Mining Case Study Of Open Cast Platinum Mine

Background

Mine X is an open cast Platinum mine based in the North West Province of South Africa. A fleet of 400 plant items and vehicles are used to deliver over one million tons of mined ore per month. There are 14 fuel locations, which includes three mobile bowers, used to service the fleet. An average of 1.3 million litres of diesel is dispensed per month.

Prior to implementation, no systems to control and monitor fuel deliveries and fuel consumption existed and it is believed that as a result, waste, abuse and misuse of fuel were rampant.

Implementation

The mine commissioned Gilbarco to implement a wetstock, site automation and vehicle identification system. This solution included on-site maintenance of the system, business intelligence analytics and reporting services. The purpose of implementing the solution was to ensure:

• Accurate recording of dispensing from the nozzle into the mine’s fleet;
• Proper and accurate Wet Stock inventory reconciliation and the investigation of any daily variances outside the industry threshold of 0.5 %;
• Wet Stock Re-order levels are managed in real time;
• Daily electronic confirmation of volumes delivered;
• Detailed tracking of fuel tank contamination;
• Only authorized vehicles and plant can refuel through the fitting of a Radio Frequency Identification (RFID) tag to the fuel tank inlet of the relevant vehicle / plant item which communicates to a corresponding RFID transceiver on the pump. Thus the vehicle itself and not the driver is the method of authorizing the refueling transaction;
• Management reports are provided to enable vehicle consumption analysis as well as exceptions and tank level variances being highlighted;
• Greater control over the total fuel spend by monitoring and controlling contractor usage through the system;
• Fuel information integration into their financial system has enabled better controls and asset management control.

Detailed Findings

By comparing the onsite fuel usage per ton pre and post implementation, assuming that fuel delivered was used in the month of delivery, a significant reduction in fuel costs has been achieved. Prior to the implementation of the solution Mine X was using an average of 1.46 litres of diesel per ton of ore mined. For the 6 months post implementation of the solution an average of 1.05 litres per ton was achieved. This resulted in a 2.6 million litre diesel saving for the mine during the 6 month period post implementation. This equates to a 28% reduction in fuel usage and a $2.84mn reduction in fuel costs for the mine in the first year post implementation.

The technical implementation cost of $621 000 was capitalized allowing a Return on Investment after just three months. Value and benefits from the solution are expected to increase each year with continuous process improvement efforts by the Gilbarco team.

A senior manager of Mine X expressed his confidence in the system:

"Since the commissioning of their Fuel Management System, Gilbarco has helped us to continuously improve on our controls around fuel and lubricant usage. The solution provides valuable information and improves efficiencies all the time."

Key Findings

In the first six months post implementation of Gilbarcos fuel management system, Mine X achieved:
28% reduction in fuel usage;'Fuel saving of $2.84million after first year.