Category: Mines and Quarry

Cadia mine’s 1 SAG mill is back in operation following a breakdown earlier this year.

The mill broke down in late October, raising some concerns as the 1 SAG mill processes more than two thirds of all throughput at the mine.

According to Newcrest the issue has now been rectified.

“Following repairs and a period of operational testing, Concentrator 1 SAG mill at Cadia is now operating at full capacity,” Newcrest said in a company statement.

This is well ahead of the December target some in the market put forward for eventual repair.

“Engineers have determined that he mill motor will eventually require a full rewind,” Newcrest added.

“The timing of the rewind will be subject to the availability of long lead time parts and will be incorporated into the maintenance schedule when it is considered convenient or appropriate to do so,” it said.

“Installation of the conveyor to bypass the mill, transporting ore from the high pressure grinding rolls to the ball mill circuit, remains on schedule to be completed in early December 2015; this will provide future operating flexibility.”

The stockpiles of ore generated during the mill’s downtime over the last five weeks will reportedly be processed by the end of the current financial year, meaning Cadia’s cost, capital, and production guidance is unlikely to be significantly changed.

Newcrest Mining Ltd Quarterly Report

Mining companies across the world face challenging market conditions including price volatility, rising costs, and a lack of financing.

According to the Australian Government’s recent Resources and Energy Quarterly, a combination of weak growth in consumption and strong supply growth placed considerable downward pressure on commodity prices in the first eight months of 2015.

The downturn in commodity prices has pushed many companies to implement cost cutting programs to remain profitable.

Now more than ever, there is pressure for mining companies to increase value by leveraging new technologies such as the cloud, automation, analytics, artificial intelligence and mobility.

These technologies have created an entirely new ‘As-a-Service’ business model, where the whole is more powerful than the sum of its parts.

This is the ‘Power of AND,’ integrating software, infrastructure AND business processes on demand, providing companies with plug-in, modular, scalable AND consumption-based services.

Adoption of this model is allowing mining companies to receive plug-in, modular, scalable and consumption-based services, which in turn enable more agile, robust and cost-effective business services.

Though the As-a-Service model provides a number of opportunities for larger businesses, it’s largely under-utilised, according to a recent study from Accenture and HfS Research.

Results from a survey of more than 700 enterprise service buyers, advisors and service provider executives revealed that all Asia Pacific enterprises surveyed saw the As-a-Service economy as significant for their organisation, with 23 per cent saying it is critical.

Despite this, only 8 per cent believe their core enterprise processes are currently delivered As-a-Service, and almost half (46 per cent) do not expect their core operations to be delivered via the As-a-Service model for at least another five years.

The research suggests that small and medium sized enterprises are more likely to adopt this model, meaning larger companies may be at risk if they do not look to move away from older models to keep up with evolving business practices.

Rio Tinto is one example of a large mining company adopting an As-a-Service business model solution.

Moving to a new information systems and technology delivery model, Rio Tinto is merging core enterprise information systems and technology to a cloud-based, As-a-Service solution.

The program will include the modernisation of the company’s existing enterprise resource planning and information management platforms, and consolidate and host these applications on the cloud.

Due to the increased business agility – in addition to the cost flexibility and lower infrastructure prices that are inherent in cloud services – Rio Tinto expects to find substantial cost savings with the adoption of the new model.

Costs are also flexible due to the pay-for-use pricing, and services are scalable based on business demand.

Rio Tinto’s move to the modern business model demonstrates the ways in which mining companies drive innovation and value from an As-a-Service model.

Modular designs allow mining enterprises to mobilise and demobilise their services rapidly as necessary, to choose the service levels and create variable cost models inside their own business. By using this approach, mining enterprises can ‘plug in’ to access services quickly in a matter of weeks or even days.

The model is also scalable, so companies can ramp up and down their activities to match actual business volume needs.

Overall cost reduction is another major benefit – for a significantly lower total cost of ownership, buyers can access up to date software platforms, rather than implementing them from scratch. In addition, with this model companies only need to pay for what they actually use, rather than having to commit to functionality and capabilities they may not ever need.

The model operates on a basis whereby both buyer and provider make the commitment to achieve specific business outcomes.

The vendor agnostic nature of the As-a-Service model is another useful feature for many companies.

They benefit from the knowledge and experience of a number of IT providers, and assemble a combination of solutions that work to achieve the desired business and performance outcomes.

The competition ensures providers are committed to innovations in business processes, which protects the buyer from potential problems stemming from upgrades and change.

