OEMs Focus on Productivity

Demand has been abundant in 2021, but a lack of greenfield projects raises concern

The market for mining trucks is a good barometer of the health of the industry. A fundamental component in the extraction and movement of ore, OEMs have been making hay while the sun is shining in 2021.

The perfect storm of pent-up demand combined with all-time-high copper prices saw Caterpillar’s (NYSE: CAT) share price more than double from June 2020 to June 2021, as the company surpassed a staggering US$130 billion market cap. At the annual Alliance Bernstein Strategic Decisions Conference on June 2nd, Caterpillar’s CEO, Jim Umpleby, mentioned that he sees “a very long and healthy cycle” in mining, driven by the energy transition.

Metals involved in the energy transition, most notably copper, represent an enormous opportunity for OEMs in Peru. This is exemplified by Caterpillar’s Peruvian distributor, Ferreyros, which won multi-million dollar contracts to provide equipment for the two standout copper projects in Peru’s recent development pipeline; Mina Justa and Quellaveco.

As of June 2021, Ferreyros had sold 27 trucks to Anglo American for Quellaveco, of which 16 units are already on site, revealed Gonzalo Díaz Pró, Ferreyros’ general manager. Eight of these trucks are currently operating autonomously, with no driver, with four running manually, and the rest being assembled and prepared for autonomy. However, the companies expect that after a year of operation, all 27 trucks will run autonomously.

When the trucks are fully operational, there will be numerous benefits. Díaz Pró elaborated: “a faster production cycle, as we can increase speed in a safer environment and maximize the trucks’ utilization. Also, the performance of the trucks is optimized.”

He added that worldwide experiences with Cat autonomy have shown results of 20% to 30% improvement in productivity, and considering the scale of the operation, Díaz Pró stated that Quellaveco will be at the vanguard of large-scale autonomous mining in the Americas.

Tomás Martínez, CEO of Komatsu-Mitsui Maquinarias Del Peru (KMMP), revealed that the company exceeded its sales target by 15% in Q1 2021, a trend that has continued in Q2. Acknowledging that there were concerns from clients about the election result, Martínez affirmed that the mood remained optimistic: “Although unfortunately there is not much perspective for greenfield investment in the short-term, we hope to see sustained brownfield investment and exploration investment considering the outlook for copper.”

image

“Our mining engines range from 19L to 78L, with the QSK78 engine leading the group with the highest demand, as a result of additional product improvements that translate into enhanced productivity and field performance.”

Frank Lazo, General Manager, Cummins Peru

On the subject of technology, Martínez remarked that KMMP’s main focus has been to maximize the reliability and productivity of its haulage fleets. He highlighted a range of solutions including remote assistance and remote conditioning monitoring, which permit the digital maintenance management of the fleet and increase uptime. “KOMTRAX is Komatsu's remote monitoring system that lets you monitor all the essential information about your Komatsu equipment directly on your computer. Immersive Technologies kits (simulators for operators training) and Komvision help increase safety and productivity, allowing the operator to have 360 degree vision and prevent collisions.”

2021 is a landmark year for KMMP, marking the company’s 25th anniversary in Peru and Komatsu’s 100th anniversary, while its subsidiary, Cummins, celebrates 10 years in Peru. Erick Ruiz, director of the mining division at Cummins Peru, explained how the QSK 78 engines the company supplies have evolved in recent years: “The biggest difference between the earlier QSK78 version and the new MCRS technology is the engine’s fuel injection, which generates more efficiency and provides additional cost savings for our customers (5%+ in terms of fuel consumption).”

Frank Lazo, Cummins’ general manager in Peru, elaborated on some of the new technology the company has been utilizing: “Preventech, a remote monitoring technology, allows our operations team to continuously monitor Cummins engines and ensure levels of productivity.”

image

Lazo also gave the example of Cummins digital communication kit, currently under development locally in Peru, which provides real time video, images and audio from the technicians perspective to the end user.

While mines such as Quellaveco can be seen as emblematic of the direction the industry is headed, the reality for most Peruvian mines is that diesel-powered equipment currently offers a more cost-effective option, and still represents the majority of vehicles. However, the transition to electric vehicles is being made through hybrid equipment. Giorgio Mosoni, general manager of John Deere and Wirtgen Group distributor, Ipesa, outlined the range of hybrid equipment his company offers, including loaders and excavators with technology that allows the recharging of batteries during braking or rotation motions. In 2020, Ipesa expanded its heavy mining machinery fleet from one to three machines in Peru, including two 90-ton Hitachi 870 machines for the Shougang iron-ore mine south of Lima, and a third machine to a gold project in Cajamarca. Mosoni also highlighted the company’s focus on innovation for non-traditional equipment for the transportation of materials: “For example, Ipesa has a Japanese all-terrain machine called Morooka, a rubber track vehicle that allows for greater flotation which works in tin-mines for Minsur.”

Underground mining equipment

Incorporating innovation in an underground mining setting is more of a challenge than in the spacious environment of an open-pit operation. Nevertheless, the need to introduce technology in underground operations has arguably been more critical during the pandemic, as strict social distancing rules have limited the amount of workers allowed in a mine.

Ángel Tobar, Epiroc’s general manager of the Andean Region, observed an increasing interest from clients in new technologies, especially automation, digitization and interoperability. “In previous years automation and digitization, both for equipment and processes, had been advancing at a steady pace, but as a result of the pandemic both have become an urgent need in order to keep people protected.”

