Benchmarking mine equipment productivity against industry standards

If I can reiterate what I put in my last blog; worldwide best practice excavator performance is up to 42% higher than average; best practice shovel performance is up to 37% higher than average; best practice trucks are up to 65% better than average; best practice draglines are up to 32% better than average and best practice drills are 282 per cent above average.

So why do mines continue to ignore what others are doing with the same equipment? If the best practice for a 28 CuM class excavator is 23Mt per annum and the average is 13.5Mt, why don’t mines do something about it? Is the $15 million lost from the bottom line of no consequence? The chasm between average and best practice remains partly through ignorance of what best practice is and partly because it is just too difficult for some.

Consequently, many mine engineers and management need excuses for poor performance and comparing their performance against industry standards (benchmarking) is definitely not on the agenda.

“But my operation is different”. It is the standard response when talking about comparing mining equipment. Sure, every operation is different. Some dig deep and others are shallow. Some dig ore and some dig prestrip. Some have hard digging and others soft digging. Some have long hauls and some are short. Comparing with other mines (benchmarking) won’t answer all questions. In fact it will raise quite a few questions which will need to be answered. What can I learn about areas for improvement? What are others achieving which I should be able to do? Many mines are shocked by first time benchmark results and dismiss it through “But my operation is different. We can’t do much better than we are now.” These mines are consigned to mediocrity.

There are many reasons I am given for mines not benchmarking their equipment performance against mining industry standards from mines around the world. You probably can’t come up with an excuse I haven’t heard. If you are looking for an excuse then let me help you out.

• The Stock Exchanges – don’t the mines already do this?
• Executive Management and Boards of Directors – of course our mines do that…….don’t they? We have enough mines to have a reflection of equipment capability somewhere in our company………..don’t we?
• Mine Managers – don’t let the Executive Management and the Board of Directors know how we are really performing; just don’t take the risk. Emphasise how “we are different” and a comparison with others is not helpful.
• Superintendents and Engineers – we are doing better than last year so we only compare against last year – that is our only real measure of how we are going.
• Consultants – we don’t have a wide range of actual performance data so we don’t use industry standards for equipment in our mine plans; besides if we use real rates, the client may not be happy with the result.

Productivity is more than having the right equipment and processes. It is about the people. It is about you. You can continue to be mediocre – just keep doing what you have always done. But the day is coming soon where this industry will no longer accept mediocrity. My crystal ball says that we have entered another extended period which will see mining companies struggling with low prices not too long from now. In fact my crystal ball says that the next boom won’t start before 2023. The last extended downturn from the mid 1980’s to around 2002 was characterised by mines improving output per person, (ie. getting rid of excess people). People are now pretty thin on the ground and the next extended downturn, which we entered in 2009, will be characterised by those mines and companies which survive through improvements in equipment efficiency. If you want to survive, you won’t have a choice. You can’t keep cutting employee numbers to give an illusion of improved efficiency. Mines will have to stop making excuses and follow the lead from that group of mines which actively compare themselves against others and use the knowledge to actively implement change.

I would like to recount the experience of a truck and loader operation here in Australia. They were poor; very poor. A new manager stepped in and refused to accept the way the fleets were being run. They contracted a trainer to help them improve and they did. In fact they doubled annual output. A new pit layout, a new focus on utilisation, new dippers, etc. We then benchmarked their performance against best practice around the world. They were amazed when they found that their equipment was still on average 38% below best practice. That was five years ago and we have worked with them since then. In 2009 this mine achieved best practice across their fleets.

In summary, it is up to you. There is a lot of knowledge out there so acquire it, absorb it and apply it.

Graham Lumley - CEO GBI Mining
BE(Min)Hons, MBA, DBA, FAUSIMM(CP), MMICA, MAICD, RPEQ