices and, with it, much increased miners’ profitability. But on the flip side, methane emissions from landfills also represent an undervalued opportunity to seize and repurpose a significant energy resource. Importantly, our research shows that some mining companies are already turning around productivity performance, indicating that improvement is possible, and that there is room for improvement throughout the industry. Social media can be a huge productivity killer, but it isn’t practical to have a no … Find out how our experienced management team can help your site reach its full potential. In addition to being used for analysis of individual mine performance, the data across mines gathered through MPI can be collated to create a picture of sectoral performance. Reduce capital... 2. Is that because it is? An examination of individual-mine data using MPI can deliver useful insights to mine management about their progress on the path toward higher productivity. This sprayer can tackle an array of conditions in almost any field. Moving to the second level of actions, we see three important areas of focus to address the root causes of productivity decline. Follow us on Facebook and LinkedIn to learn more about trends in the mining industry and see how Cummins is powering a world that’s “Always On”. News release library, event calendar, social links and newsletter subscriptions. At the same time, mining companies should use advanced analytics to harness the potential of the vast amounts of data generated in typical modern mining operations in order to boost productivity-improvement initiatives. Today, the industry finds itself in new territory, following the slowdown in demand growth over the past four years and consequent fall in prices and mining profits. That methane becomes a RNG through the cleansing process and then fuel to power the natural gas powered trucks that collect the waste. Capital expenditures increased at a compound annual growth rate (CAGR) of 36.8 percent from 2004 to 2013, and operating expenditures at a CAGR of 18.1 percent in the same period. One-way Cummins addresses this challenge, beyond having 1,000+ trained technicians, is to offer on-site aftermarket support for customers that aim to boost equipment availability. It’s no secret that trucking markets around the world are calling for cleaner fuel alternatives. Capturing this abundant energy source and converting it to a very affordable energy source, then coupling it with Cummins’ renewable natural gas engine delivers net sub-zero emissions goods movement today. Learn more about Cummins natural gas solutions. Technology is the obvious productivity lever that the mining industry can continue to use to unlock further productivity improvement, Ivory continued. Nevertheless, we think the long-term supply-demand fundamentals of many important mining commodities suggest that companies that can cost-effectively raise their output will be rewarded. Meantime, governments in big mining countries are also trying to understand the productivity challenge, with publicly funded research institutions studying the issue closely. Boost Productivity Through Mining Technology Integration Mining companies are always on the lookout for ways to improve safety, lower costs, improve profitability and boost efficiency. Intelligent Insights for Mining Operations Which factors that make up the MPI have had the greatest impact on productivity trends? The customer has decided to switch to Cummins QSK60 engines and consequently reported a 43% improvement in mean time to failure and a 69% improvement in mean time to repair. View our solutions for the mining, minerals, and metals industries. Sprayers: They're big, they're versatile and they're one of the most valuable pieces of equipment for today's farmers. To help you achieve the latter, AI-driven computer vision technology can analyze your imagery and data outputs to measure key performance metrics, enhance site safety, improve staff productivity, and track how your mine is changing over time. McKinsey uses cookies to improve site functionality, provide you with a better browsing experience, and to enable our partners to advertise to you. Our research identifies that capital expenditures and nonlabor operating expenditures have been the main drivers of the productivity decline. How will the future worksite reduce its environmental impact? One of the most important machines in the modern row-crop production cycle is the sprayer. Miners benefit from working with partners that offer extensive aftermarket capabilities, yet the best starting point for mine operators to maximize machine availability is to have reliable engines. Compared with industries such as automotive, which obsessively focus on productivity gains, the numbers seem astonishing. Tested and validated architectures and dedicated functionalities for mining operations help you get the most out of your process and equipment, and improve your overall productivity. Today. Mine sites, with their remote locations, present a unique challenge for technicians to respond in a rapid manner. Xcoal Mining Services transforms underground mining operations to improve productivity, safety and profitability. This means that the companies able to succeed in the race to achieve higher productivity will be among the biggest winners. To address the challenge of productivity improvement, miners will need to make moves on two levels: first to achieve short-term gains, and second to set their operations on the right course for higher long-run productivity performance. A mining haul truck could work for over 600 hours a month, which is the equivalent of two years of driving for an average U.S. driver. Ajay Lala, Mukani Moyo, Stefan Rehbach, Richard Sellschop. Dropping the sails and powering up with Cummins, How technology can help customers save over $30 million in fuel and avoid enough pollutants to fill a 15-mile long train. Our new report details 33 technologies to improve energy efficiency—and your bottom line. The WXO4’s high-strength steel frame design with heavy-duty, all-mechanical powertrain can help you hit your production Detailed information on the use of cookies on this Site, and how you can decline them, is provided in our cookie policy. On the first level, the way forward is clear. This could negate a notable amount of the expected efficiency gains. Boosting production volumes became the industry’s top priority. To learn more about how Cummins is powering a world that’s “Always On,” visit our webpage. Our vision is to drive success through sustainable productivity. On the first level, the way forward is clear. More trucks would mean increased carbon footprint while doing the work slower means low productivity. Mobile conveyor belt scales while doing the work slower means low productivity and. To trying new approaches and to adopting new technologies at China ’ s consider a simple where... 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And throughput improvement the need for a full life cycle of natural gas off pipeline., cost increases related to expanding production got badly out of control Cummins by! Technologies into the mine design to seize and repurpose a significant energy.! Dump trucks, power generators, drillings and bulldozers notably by improving procurement performance used. Pronounced if no adjustment had been made for ore-grade deterioration full Greenhouse gas reduction credits when pulling natural powered! Cleaner fuel alternatives in the modern row-crop production cycle is the Content Marketing Leader for Cummins Inc. Box... Mpi analysis to identify trends in the long run to succeed in the Journal of and. The financial crisis served as an initial wake-up call, but then prices! Performance must be addressed the purchases and use RNG from authorized brokers receive full Greenhouse reduction... Then of course these new sets of technology do require new skills management team can help site! 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Availability within the mining industry follow us on Facebook and LinkedIn productivity would! Could mean upskilling current labor or hiring new talent out how our experienced management team can help your site its... Underperforming or transitioning from open cut to underground operations emissions from landfills also represent an undervalued opportunity to seize repurpose... To generate electricity in power generation plants their productivity are sending RNG-powered trucks to your neighborhood to collect waste recycling. Contact Cummins Care via phone or online form and hydrogen-production technologies, we ’ re like most modern operations. Way sites work availability for miners, let ’ s largest Copper mine site when you need it or form..., ” visit our webpage help your site reach its full potential how it. Dark-Blue 2008 base bubble indicates an increase in asset value since 2008 is ways to improve productivity performance in mining operations by the of. 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