Procurement is a business process that can benefit immensely from an As-a-Service delivery model. A recent Australian report from Mining IQ identified procurement as a critical area for mining companies to optimise costs in order to survive in the volatile market.

The respondents in the survey ranked the automation and standardisation of procurement processes to improve efficiency as the number one priority for mining procurement activities in 2015. Despite this, only 38.5 per cent of respondents were found to have automated functions in their supplier and purchasing processes, while 34 per cent of respondents indicated automation of procurement processes was not even on their radar for the near future.

The banking and finance industry is an example of a sector achieving greater efficiency and value in procurement through the As-a-Service model.

For example, Deutsche Bank is undergoing a procurement transformation, automating its source-to-pay process, including invoice processing and contract compliance management and migrating the bank’s current on-premise procurement IT platform to an on-demand, cloud based solution.

This update has helped Deutsche Bank demonstrate a 15 per cent savings in both procurement operations and operational IT costs.

As a result, the bank has seen improved cost control, faster procurement processing and a streamlined transaction process. Mining companies could achieve similar value in their procurement process by applying the As-a-Service approach.

Adopting the As-a-Service model is not always an easy task for large companies.

Learning how to buy services piece by piece, creating awareness in the organisation about changes to the overall strategy and addressing talent gaps in areas like analytics and automation are challenges faced by many organisations.

Whilst the As-a-Service model will require strong leadership it is what is needed to drive future cost savings, increase productivity and achieve world class operations. The challenge for miners is when, not if.

*Nigel Court is Accenture’s Asia Pacific Mining Lead.

Hexagon Mining has been contracted to supply its MineSight mine planning software to three European customers.
Hexagon Mining’s London office has won contracts with Turkish companies Alacer Gold and Polimetal Mining, and Ellatzite Med of Bulgaria, who will be using MineSight software for their mine planning needs. All three companies chose Hexagon Mining for its proven technology and customer service.
Baris Cakir, Chief Planning Engineer at Polimetal Mining in Ankara, Turkey said Hexagon Mining’s strong planning tools and very flexible MineSight Implicit Modeler were key reasons behind their decision to choose the software. He added that Hexagon Mining also delivered high quality customer service including using Turkish speakers and providing excellent technical support.
MineSight software is used widely in Europe, especially in Turkey and not only in the country’s mines. Istanbul University has adopted MineSight for mining courses while interest in MineSight-related studies has been so high at Osmangazi University in the northwest Turkish province of Eskişehir that new courses have been added and more licenses dispatched. Dr Mahmut Yavuz and Dr Mehmet Aksoy use MineSight in the school’s undergraduate elective course, Computer Applications in Mining, which covers open pit mine design.
The popularity of the course prompted Osmangazi to introduce a second course for computerised underground mine design. According to Dr Yavuz, MineSight is the best software in the mining industry to design underground and open pit projects.

An equipment supplier recently opened its new headquarters to the quarrying industry to celebrate its 25th anniversary and the launch of several new partnerships.
More than 200 people attended the OPS Group open day event, which was held from 5 to 7 November at the company’s new Jandakot headquarters in Perth, Western Australia.

OPS general manager Craig Lorimer explained that the company had opted to move to the new facility to consolidate its presence in Perth. OPS formerly had three locations in the Kewdale area.

”OPS Group is now operating from one premises,” Lorimer said. “This allows us to streamline our operations so we can be more cost-effective to our clients and, with recent partner agreements, offer a wider range of solutions to our customers.”

As previously reported by Quarry, one of these agreements involved the distribution of Terex Environmental Equipment (TEE) and Kiverco Recycling Plant’s products through the company’s new division OPS Environmental Equipment, which was unveiled at the open day event.

Commenting on the launch, OPS group sales manager Kieran Hawkes said, “We received particularly good feedback [from attendees] on the new environmental equipment division because it really covers two ranges: it includes TEE, which offers a lot of processing – especially screening – products, as well as the Kiverco range of recycling equipment.”

During the event, the company announced an additional distribution partnership with Osborn, a South African-based company that manufactures crushing and screening plant. OPS previously only supplied mobile equipment, and Hawkes said the addition of Osborn to the company’s portfolio meant it could now offer modular and static equipment to its quarrying customers as well.

“As the product is manufactured in South Africa, its suits the Australian market very well because it’s very robust and has to work in similar conditions,” Hawkes stated, adding that the entire comprehensive range of equipment from Osborn would be available under OPS’s mineral processing banner.

