“Achieving Mine to Market Throughput” – Iluka South West Operations – Case Study 2013
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Transcript of “Achieving Mine to Market Throughput” – Iluka South West Operations – Case Study 2013
1© 2013 TOCICO. All rights reserved.
TOCICO 2013 Conference
“Mine to Market”
Throughput Focused Mining (TFM)A holistic approach to improving the flow in
a complex Mineral Sand Operation
Presented By: Robert Bolton
Date: 6th June 2013
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TOCICO 2013 Conference
Agenda
• Australian Mining Industry
• Iluka South West Operations - Case Study
− Holistic Review - What to change?
− Holistic View of operation
− Production simulators workshops
− Interventions - What to change to?
− Results – Record & Reference
• Argyle Diamonds - Case Study
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Operational Management Conflict – Environment
• There is a shortage of skilled resources (Metallurgists & Engineers), due to operational consolidation andadditional resources projects in WA.
• The operations leader (General Manager) has no tools to assess the leadership skills of his engineers.
• The older ore bodies are creating greater input variation.
• Existing planning and execution system were limited.
Do not schedule
the processINPUTS
Schedule the INPUTS through the key process points.
(CONSTRAINT)
Increase flow acrossthe whole operation
To meet theOperational targets
(Annual Plan)
Adjust & optimise process controls on
daily basis
OPTIMISEthe LINKS
OPTIMISEthe FLOW
New GOAL: Ensure that the short term planning system does not add variability to the process flow [ or System]
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Australian Mining Industry
• Strong Growth during past 10 years
− China, India & emerging markets & developed East Asia
• Capital Intensive
- Highly leveraged to market, operational & financial inputs
• Portfolio Management (Head Office – source of capital & marketing)
• Operating Unit Goals
− Safety
− Meeting regulatory requirement
− Budgeted production targets
− Increase Life of Mine (LOM)
− Reduce Unit / Cost
• Benchmarking – Cost Curves
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Iron Ore Cost Curves
• Text
Aim to be in first quartile (ie LHS)
Source: Carpentaria Exploration – June 2012..
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Mineral Sands Cost Curve
Combines Revenue & unit cost assumptions for R/C curve
Source: Mineral Deposits AGM Nov 2011
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Mine to Market – Flow Profile
• Trend move from producer to customer focused
• Modifying product / output to meet end user requirement
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Iluka (ASX:ILU)
• World’s leading Mineral Sands Miner
• 4 Mines & concentrators, 2 Separation Plants & 2 Synthetic Rutile (SR) plants in the SW
• 1, 000 people employed world wide
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South West Operations May 2002
• Merger of several Mineral Sands operations
• Increasing market for SR Product.
• Capital expansion being planned
• Mining operation becoming more difficult
Zircon Titanium Mineral Pigments
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Time Line
• ToC Introduction July 2001
• Holistic Review - May 2002 - What to Change?
• Interventions - June to August 2002
− ToC Operations workshop & Follow-up - What to Change to?
− Technical Planning meeting - How to Cause the change?
− 12 week rolling schedule NCSM - Maximising Constraint
• Record SR Production rates – October 2002
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Holistic Review 2002 - What to change ?
• Operational wide planning on a large block model
• Limited short to medium planning (MOS review)
− Based on monthly budget & rolled down on a daily basis.
• Unclear planning horizons
• ADHOC review and follow-up
• Data recording is extensive and updated daily (Protrak)
• Limited planning & scheduling information pass between departments
• CONSTRAINT is likely to be Separation Mill (NCSM)
• Trend of moving from Make to Stock (MTS) to Make to Order (MTO)
production system
• Blending of inputs can take place at a number of locations within the site wide process.
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M2M – Holistic view of operation – Before
• The was disagreement over where the CONSTRAINT was. Most thought it was high unit cost process SR plant.
• Stockpile and storage bins were available as buffers. These were not managed.
• Limited communication between functions
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Intervention – June to August 2002
• TOC Operations workshop & follow-up training
• Technical Planning meeting
• 12 week rolling schedule NCSM
• 12 week rolling schedule – Mining ( 4 mines)
AIM: Increase thru-put and increase operational stability.
I.e. Variation in the process is understood then managed.
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Operations Simulator
• Text
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Technical Planning Meeting
• Commenced - Mid June 2002
• Purpose – Communicate and resolve Short Term (12 week window )
planning issues
• Format – participants from Mining, processing and shipping
– weekly meeting 1 hour duration
– updated predicted performance during the week
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Benefits – Technical Planning Meeting
• Improved Communication- ownership & resolution of issues increased.
• Critical Issues raised prior to their impact
− Shipping is aware of what process can deliver number of weeks in the future.
• Customer Requirements Communicated
− Customer specific specification are noted as required.
• Quality and Logistical issues raised and actioned.
− 18 / 26 issues raised were resolved in 1st 3 weeks. All were resolved in 12 weeks.
