Even a small saving in operational costs over the life of the mine can often justify higher capital investment up front. The mining industry will realise benefits from shifting its cultural mindset from focus on initial capital investment to total cost of ownership (TCO).
We all know it from when we buy household appliances – the cheapest option is usually the most expensive in the long run due to break downs, repair bills, electricity costs and the shorter life time of the equipment. This also applies to the mining industry - except the numbers are a lot bigger.
“Mining corporations are aware that their operational costs by far exceed their capital costs and that a small reduction of operational costs can justify a much larger capital investment. Yet for many reasons, we still see customers happy to implement cheaper, lower quality equipment into the flowsheet and accept the higher operating costs that go with it. To maintain productivity in the industry, we need to create more awareness and change this mindset,” says Michael Woloschuk, global industry director of gold at FLSmidth.
Better performance and no unscheduled stops
There are several reasons why higher capital investment can reduce the total cost of ownership during the lifetime of a mine. Firstly, original equipment is more robust and achieves operating hours per year, increasing annual throughput. Higher quality wear parts and the rise in digital equipment monitoring and performance measurement technologies has led to predictive maintenance and optimisation of performance. Furthermore – just like with the household appliances – quality OEM equipment also has lower energy consumption. During the lifetime of e.g. a SAG mill this has a significant impact on the bottom line.
“The big bang for your buck is to increase productivity and in potential revenue generation, higher recoveries, higher throughput, and higher equipment availability. For a gold plant producing about 280,000 ounces per year, simply increasing plant availability by three and a half days annually results in some $3.5 million in added revenues every year at the current gold price. ” says Mike Woloschuk.
FLSmidth agrees with other OEMs that miners will profit from this long-term perspective rather than focusing on short-term gains. Read an interview with Michael Woloschuk and representatives from Outotec and Metso on the subject in CIM Magazine.
Michael Woloschuk, Global Key Industry Director, Michael.Woloschuk@FLSmidth.com