Beyond the new developments, the supplier’s existing brand partners were also well represented, with the new Terex Finlay C-1545 tracked cone crusher positioned as the centrepiece of the event’s static display.

OPS was established in 1989 and distributes OEM equipment to the quarrying, mining, construction, earthmoving, recycling, materials handling and materials processing industries nationally from its facilities in Perth, Darwin and Adelaide.

Tropicana is looking to the coal sector for an innovative approach to extend its mine life, in a joint venture with owners AngloGold Ashanti and Independence Group to use “strip mining” principles in open-pit coal mining.

If the concept proved feasible, Tropicana’s two main pits, and other satellite pits could be turned into a singular pit that would rival the size of the Super Pit in Kalgoorlie.

AngloGold Ashanti Australia senior vice president Mike Erickson says the success of the project depends on whether there is enough gold between the two pits to justify linking them up.

“In my mind it is like the Golden Mile [in Kalgoorlie] with the consolidation of all those ore bodies that were owned by different parties,” Erickson said.

“I think it is very much a defining moment [for Tropicana]. You would then be cementing a 20-year mine life, a major centre and it would be very significant. It is a massive step change.”

The study would also seek to determine whether mining costs could be lowered enough to make it feasible and what engineering and equipment would be required, with completion expected by the end of 2016.

Tropicana produced 118,204 ounces in the September quarter at an all-in sustaining cost of $US674 an ounce and was one of the key international operations credited for adding lower-cost ounces to the company’s production base.

At the end of September, AngloGold’s net debt was $2.3 billion compared to $3 billion at June 30 after it used funds from the sale of its Cripple Creek & Victor mine in Colorado to repurchase high-yield bonds.

AngloGold abandoned plans for a $2.5 billion demerger last September after investors fought the move.

Famed Australian economist Saul Eslake has voiced his scepticism about the possibility of another mining boom, saying there may never be another like the last.

Speaking at the International Mining and Resources Conference in Melbourne yesterday, Eslake said the downturn in commodity prices had probably not yet reached the bottom of the trough, SMH reported.

With the last boom tied the economic boom in China, Eslake told the mining business community that there was little prospect of that being repeated in the future, and that despite growth in other nations, none could match the impact of population growth in China.

“The countries that are still to develop are much smaller than China and India are, they are not, in most cases, starting from as far back on the development curve as China was in 1979 or India was in 1991, and most of them are much more self-sufficient in commodities than China or India ever were,” he said.

“So it could well be, in my view, that the commodities boom Australia has just experienced in the last 12 or so years is the last of its kind in human history unless unforeseen technological developments ordain otherwise.”

Eslake predicted that iron ore and coal would continue to experience further downside for the next one to two years.

“In the case of iron ore and coal in particular I don’t think we have seen the bottom of prices yet even though there may be some basis for being a bit more optimistic about the outlook for base metal prices,” he said.

“In the case of coal Australia is not necessarily in the most favourable position in international cost curves, and maintaining Australia’s competitive position in coal and in other energy commodities, LNG among others, will be a major challenge for the boards and managements of Australian companies this year and for the forseeable future.”

Phil Arnall, the new chairman of mining services firm Bradken, recently predicted the mining sector downturn was likely to last until 2018, with the company basing all planning on that outcome.

Bradken shares hit a record low on Tuesday, dropping 4.2 per cent to 91c at close of trade; 12 months ago Bradken was trading at $3.85.

