Relocating risk

LONGWALL mines are increasingly looking to contractors in times of high manpower needs. Angie Bahr examines how longwall relocation contractors are facing the challenge.

Angie Tomlinson

Published in Australia's Longwalls

Tighter profit margins have forced modern collieries to retain minimum manning matched only to the core functions of an operation. The upshot of this has been the rise of the specialist task contractor when high manpower and machine demands are simply too much for a mine operating on bare minimum staffing.

The most common task requiring elevated man and machine power is the longwall relocation. Many Australian mines are today utilising contractors during these peak periods to provide labour and expertise to keep downtime to a minimum.

Whilst mines look increasingly to outside help, contractors are facing their own set of challenges. “The days of picking skilled mine workers off the tree are essentially over,” said UGM Engineers’ Ross Campbell.

New South Wales based relocation specialist UGM have focused their labour concerns on retaining skilled project leaders, operators and trades who stick around.

“We are all driven by the bottom line yet sometimes we don’t see value for our dollar. If you owned a Ferrari would you trust its care to the local backyard guy? Tell me now, just how much did your longwall cost?” said Campbell.

“A frivolous analogy I know, yet for us to keep our quality people we have to remunerate well and have to plan their ongoing work to retain their services. If that costs a couple of dollars an hour more than the ‘local backyard guy’ then that’s what we choose to do as a company. The question the mines must ask is, how much is the real cost of that ‘backyard guy' and is he going to be there for your next relocation?”

Whilst it is all good and well for the contractor to endeavour to keep skilled staff, Campbell said the mine must also play a part.

“A commitment from the contractor to be able to manage the relocation and supply the required skills for the safe and efficient project execution, and a commitment from the mine to lock in the contractor as early as possible. Traditionally mines concern themselves with the relocation machinery first and the labour last. Too many times requests for our services come only weeks prior to the commencement of the relocation and we just have to say sorry.

“As a contractor we have to understand the industry we support, yet our ability to function successfully demands a deeper understanding from the industry. We need commitment from the mines to be early enough for us to schedule their relocation in our forecast or miss out. The result to the mine will be a huge financial cost as a blowout in longwall downtime, through relocation overrun, will occur.”

Campbell’s comments were reiterated by Mastermyne’s Andrew Watts. Queensland based Mastermyne perform relocations at four mines in the Bowen Basin and are currently in negotiation with another.

“Probably the biggest challenge facing longwall relocation companies is personnel. For Mastermyne longwall relocation work contributes only a small percentage of company turnover (less than 10%) and a large percentage of company risks.

“Mastermyne employs over 150 personnel and has the ability during longwall moves to adopt an all hands on deck approach. This enables us to redeploy sufficient skilled longwall personnel to the longwall move contracts while still maintaining a focus on the remainder of our business,” said Watts.

While contending with the trials and tribulations of finding skilled staff, Watts said Mastermyne must also vie with contractor image problems.

“Some longwall contracting companies do not do the longwall relocation business justice by non performance on some contracts, hence leaving a sour taste with the mine operator. Also, some mine operators who have not yet utilised contractors to assist/manage longwall relocations have some trepidation as to the levels of efficiency which may be introduced. Mine operators do not want to lose total control of the longwall,” he said. The combination of these factors Watts said, has led to contractor involvement in longwall moves remaining stagnant over the past four years.

One Bowen Basin mine manager said he saw mines increasingly looking towards more contracted longwall moves because there was a distinct peak work period with a defined start and finish and a clear project timeline.

“Key issues to be assessed are the capability of the contractor to supply a stable and skilled workforce with such peaks and troughs in the workload and the ability to integrate with the mine’s safety management plan and workforce,” he said.

Criteria normally used during tender assessment included safety management, technical skills, leadership capability, financial viability, cost competitiveness, project management skills and conformance to deadlines.

“While it is a shared accountability and the contract should be set up to financially reflect that - it is always the mine's problem if it doesn't go well. For that reason we assign our own project manager to the move and have separate project controls (timing and financial) which are monitored.”

The tendering process also offers some challenges for contractors, with increasing insurance costs and accountability dilemmas.

“Tendering processes are very time consuming and costly, there are quite a few contracting companies who tender on relocating longwalls and very few who can actually perform the work. In many occasions mine operators put longwall relocations to tender to meet a corporate and commercial requirement. When in reality negotiated contracts with one or two preferred contractors provides for a streamlined tender process and gives both the mine operator and the contractor time to focus on the task at hand,” said Watts.

“When Mastermyne first commenced longwall relocations the reward and risk were on similar levels, substantial bonus figures were paid to bring the relocation in under schedule. But more recently the reward of relocating longwalls is not equal to the business risk and several companies have removed themselves from the longwall contracting business to eliminate this risk,” he said.

Insurance costs make up 10 to 20% of overall Mastermyne relocation operational costs, up 5% on two years ago attributable to the collapse of insurance giant HIH and September 11.

“Insurance costs are at astronomical levels and harsher contract conditions here to read on.

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