By holistically analysing their heavy mobile equipment (HME) fleet, mine sites can optimise capital spend and replacement points to lock in substantial savings – at no cost to asset performance.
A fleet and maintenance strategy that supports high-value strategic decision-making is essential for every mining operation. However, in-house strategies too often fail to realise significant financial gains.
How can a mining company know whether replacing or extending the life of its heavy mobile assets represents the best choice for its business goals?
WHY SOME FLEET STRATEGIES FALL FLAT
A mining asset portfolio can be extremely diverse and influenced by multiple factors beyond asset performance, including:
Maintenance tactics
Labour
Business risks
Life of mine
OEM pricing
Capital availability
Decision-makers may find themselves uncertain about how to accurately evaluate these considerations or the business impacts of all the strategic options available.
This can lead to fleet replacement analyses that default to less effective techniques, like:
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Generic industry benchmarking
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OEM default replacement age recommendations
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Lowest maintenance cost points – replacing before a major maintenance spend
Because these methods don’t consider a site’s unique financial, maintenance, performance and risk parameters, they typically lead to higher business expenses over an asset’s life.
When the goal is to empower decision-making that reduces costs and maintains performance, this kind of fleet and maintenance strategy is simply not fit for purpose.
HOW TO CREATE A STRONG FLEET STRATEGY
Can those developing an HME fleet strategy prove that their proposal does any of the following – with data-backed insights, not just opinions?
- Improves asset availability and reliability
- Reduces capital and maintenance expenditure>
- Minimises on-site maintenance labour demand
Without a clear understanding of asset demand over the life of a mine, it’s next to impossible to make smart decisions on the best solutions or coordinate actions that deliver results
BEST-FOR-BUSINESS STRATEGIC PROCESS
Define assets for assessment
Choose the heavy mobile equipment that will be included in the overall strategy
Analyse mine plan demand
Determine future business requirements and validate forecast fleet capacity gap
Map maintenance strategy and tactics
Link both historical and forecasted cost, as well as labour, to forecasted operating hours
Define assets for assessment
Choose the heavy mobile equipment that will be included in the overall strategy
Analyse mine plan demand
Determine future business requirements and validate forecast fleet capacity gap
Map maintenance strategy and tactics
Link both historical and forecasted cost, as well as labour, to forecasted operating hours
Evaluate scenarios
Examine viable options using multi-criteria assessment to meet target performance metrics
Model asset’s whole of life
Profile the asset’s Equivalent Annual Cost (EAC) to determine optimal replacement and key decision points
Identify spend and timings
Develop a spend schedule – including refurbishment, hiring, replacement and major maintenance costs
Identify spend and timings
Develop a spend schedule – including refurbishment, hiring, replacement and major maintenance costs
Model asset’s whole of life
Profile the asset’s Equivalent Annual Cost (EAC) to determine optimal replacement and key decision points
Evaluate scenarios
Examine viable options using multi-criteria assessment to meet target performance metrics
Provide recommendations
Present new asset replacement ages that meet all requirements, including:
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Meeting life-of-mine capacity
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Balancing performance with cost
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Identifying risk and optionality, if the mine plan changes
Implement solutions on the ground
Take action to realise the value in the new fleet strategy, which may include:
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Confirming OEM build slot requirements
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Adjusting business capital demand profile
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Updating maintenance strategy – considering work elimination and downtime reduction
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Changing SAP plans and task lists for cost, labour and materials
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Optimising shutdown planning and workstreams
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Confirming rotable spares for high-value critical components
WHAT SUCCESS CAN LOOK LIKE
Working with Core Asset Co. – specialists in strategic asset planning and decision support – a leading iron ore miner shows just how much of an impact an effective fleet and maintenance strategy can have on total costs.
The company needed to make critical strategic decisions around asset replacement and maintenance at its Pilbara iron ore mine site, taking into account:
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Performance issues of an ageing fleet
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Industry-wide labour shortages
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Acquisition lead times of up to two years
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Mine closure within 10 year
Their new fleet strategy saw some replacement points reduced, some unchanged and some extended – all based on technical insight and backed by in-depth analysis.
For a total investment of less than AUD 1 million, the mining company locked in substantial cost savings over the 2023-2032 period.
AUD 142.3 million
Net Present Value to client;
a reduction of 12.5%
in total costs (NPC)
Up to
4% improvement
in asset availability, with no decline in
performance
8.2% reduction
in maintenance labour demand
Additional value from
increased production
through identified asset
configuration options
Thanks to a comprehensive decision process that examined high-impact quantitative and qualitative data, the mining company was able to achieve an ideal outcome that met its business goals.
Learn more about what ‘best-for-business’ looks like for you.
Get in touch
Ready to address the root cause of your mobile and fixed asset problems?
Speak to Core Asset Co. to transform your asset performance.