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12 week Blend has reduced input variability
• Text Predicted vs Actual TiO2 in HMC Feed
53.00
54.00
55.00
56.00
57.00
58.00
59.00
60.001
9/0
6/0
2
21
/06
/02
23
/06
/02
25
/06
/02
27
/06
/02
29
/06
/02
1/0
7/0
2
3/0
7/0
2
5/0
7/0
2
7/0
7/0
2
9/0
7/0
2
% T
i02
Train 1 Projected Train 1 Actual Train 2 Projected Train 2 Actual
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Mine to Market - Interventions
TR A IN 1
T R A IN 2
IL S R
3re je c t m a g s
4n o n
m a g s
5IL
s u lp h a te s
S P B 1 1 6
T i W e s t
S P A 1 1 8
M /T1 1 9
S e p a ra t e b y T iO 2 le ve ls
C o n c e n t ra t e & C le a n
C a p e l D ry P la n t
IL F E E D
R e d u c e T iO 25 8 -6 0 % 9 2 . 7 %
IL
2 4 0t /d
3 5 0t / d
F in i s h e d G o o d s
S R P R E M
S R S T D
S R M IC
O ff S i te
G ia c c i # 7
S R P R E M
S R S TD
M IC ~ 9 5 , 0 0 0 t / p a
W h a r f(c u s to m e r )
H y t i 7 0 ( L e u c o x e n e )
H y t i 9 0 ( L e u c o x e n e )
Z irc o n P e m iu m
Z irc o n S t a n d a rd
B a g
B a g
3 %
9 0 %
IL S u lp h a t e
F u rt h e r C le a n in g
H y t i 9 0
F R E M A N T L E P O R T
H y t i 7 0
B l e n d o r e b l o c k s
S h ip p in g b l e n d p la n
B le n d N C S M F e e d
S R F e e d B le n d
1 0 D a y s 3 D a y s 1 - 2 D a y s
Z irc o n C a p e l C o a rs e
M in in g P r o c e s s in g
N C S MS R P la n t
S h ip p in g
Y o ga n u p
M in in g P r o c e s s
Y o ga n u p E x te n d e d
M in in g P ro c e s s
N o r t h C a p e l W e s t
M in in g P ro c e s s
S t ra th a m W e s t
M in in g P ro c e s s
H o lis t ic F lo w
L e a d T im e s
D e c is io n M a k in g
F o r e c a s t
1. Technical Planning meeting
(Alignment)2. Schedule (blend) at
the Constraint from Mining.
3. Manage SR plants to meet
Customer (shipping)
requirements
4. Stockpiles (buffer) information used for scheduling to enhance plant output.
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Operational Through-put at record levels – Oct 2002
Benefits to Iluka
• Record production rate ensured the 2002 targets were met. This was repeated over next 4 years.
• 25million capex for a 3rd SR plant was deferred.
• Priorities were determined based on meeting customer shipments and product flow.
• Increased T-put to Iluka due to less out of spec product. Operational margins improved.
• Ability to blend lower grade HMS into SR plant. This increased the value of the reserves being mined.
• Communications changed and improved between key functions to be more business like.
• Organisation Development and Structures became more robust. Roles & responsibilities were resolved post merger.
4 October 2002
MINE TO MARKET - A HOLISTIC APPROACH
In June 2002 a Mine to Market project was initiated to provide a holistic view of the South West Operations.
Part of this project involved exploring and applying the Theory of Constraints concepts scheduling to the short-term planning and management systems. We used the services of Robert Bolton of Probative Solutions to facilitate and apply these concepts.
Over the past 2 months the Processing (inc. Separation, SR, Day Services and Shipping), Mining and Laboratory teams have been collaborating to improve SR production whilst not impacting on grade. This collaboration has taken the form of weekly meetings, weekly scheduling at the Mine/Separation/SR interfaces and various informal discussion groups.
The result of this work is that SR1 and SR2 Kiln throughputs are sitting at record rates. This has been achieved through optimising our production scheduling to meet shipping requirements.
We aim to build to these improvements by focusing on further constraint management initiatives.
Yours faithfully,
TONY EMSLIEProcessing Manager – South West
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Resources – Case Studies
• Argyle Diamond Mine 1993 - 1995
Argyle’s open-cut mine is the largest diamond producing mine in the world and the only significant pink diamond supplier. Management identified the need to improve understanding of the business from a shareholder value and wealth creation perspective. Specifically, the business needed to establish the economic cut-off point for the mining operation, evaluate extended resource exploitation options, identify and re – locate service related activities and re –evaluate the economics of the entrenched commute options including the 78 employees located in the nearby town of Kunnunurra.
The project involved gathering/interpreting data and translating into the ABC analysis structure, utilising Theory of Constraints resource method, developing ABC business process models, identifying Key Performance and value adding measures -indicating ‘economic health’ and identifying, ranking and evaluating process redesign opportunities. Considerable time was also spent on developing cash flow models with process simulations and sensitivities, documenting business processes and developing an understanding of cost structures and drivers. A key aspect was top establishing knowledge transfer across the business.
The assignment identified and evaluated a number of significant re-engineering opportunities. These included process plant de-bottlenecking, varying the product/waste split, improving mobile fleet utilisation improving fixed plant utilisation, reducing process recycle streams, relocation of ‘indirect value adding’ staff and employing contemporary ‘remote working’ approaches.
These opportunities provided a A$300M increase (30%) in the net present value of the Argyle Project.
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Argyle Diamonds - Intervention
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Questions…
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TOCICO 2013 Conference
About Robert Bolton
• Experienced Company Director, Executive, Engineer and transformation change agent.
• ToC pioneer in Australia. Sustainable results in infrastructure construction, mining, oil & gas, & financial services.
• Regularly combines new ideas & methods to solve business problems.
• Applies governance and logistical solutions for complex business dilemmas.
• Theme: Business are runs by systems. Systems are developed, run & managed by people.
• Great business systems steers growth
• Lives in Sydney.
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