Cerrejon's cost focus

IMPROVING productivity rather than headline production is the name of the game as Colombia's largest coal mine (pictured above) seeks to mitigate the effects of falling coal prices, having recently completed its $US1.3 billion ($A1.49 billion) P-40 expansion project.
Cerrejon's cost focus Cerrejon's cost focus Cerrejon's cost focus Cerrejon's cost focus Cerrejon's cost focus

Courtesy Cerrejon

Staff Reporter

Leonardo Salcedo leans against the massive wheel of a Hitachi EH5000 truck, jacked up ready for a four-hour tyre change in the extensive maintenance workshop at the Cerrejon coal mine in Colombia.

“With tyres costing US$60,000 each they have to last at least two years,” says Salcedo, superintendent of reconstruction in the maintenance department.

While P-40 has increased Cerrejon's coal production and export capacity, it has come on stream at a time of diminishing prices, forcing the BHP Billiton, Anglo American and Xstrata-owned company to rein in efforts to hit the 40 million tonnes per annum mark to focus on profitability.

The P-40 expansion saw Cerrejon upgrade part of its mechanised fleet rather than increase its numbers in order to do more with less, such as buying a fleet of 24 320t Hitachi EH5000 trucks that it started receiving from February 2012, a purchase that literally raised the roof.

“When we bring the trucks in to work on them we tip back their box beds but the new trucks are so big that we are having to raise the workshop ceiling a few metres so that they can fit,” Salcedo said.

Looking after truck tyres is just one of three main areas Cerrejon has targeted for pit operation improvement. Lifting shovel and truck productivity, and improving tyre care were others, said central mining superintendent Jose Luis Prieto, from the observation platform at the Tajo 100 pit speaking above the drone of 240t Caterpillar trucks hauling waste as the P&H shovels worked to expose another coal seam.

“Those are easier to drive than your car. You just move a joystick,” he said.

Tajo 100 is part of the Central zone operation that moves about 300,000 bank cubic metres a day to produce about 32,000t per day of coal. Cerrejon as a whole mines 772,000bcm to produce 98,700tpd coal.

Data capture and analysis has become an important part of pit operation as Cerrejon seeks to shave every cent it can off production costs.

“Our trucks were operating at 92% of their planned productivity. We did a pilot project that looked at the pit roads, location of the access ramps and the evenness of the floors of the loading areas. We found that by removing obstacles such as narrow roads and uneven slopes, and doing more operator training we achieved 112% of planned productivity levels,” Prieto said.

Telemetry systems provide real-time information about operating conditions with alarms when there is poor equipment operation that allows mine managers to intervene to optimise pit performance.

With fuel costing US$120/hr per truck, optimising journey times and reducing waiting makes big savings.

“Our dispatch systems can see which are the slowest roads and make trucks avoid them, or avoid shovels where trucks are waiting to be loaded. We also monitor tyre pressure and heat and so can send trucks for maintenance when they exceed their operating limits to prolong tyre life. Put this all together and we can optimise the load factor to optimise the productivity of both trucks and shovels, as there is no point maximising one at the expense of the other,” Prieto said.

The P-40 expansion also saw debottlenecking operations outside the pits, such as the installation of a new coal pier at Cerrejon’s dedicated Puerto Bolivar facility, some 150km from the mine, so that two or more vessels can be loaded at the same time. The new load-out facility loaded its first 20,000t of coal at the end of August.

The port can receive vessels up to 180,000t capacity and the average load-out was 105,000t in 2013. Some 45.6% of exports are to mainland Europe, 26.8% to the Mediterranean region, 19% to South America, and 8.6% to the US.

Cerrejon generates 43% of Colombia's coal exports and accounts for 3.8% of the global market.

With the downturn in the coal market, productivity improvements are geared towards helping the bottom line rather than increasing output. Despite capacity increasing to 40Mtpa, Cerrejon is expected to repeat the 33Mt it produced and exported in 2013 this year. “The price of Colombian coal has fallen 38% in the last 36 months and it is not going to improve any time soon.

“There are structural problems to address and we have to have a very sure public policy as we face competition from Indonesia and Australia among others,” said Colombian Mining Association president Santiago Angel.

This was first published on affiliated website Miningjournal.com

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