In response to a cost per ounce objective set on gold production at its Target Gold Mine, AVGOLD`s Target Division developed a revolutionary mining and mining management concept with information technology as the primary enabler.
Geoff Bamber, Manager: Finance, Admin & IT Services at Avgold`s Target Division, explains: "The project team decided some three years ago that it is more appropriate to manage the various production processes as entities rather than the traditional approach in which various departments are managing their part of each particular process. The aim is to maintain production at a constant maximum whilst making the most effective use of mobile production equipment and resources such as, labour, materials, air and that maintenance must be co-ordinated with production requirements."
In September 1997, AVGOLD put out a tender for an IT system for Target to address several functional areas in the mine operation. In the tender the objective of a pre-determined production cost per ounce of gold was stated. In a first for South African mining, tenders were invited to propose an IT system which would enable Target to achieve this objective.
After evaluation, Target placed an order with a consortium of IT suppliers proposing a "best-of-breed" integrated IT solution. The consortium consists of Megkon System Technologies, i2 Technologies, SAM and AST as systems integrators.
Megkon Systems Technology supplies the MAXIMO Enterprise Work and Asset Maintenance Management System. MAXIMO will form the focus of the Asset Management and Materials Management solution.
The challenge for this IT solution is not to integrate the different IT solutions, but to deliver a business solution capable of supporting a high degree of automation in the re-engineered business processes, which are based on minimum staff levels.
"This is a unique project never before been attempted in the South African mining industry or the world. It requires ground breaking and innovating reasoning with world leading products to support our client`s objective to produce gold at a pre-determined production cost per ounce. The successful completion of this project will ensure that the mining and other heavy industries cannot afford to ignore it," says Danie Van Vuuren, Senior Maximo Account Manager at MST.
Bamber explains some of the issues the solution will have to address: "Production plans must be devised that maintain production at maximum output whilst maintaining logical mining sequences. These production plans must be integrated with planned maintenance, materials requirements planning, labour resource planning and available air. The mine will be using highly skilled employees utilising expensive world class mobile mining equipment, and therefore high productivity and utilisation of equipment is essential."
Optimal resource scheduling can only be achieved through proper planning and the flexibility to adapt the schedule to allow for changes ranging from equipment failures to international market influences. The concept includes the implementation of a central control room. Here all work will be co-ordinated, with real-time monitoring of work execution and the capability of immediate re-planning and reallocation of resources in the event of progress inhibitors occurring. Early visibility and identification of problem areas by this control room, and immediate corrective reaction has been identified as the key to realising production targets.
Bouke Spoelstra, MST project manager, says geographically mines are often far from their suppliers. "If a supervisor runs out of a key material, it could be days before the stock is replenished. Mines counteract this by stockpiling material underground or on the surface - a policy that can cause significant losses if the dispersed stores aren`t tracked properly. This practise, however, carries no guarantee that something won`t run out. The carrying cost of excess inventory also ties up a lot of capital.
"In the new solution, the JIT (Just In Time) Principle is enabled to the extent where the data capturing of actual materials used per mining cycle is immediately processed, and then taken into account by the logistic supply chain when dispatching the next shipment to the production face. In Maximo this process is backed up by automated inventory control and purchasing processes with self-management logic, which includes system automated expediting processes. Target`s revolutionary acquisition model is a first in South Africa, moving into the world of Maximo E-Commerce," Spoelstra said.
Bamber concludes: "Instead of looking at how mines are usually managed, we`re looking at the whole mining process with new eyes, and trying to design the most efficient mine we can before we even start producing ore. We may even look at re-defining our measures of productivity. But to do that, we need the information systems to back us up."
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