Inside the Making of Roy Hill
The long awaited Roy Hill project in the Pilbara region of Western Australia is finally coming to fruition. Representing the next era in iron ore mining, the $10 billion project is expected to unlock a treasure trove of iron ore—55 million tons per year—through an integrated mine, rail and port operation, while providing significant economic and social benefits in the process. The Roy Hill operation is scheduled to load its first shipment of iron ore for export later this year.
The inner workings
The goal for Roy Hill is to develop a vertically integrated pit-to-port business strategy utilizing a mine, rail and port system to efficiently mine, transport and export iron ore.
Roy Hill’s independently owned and operated railway is a 344km standard gauge, single line, heavy haul railway built to transport 55 million tons of iron ore from the Roy Hill Mine to the dedicated Port stockyard facility, in the Boodarie Industrial Estate south of Port Hedland.
“Five ore trains per day will operate from the Roy Hill Mine, each consisting of two diesel electric locomotives hauling 232 ore cars with a total payload of 31,132 tons of ore,” said Roy Hill CEO, Barry Fitzgerald.
“Due to the undulating nature of the terrain to the north of the mine, for the first 30 kilometres of the journey to Port Hedland, each train will initially be assisted by rear located, manned banker locomotives.”
• Related content: [VIDEO] Timelapse: Building the Roy Hill Project
The train system will include a wide array of state-of-the-art technology, including a communications-based automatic train protection system that will provide improved safety for all track related activities and increased operational efficiencies.
“The adoption of this full vehicle tracking communication based technology is the first of its kind to be used in Australia and will set new benchmarks for iron ore railways in the Pilbara,” said Fitzgerald.
After transportation via rail, Roy Hill will then export shipments through its world-class iron ore port facility at Port Hedland. The facility is capable of receiving, stockpiling, screening and exporting 55 million tons of iron ore, including the capacity to store more than 2.3 million tons.
The company will be controlling all of this through its Remote Operational Centre (ROC) in Perth.
“The amalgamation of these business functions into a truly vertically integrated business provides a coordinated and integrated approach to the planning, operation and overall management of our corporate, mining, processing, rail and port operations,” said Fitzgerald.
“The co-location of the corporate headquarters and ROC provides us with the ability to seamlessly integrate the operations, marketing and corporate services functions from end to end.”
The ROC will consist of a demand chain team that is responsible for the operational planning, scheduling and execution of production, maintenance and supply activities across all areas of operations. Their focus will be collecting and validating data, reporting it in real-time to be used in operational decision making.
“The ROC drives productivity and continuous improvement across the business, by focusing on how the individual functions of the business —operations, marketing and corporate—operate together most effectively as a whole,” said Fitzgerald.
“This approach ensures that the business is maximizing throughput and quality conformance, as well as managing variation to effectively minimize operating costs.”
Along with developing the next generation of mining operations, Roy Hill intends on developing the next generation of employees.
“We want to be a knowledge-based organization with a focus on innovative thinking that helps drive productivity and business improvements, so that we continue to deliver what we say we will deliver,” said Fitzgerald.
“We are creating an organization that is free of bureaucracy, where efficiency through streamlined processes drives high performance and delivers cost effective, fit for purpose outcomes.”
The company aims to cultivate a work environment that is conducive to creativity and collaboration, where people actively contribute and realize their full potential.
“We want to cultivate a great work environment for our employees—a place where people are engaged and committed to achieving success. We want to be an organization where people feel proud about what they’ve done and about working for Roy Hill.”
• Related content: Roy Hill CEO Barry Fitzgerald: Innovation is driving us
To ensure employees are properly trained and updated on new safety precautions, the company implements a wide range of training programs for new and old employees, as well as unique initiatives to help them get acclimated with the company.
“We implement a range of training for our people starting with the induction training when they first join to introduce them to the vision, and values of the company and the behaviours we expect from our people. We run regular safety and operational capability and accreditation training and all staff attend a cultural awareness training program that is run in collaboration with the three traditional owner groups whose country the project operates in – the Nyiparrli, Palyku and Kariyarra people.”
Leaving a legacy
Another reason for the significance of the Roy Hill project is the immense economic and social benefits it brings to Australia.
Construction of the massive project, including railway and port facilities, has created around 5,600 jobs at its peak, and ongoing operations will require 2,000 workers. The project has generated more than 39,000 direct and indirect jobs, including 600 people currently working directly for Roy Hill, which will increase to more than 2,000 when the project reaches full production.
Another unique aspect of the Roy Hill project is their approach to reducing their environmental footprint. According to Fitzgerald, Roy Hill already has plans in place for rehabilitation and mine reclamation for the project.
“The nature of the Roy Hill deposit means we will be mining from multiple shallow pits, this allows us to progressively backfill mined pits using the overburden waste material being removed as a result of mining from each pit. These mined out pits will then be rehabilitated using previously removed original topsoil, which facilitates better growth of indigenous flora. There is a twofold benefit to this rehabilitation method, it considerably reduces waste removal costs through shorter haul distances, but also once mining has been completed, we will have returned the landscape to its natural state leaving very little evidence of mining activities.”