The new chairman of battling mining services and engineering firm Bradken says the downturn in the mining sector is likely to last until 2018 and the company has done all of its strategic planning based on that bleak scenario.
Phil Arnall, who took over as chairman from Nick Greiner on Tuesday at the completion of Bradken’s annual meeting in Newcastle, says business is even softer than it was in June this year, when the company opted for a $70 million balance sheet injection from Chile’s Sigdo Koppers and private equity firm CHAMP, and embarked on merger talks that ultimately amounted to nothing.
Mr Greiner, a former NSW premier from 1988 to 1992, had served on the board since 2004 and his departure comes as Bradken shares hit a record low on Tuesday after the company revealed a continued poor outlook and said that subdued order intake from customers would mean sales revenue in 2015-16 would be below 2014-15.
Bradken shares tumbled to 89¢ in intra-day trading before closing at 91¢, down 4.2 per cent for the day. Bradken shares were at $3.85 this time a year ago.
Managing director Brian Hodges, who is preparing to depart at the end of calendar 2015 after 18 years running the company, told Fairfax Media after the meeting on Tuesday that orders were at low levels but had stabilised.
“Order intake’s been relatively lower but stable,” he says.
Mr Hodges also says that Bradken is progressively selling off about $30 million in surplus assets, mainly property holdings, to cut debt in a difficult market.
Two other Bradken directors, Eileen Doyle and Peter Richards, resigned from the board on November 6. New York hedge fund Litespeed Management holds 11.9 per cent of Bradken and has been increasingly influential.
Mr Arnall said in his speech to shareholders the “last few months have been very sobering” and “we have felt the discontent of our shareholders”.
“Partly as a result of this, there has now been significant change to our directors,” he said. The search for a replacement for Mr Hodges was continuing for a “suitable person” to replace him by the end of the year.
Sigdo Koppers and CHAMP had a 60-day exclusivity period to try and hammer out a merger deal with Bradken from June, 2015. But the merger talks were officially called off at the start of September with the Bradken board refusing to grant a request to extend the 60-day period.
Mr Greiner was in an uncomfortable position because he had dual roles at both CHAMP and Bradken. He is deputy chairman of CHAMP. He removed himself from discussions on the merger proposal by appointing a three-person independent committee from Bradken

Research from Business News found that five significant ‘greenfields’ mining projected, worth $760 million, have started development in the past year.

Looking ahead to 2017, there might be only one major new mining project although there have been no guarantees.

In Deloitte Access Economics’ latest investment monitor, the value of definite projects (under construction or committed) across Australia fell to its lowest level in four years. This resulted in engineering activity contracting in nine of the past 10 quarters.

Industry veterans who have lived through multiple cycles are not worried, however. Instead, they are laying the groundwork for the next wave of mining projects that will commence when commodity prices and financial markets improve.

The two mega projects still under construction include CITIC Pacific Mining’s Sino Iron project, and Hancock Prospecting’s Roy Hill development.

Roy Hill is on the brink of celebrating its first shipment, while Citic has reported good progress on commissioning and construction activity.

The next greenfields project in iron ore is likely to be Rio Tinto’s Silvergrass mine, expected to cost about $1 billion -resulting in the iron ore majors spending millions each year on sustaining capital expenditure.

A quarry equipment supplier will celebrate a new distribution partnership and its 25th anniversary at an open day event next month.
OPS Group will host the event at its new Jandakot headquarters in Perth, Western Australia from 5 to 6 November, opening the facility up to customers as well as the wider public.

“This is the perfect opportunity for OPS to celebrate both our strong and very proud history, as well as our bright future with the launch of some exciting new product lines and expansions to existing lines,” OPS director Shane Czerkasow commented.

“We expect the schedule to attract a broad cross-section of industry participants and look forward to welcoming a host of international, domestic and local suppliers, customers, industry stakeholders, dignitaries and media to our events.”

In addition to showcasing some of the latest quarrying equipment through presentations and demonstrations – such as the Terex Finlay C-1545 tracked cone crusher, Terex Washing Systems FM120C Fines Master and Tristar crusher and safety tooling – the event will also act as a launch pad for the business’s new division, OPS Environmental Equipment.

The perfect partner
OPS Environmental Equipment will supply products from Terex Environmental Equipment (TEE) and Kiverco Recycling Plant, including trommels and recycling screens equipped with Spaleck-branded technology. The new division will also supply machinery for the wood processing and biomass production sectors.

“The market is really embracing the recycling, wood processing and biomass production segments at present, and we believe the timing is perfect for OPS to enter this space,” OPS group sales manager Kieran Hawkes explained. “Great equipment requires great back-up and support, and we believe this is a well matched partnership that will deliver quality outcomes for customers of these industries.”

Tony Devlin, TEE’s global business line director, also expressed his excitement for the strengthened partnership between Terex and OPS. “OPS’s demonstrated ability to offer innovative, quality products and services makes them the perfect partner to support customers with applications, support and service,” he said.

TEE’s Ecotec range and Kiverco’s recycling plant will be amongst the machinery on show.

Since its establishment in 1989, OPS has expanded to become one of the largest distributors of OEM equipment to the quarrying, mining, construction, earthmoving, recycling, materials handling and materials processing industries.

Through its facilities in Perth, Darwin and Adelaide, OPS distributes equipment to quarries nationwide from manufacturers including Terex Corporation, Telestack, Kiverco, Tristar and Banlaw.