Tobar noted that the uptick in demand had not only come from those that require new drilling machines, but also in retrofit projects for existing machines, incorporating remote and even autonomous operation functionalities into the equipment. “As an example, Level 6 Automation or Total Autonomy of our production drilling equipment in surface mines allows us to operate our well-known Pit Vipers from hundreds of kilometers away, both from an office or from the operator's home.”

Finnish OEM Normet has been focused on mechanizing underground equipment for many years. Recent projects include the mechanization of the charging process for emulsion explosives with Orica-Exsa at Nexa’s El Porvenir and Cerro Lindo operations, according to Franklin Pease, general manager of Normet Peru.

image

“Mines are getting deeper and are having to deal with higher strata temperatures and relative humidity. Worker heat stress is becoming a constraint to production and large, expensive chilling plants are required to bring the working zones into compliance.”

Soren Canepa, General Manager, Airtec S.A.

“Mechanization is a constant process and it is a road of no return. Once you have mechanized a process, you will not go back to the manual alternative,” explained Pease, noting that mechanized equipment requires less people, is safer, more efficient, and lowers costs.

He suggested that the challenge is to incorporate all the processes, little by little, to the mechanized workflow. “Shotcrete spraying is already highly mechanized, but the industry needs new specialized equipment for different tasks related to logistics, to make the whole process faster and more efficient,” observed Pease, adding that the next steps will be automation and digitalization.

JH Fletcher & Co, a US-based equipment manufacturer, is currently involved in three underground projects in Peru, according to Alonso Echevarria, the company’s executive director for Latam. Elaborating on how JH Fletcher’s third iteration of its data analytics and digitalization solutions help mining companies become more productive, he said: “Our latest implementation involves 3D technologies where our equipment is able to map a 3D view of what it has in front of it. Through this, the manipulation and handling of the equipment becomes more automated and precise and therefore there is less possibility of error.”

Echevarría went on the underline the importance of designing equipment with the operator in mind: “We are cognizant of the fact that we do not want to overwhelm the operator with electronic gadgets and practicality is thus key.”

One of the Peruvian pioneers of underground mining innovation is Resemin, which has gained international recognition for its specialist equipment suited to narrow-vein operations. James Valenzuela, Resemin’s CEO, says his company differs to the big OEMs as it does not focus on full automation, but rather ease-of-use for the operator. He elaborated: “Full automation can make machines less “confident” or reliable, because it requires a lot of sensors, and narrow vein underground mining is the worst environment for this due to the corrosion, humidity and dust.”

Discussing the company’s latest innovations, Valenzuela gave the example of the Dual Jumbo Resemin launched in 2020 after a trial in Kazakhstan, which performs both face drilling and roof bolting. He also revealed that in 2021, Resemin has requested a patent and will launch a brand new system to perform scaling with a jumbo. “Normally this is a hazardous practice because falling rocks destroy the machine, but Resemin’s new T-Pointer system will reduce this risk.”

“Our latest implementation involves 3D technologies where our equipment is able to map a 3D view of what it has in front of it. Through this, the manipulation and handling of the equipment becomes more automated and precise and therefore there is less possibility of error.”

Alonso Echevarria, Executive Director – Latam, JH Fletcher and Co.

In December 2020, Sandvik announced it would acquire DSI Underground, with the deal set to close in the second half of 2021, when DSI will become part of Sandvik’s Mining and Rock Technology division. Carlos Leigh, DSI Underground’s regional CEO for Latin America, clarified that the company will maintain the independence of its operational and commercial activities which have made it a leader in the Latin American market, but now with the weight of one of the major OEMs behind it.

Before the Sandvik transaction, DSI Underground and ABC Canada launched the joint venture DSI Underground Ventilation Systems, and Leigh spoke enthusiastically about the progress made and client reception of the new product line. When asked how demand for ventilations could be impacted by all-electric mines, he responded: “Ventilation is not just about the way in which we inflow air to compensate for the use of diesel in a mine… The main purpose is to maintain ventilation and speed up the cycles after the burst, and this will not change with the incorporation of electrical machinery. There might be a reduction of fan diameter and pressure, but ventilation will always be necessary.”

On the topic of the relationship between ventilation and electrification, Soren Canepa, general manager of Peruvian ventilation specialist Airtec, explained that the focus in electric mines will shift from monitoring diesel emissions to monitoring strata gas emissions, dust and heat. “Mines are getting deeper and are having to deal with higher strata temperatures and relative humidity. Worker heat stress is becoming a constraint to production and large, expensive chilling plants are required to bring the working zones into compliance.”

Reflecting on the reality today and outlook for the foreseeable future, Canepa pointed out that as electric-powered machines enter into the underground mining space, fleets will be made up of both diesel and electric equipment. “Within this mix of equipment, distribution of the air will be dependent on where those vehicles are located underground. A strong, advanced, smart ventilation system will be required.”

Maintaining air quality is another important consideration for mining operations. To this end, Atlas Copco has seen high demand for oil-free compressors, according to Vicente Trenado, general manager, of Atlas Copco Peru. “Oil-free air compressors are a unique technology that maintains air quality,” said Trenado, observing that this demand is linked to the increased demand for oxygen plants. He added: “Atlas Copco has also collaborated with the solidarity initiative Respira Peru which is building oxygen plants throughout the country.”

Image courtesy of Ferreyros S.A.