Digging Deeper: Tackling the affordability challenge in the mining industry with these three improvements
With the cost of $50,000 for a single tire and consumption of up to 30 gallons of fuel an hour, it could cost over a million dollars a year to operate a mine haul truck. With such high costs and almost continuous use of equipment, even small improvements yield into major affordability gains for miners.
Let’s define affordability as minimizing the cost to acquire, maintain and dispose the equipment, This first became a focal point for the mining industry at the end of the commodities boom in early 2000’s and continues to be a key focus point to this date. Given the extensive utilization of mining equipment, the primary driver of affordability is on-going costs such as fuel and consumables. For some Cummins Inc. customers, fuel cost by itself is 70% of an engine’s life cycle costs and about a quarter of equipment’s total cost of ownership.
Given the importance of affordability and its significant financial impact, let’s outline three ways the mining industry improves affordability.
No. 1: Leverage fuel savings to improve financial performance
As the fuel continues to be the primary cost for operating the mines, it also offers significant opportunities for savings. One might, inaccurately, think the increasing focus on lowering emissions could increase fuel consumption. In fact, our experience at Cummins shows the exact opposite where most of our newest Tier 4 Final engines (over 751 horsepower) offer up to 3 percent to 5 percent better fuel efficiency than our Tier 2 engines with no compromise to engine power and reliability.
Our partners have experienced similar fuel savings across different applications. Check out how an iron ore mine that uses 850 million liters of diesel a year has experienced savings worth millions of dollars a year, by combining component technology from both Cummins’ Tier 2 and Tier 4 Final engines.
No. 2: Reduce the use of consumables beyond fuel
A regular mine truck has a capacity for over 400 gallons of consumables, while your car might have only a few gallons of consumables. Beyond the liquid consumables, mine trucks also have fuel, lube oil, air and water filters that get changed every 500 to 1,000 hours (about once a month).
Potential savings grow rapidly when you add up the frequency of changes and equipment usage patterns. For instance, a coal mine in Queensland, Australia experienced a cost savings of 60 percent through reduced filter and oil consumption alone. This has equaled to saving more than $220,000 per year for the fleet of 14 trucks. In a similar case, Colombia’s largest open-pit mine extended change intervals on fuel filters to 1,000 hours and air filters to 2,000 hours with the use of NanoNet™ Fuel Filters and NanoForce® Air Filters to minimize maintenance costs. Miners can further amplify these savings by adapting condition-based maintenance procedures offered by PrevenTech.
No. 3: Rebuild your engines with the latest technology for better performance and improved savings
A combination of the cyclical nature of the mining industry, and the rapid advancements in technology introduce a challenge for the miners: how to keep their equipment optimized for their evolving needs. As the engine technology advances, offering lower emissions and fuel consumption, miners seek to reflect these advancements in their existing equipment.
A mine truck, with proper maintenance, could see three to four engine re-builds before the whole chassis needs to be re-built, and miners can improve affordability by optimizing their engines during these re-builds. For instance, one miner in Australia’s Bowen Basin concurrently lowered emissions and total cost of production by replacing the old fuel system with a Modular Common Rail fuel system (MCRS). The new configuration fetured Cummins’ latest innovations in combustion technology from its Tier 4 engineering programs.
"Whether it is through fuel savings or reduced use of consumables, gains in affordability also help on reducing environmental impact and favorably impact sustainable cost of production. Miners can experience these gains by seeking partners, such as Cummins, that are recognized as technical leaders and have a track record in championing the latest innovations in power solution technologies. PrevenTech and FIT are two of these latest technologies that leverage advanced analytics and connectivity in helping customers improve affordability of their operations,” said Sean Lynas, General Manager High Horse Power Business at Cummins.
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