Improving performance through benchmarking
SRK Russia was engaged by a local client to review several of its iron ore operations, open pit and underground, to determine what increases in capacity could be achieved through removing bottlenecks in its current operations. The operations included open pit and underground mines, dry and wet magnetic concentrating facilities, sinter plants and a pelletizing plant. The deposits, which are mainly skarn-type, principally contain magnetite ores.
For this assignment SRK assembled a team of experienced mining and process engineers and financial analysts to visit each site, review the statistics available and to benchmark the current operations against international practice. The client was actively involved in the process and members of the client’s own Operational Process Enhancement (OPE) team joined SRK’s team in the visits and discussions.
Through a process of benchmarking the key parameters for each part of the production cycle, the SRK-OPE team was able to highlight which bottlenecks could be removed relatively easily and what the optimal production rate for each site was. This identified opportunities to increase productivity by between 11% and 30%, adding $400m to the value of the company. The types of gains included:
- Removing artificial cash constraints enabling the buildup of a reasonable stockpile of spares to improve equipment availability
- Understanding the economic impact of specific key performance indicators
- Sharing information between the company’s own operations to highlight best practices
- Buying modern mining equipment to improve development rates and improve the utilization of the ball mills
- Balancing the mining fleets to use spare capacity
- Using modern technology to optimize the pit design and mine plan
- Improving the approach used to evaluate equipment purchases
Whilst some of these improvements can be implemented easily through specific purchases or “hard” changes, SRK’s engineers can also provide the support needed to implement the more technically difficult changes, such as optimizing the pit design. In addition, SRK’s engineers can help set up the systems to support ongoing performance monitoring and investment analysis, which the client’s own teams can use into the future.
David Pearce: email@example.com