• Related content: Building one of Mining's Leading Ports - Roy Hill in the Pilbara
Roy Hill also plans to go the extra mile in terms of corporate social responsibility. In accordance with its values, the company is actively seeking to go beyond just the Roy Hill Project to leave a lasting legacy in the communities in which it operates.
“Our plan for leaving a positive legacy in the communities in which we operate is unique to the approach from others in the industry,” said Fitzgerald. “We have established the Roy Hill Community Foundation, a charitable trust established to focus on delivering education, training and employment, community development, business development and culture and arts programs to these communities.”
Fitzgerald concludes, “The difference with the Roy Hill Community Foundation is that we have invited our contractors, business partners and suppliers working on the project to join us in leaving a lasting legacy in the Pilbara, by making monetary or in kind donations to the foundation. We believe that by working in partnership, we can make a significant difference by maximizing opportunities and addressing community issues that companies may not have the resources or expertise to tackle on their own. We have also introduced a high level of governance with our Foundation partner Samsung C&T and our platinum sponsors, Downer EDI, National Australia Bank and Hitachi having a direct influence on the programs the Roy Hill Community Foundation will implement.”
Mining 4.0: How innovation is shaping mines of the future
Mining may be the gateway to the world’s carbon neutral future. Green energy storage systems, for one, are largely dependent on minerals. According to the World Bank Group, clean energy needs will escalate demand for rare earth minerals by nearly 500% by 2050.
While this growing demand holds much promise for mining companies, it also creates new challenges. Mining operators must navigate the ever-present highly cyclical market conditions and capital-intense operations. Recent trends layer on additional challenges, such as the progressive retirement of the industry’s most experienced workers, increasing regulatory pressures, and rising energy costs. To proactively manage these multiple challenges and capitalize on rising demand, mining companies must innovate and lower operating costs to remain both profitable and viable.
Why the urgent need for innovation?
Leading mining companies have shown that lower operating expense (OpEx) is a pre-requisite to on-going business success. This need is driven by the cyclical mining market and ever present,, hefty capital requirements, both of which are inherent in the mining industry. And, when demand is high, the OpEx cost component of unplanned downtime grows steeper. Data indicates that, in mining operations, the root cause of OpEx overages lies in maintenance issues that impede operating efficiencies and incur unnecessary costs. Left unaddressed, these gaps will prevent mining companies from fully capitalizing on increasing demand.
According to McKinsey, mining companies have historically struggled with significant productivity declines, as shown below. In recent years, there is evidence that a slow recovery is underway, however, full resolution is in its’ infancy, primarily rooted in maintenance cost optimization.
Other data points on current mining operations underscore the urgent call for innovation and change:
- 70% operating efficiency due to breakdowns and stalled production, which translates to real potential for increased productivity and throughput
- 30-50% of mining operations costs spent on maintaining plant, fleet and equipment, so, the magnitude of potential improvements on bottom-line profitability is significant
- 3-5X cost for urgent repairs and corrective work requests versus planned maintenance, often made evident by tracking the percentage of work orders managed through the planning office.
While change is always difficult, the promise of technology (and Industry 4.0, Mining 4.0) is a welcome and required one for mining companies. Digital technologies and automation, or Mining 4.0, is defined by smart equipment, drive data-driven (and thus better) decisions, catalyze connected communications and provide easier, more affordable maintenance. From there, mining companies will be able to speed up production, reduce downtime and boost employee safety – three pillars that have challenged mining operations for years.
The first step: Predictive maintenance via condition monitoring
As the first step to regain operational optimization and lower costs, mining companies must get “ahead of the curve” and prevent process interruptions and unplanned downtime. The key is predictive maintenance via condition monitoring systems. By proactively assessing equipment health, mining operators can be alerted to developing failures before they occur and schedule planned repairs at the lowest possible cost and with minimal impact to production.
Condition monitoring systems are based on the principal that failure is a process, not an event. By monitoring asset characteristics, latent anomalies become apparent well before full failure, allowing for low-cost interventions, root-cause analysis and proactive planning for resolution, thereby mitigating process interruptions. Concurrent with deployment of well-engineered predictive maintenance strategy, a thorough rationalization review can minimize unnecessary or redundant maintenance tasks and, in many cases, eliminate human-induced failure modes.
Maintenance optimization is a powerful lever – and the first step -- to achieving and sustaining lower production costs in mining.
When 14% equals $8 million
Consider this PwC mining example, where predictive maintenance enabled a 14% reduction in maintenance spend by mitigating unplanned downtime to deliver US $8 million savings in operating expense (OpEx).
Goal: Reduce unplanned downtime
Solution: Condition monitoring system on critical equipment
- Condition monitoring insights provide operator alerts of potential failures.
- Proactive scheduling of repairs moves resolution to occur during planned maintenance, partial outage periods or normal equipment rotations.
- Asset availability and reliability increases, production interruptions are minimized and maintenance costs are reduced.
