Houser said history has shown when coal prices improve, productivity improvement slows down. The four driving forces behind productivity improvements are price, technology, management and geology, he said.
Houser said coal industry productivity has improved over the past two decades at a rate of 7.6% per year, based on thousands of tons per employee per year.
Longwall mines have consistently outperformed other underground mines but they have lagged further and further behind surface mines. Despite this, the best longwall mines are outperforming the average of the surface mines by a ratio of 2:1. Houser pointed out that the best longwall mine last year at 36,000 tons per employee outperformed the average for the top 10% of surface mines.
The coal price is the single most important driver of productivity, Houser said, with soft prices forcing mines to be more productive. Every time prices go higher, this is accompanied by a decreased rate of productivity.
“There are at least three times during the past 18 years when this has, without exception, been the case. Interesting, these price blips have been at about ten year intervals from early 1983 to the early 1990s and now again in 2001… If history repeats itself, there will be, within the next few months, a deterioration of the rate of productivity improvement in the coal mining industry. This could even become a negative rate of improvement.”
Technology improvements have been the second strongest motivator of productivity improvement. Improvements include larger equipment; reduced maintenance resulting from improved equipment design; precision controls are evolving into automated and remote controls; the introduction of diesel equipment underground; better balance between longwall and continuous mining equipment; environmental Controls in areas such as dust, noise, and diesel emissions.
The improvement of management and technicians has resulted in larger panels, reduced headcount, benchmarking, empowerment, effective incentive programs, improved planning, modeling, simulation, better utilisation/scheduling, and reduced time for longwall moves.
Houser predicted a dropping off of productivity improvement this year or next year and
he suggested key skill areas US longwall operations would need to swim counter to the forecast slump in productivity improvement.
Houser underlined the importance of measuring productivity to improve productivity. Most managers do not measure productivity and those that do often do not do so accurately or consistently.
“When performance is measured and reported, the rate of improvement accelerates. Adding the report phase includes communications with relevant parties. Feedback on performance and accountability for results is critical to an effective productivity improvement program,” Houser said.
“From the hands on technician dealing with the equipment and doing the mining, through the mine operation manager’s focus on dollars per unit to the CEOs concern with dollars per delivered million Btu, everyone must be included in the critical communications. Contributions must be received from and disseminated to each line person in the organisation.”
Perhaps the next most important principle, according to Houser, is to ask more good questions, internally, through benchmarking and through third parties.
* NorWest recently opened an Australian office in Brisbane, see related article.
Next week ILN will publish an overview of the paper: Longwall dust control: issues and possible solutions, presented by Jay Colinet and others from NIOSH, as well as Tom Barczak’s paper Design considerations for the next generation of longwall shields.