Result: 14% reduction in maintenance spend generates US $8 million in OpEx
Source: PwC “Balancing Uptime and Working Capital: Maintenance and Inventory Strategies in Mining”
Reliability and employee safety
The example above illustrates the dramatic improvements to operating expense as mining operators move from reactive / unplanned to proactive / planned maintenance. With decreased downtime, overall operational reliability also improves and with it, a metric of paramount importance in mining: employee safety.
Studies indicate that more reliable operations are safer operations. That’s because technology serves to reduce human-to-machine interaction and urgent, reactive work declines. For one industrial company, as shown in the graph below, an OEE (Overall Equipment Effectiveness) improvement of 52% delivered a safety improvement of 69% during a 10-year period.
Customer Case Study: Slurry pumps
Let’s look at specific mining applications ripe for optimization and maintenance cost savings. The first is slurry pumps. In mining pumping stations, pump failures are responsible for 97% of unplanned maintenance costs. Pump reliability, however, is crucial in the areas of safety, environmental impact, and efficient transportation.
Key characteristics of slurry pumps can be monitored so that timely analysis of impending issues enable early detection of issues at inception and prior to failure. This avoids unplanned maintenance, unplanned downtime, and averts lost revenue.
In slurry pump applications, dynamic pressure sensors can be used to detect reciprocating diaphragm failures, providing a novel diagnostic to increase pump reliability. The solution is based on these design principles:
- The hydraulic fluid flexes the diaphragm
- When the diaphragm flexes, slurry is discharged
- Abrasive, corrosive slurries prohibit pressure sensor installations in slurry valves
- Thus, dynamic pressure monitoring of the hydraulic fluid assesses the effectiveness of slurry discharge
The result? A savings of US $3 million per year, based on maintenance cost recovery and capacity increases for a 10-pump station.
Customer Case Study: Haul Trucks
In mining operations, haul trucks are another critical asset, as they are relied upon to move raw materials. Alignment of extraction speed to transportation speed is required to keep operations flowing smoothly. Mining operators have invested in larger, automated haul trucks to facilitate this timing alignment and optimize logistics. Thus, haul trucks and their operational health is a key enabler of production reliability in mining operations.
Monitoring haul truck health to ensure reliability, however, presents unique challenges. Because haul trucks are in constant motion, data collection at precise and crucial times with linkage to a monitoring center and diagnostics requires innovative thinking and design.
For one mining company, a custom engineered solution for the haul truck’s control system was designed and installed. The system was devised to monitor haul truck health in two distinct operating states so that changes in the various failure mode characteristics could be accurately identified:
- Running and loaded. In this state, vibration data is collected while the truck is running, loaded and in reverse mode (braking the truck using the electric motor of the electric wheels).
- Unloading. During unloading, vibration monitoring data is collected when the haul truck dump or bucket is being raised.
The result? An estimated savings of US $5 million per year, based on an iron mine fleet of 30 trucks operating at 80% capacity.
Outcomes like the examples above are possible for mining operations via innovative condition monitoring systems. There are many other condition monitoring mining applications, such as wireless sensors for hoist systems and continuous monitoring for SAG (semi-autogenous grinding) mills that deliver transformational outcomes. The ultimate payoff for mining companies occurs when these applications and systems scale and interconnect into an operation-wide solution, enabling more holistic optimization.
Benefits of condition monitoring
Condition monitoring is part of Mining 4.0, the transformation driven by the adoption of automation and digital technologies. Mining 4.0 inherently supports the infrastructure and process requirements for condition monitoring systems. Specifically, Mining 4.0 will facilitate capabilities such as digitization, automation, analytics, artificial intelligence and machine learning, establishing a powerful foundation for predictive maintenance solutions and innovation.
Technology and predictive maintenance benefits have the potential to transform mining operations, starting with condition monitoring. In addition to managing and minimizing the impact of failures, mitigating downtime and reducing maintenance costs, condition monitoring systems also help to increase worker safety, reduce energy consumption and meet environmental requirements.
These benefits unleash significant potential for radical and positive changes in mining operations. All condition monitoring systems, however, vary in scope and effectiveness, so proper selection of a design and enablement provider with full-scale capabilities and proven expertise can impact outcomes significantly.
Innovation beyond technology
While innovation and transformation hold great potential, mining companies must go beyond reducing maintenance costs and implementing technology solutions. Companies must work differently and work smarter to capitalize on the full potential of digital technologies and holistic data strategies that deliver operation-wide benefits. For successful adoption, overcoming internal organizational barriers and cultural challenges to digital adoption is equally essential.
To reduce pressure on capital-intense mining operations, condition monitoring solutions can be “self-funding” initiatives on the journey toward Mining 4.0 as operational benefits of condition monitoring are realized progressively from the early stages of implementation.
The way forward for mining companies is clear -- and full of promise. As the world increasingly relies on mining to produce the minerals needed for green energy, innovative mining leaders will usher in an era of profound global transformation that ultimately benefits us all.
To learn more about condition monitoring systems in mining operations, please reach out to speak with one of us or another experienced professional at Baker Hughes.