According to Ernst & Young’s Business risks facing mining and metals 2012-2013, the following were the top 10 investment risks facing the industries in 2012:
* Resource nationalisation
* Skills shortage
* Infrastructure access
* Cost inflation
* Capital project execution
* Maintaining a social licence to operate
* Price and currency volatility
* Capital management and access
* Sharing the benefits
* Fraud and corruption
A major concern of Rockwell Automation is to determine how automation companies can address these risks and play a role in mitigating them. Rockwell Automation believes it can contribute significantly to reducing three of the top five – skills shortage, cost inflation and capital project execution.
In 2008 the skills shortage was the number one business risk, but this has now been replaced at the top by resource nationalisation. However, it remains critically important as it can impact production, delay projects and increase labour costs.
Cost inflation has increased from sixth to fourth place over five years. Mining companies have been hard hit and most are revisiting their capital expenditure as spiralling costs threaten the viability of new projects. In addition wage inflation and increasing complexity are driving up operating costs.
Capital project execution, which did not feature in the top 10 five years ago, is now the fifth highest risk. Less than 16% of projects worldwide are delivered on plan, yet there is a huge pipeline of mining projects worldwide through to 2015 and the risks feed into each other. Companies are focusing on enhancing project controls and driving standardisation to ensure projects are delivered to plan.
Challenges facing a project
In a typical bulk ore mining project, the cost of the control system is around 1-2%, which is only a small portion of the total project cost. If there is a failure or below par performance in the control system, the capital risk associated with the control system becomes the capital risk of the whole project – the full capital value. This is a crucial concept, as towards the end of a project the investment risk of the whole project is taken on by the control system. As a result the automation vendor needs to play a much greater role in the project.
The main causes of failure in a process control system are technical issues, procurement and maintainability – the cost of ownership.
Technical risks
System failure results in project delays, cost increases, production losses and investor concerns. Rockwell Automation quotes the example of a smelter which took a year to commission because of a faulty network device. Another issue is the shortage of technical skills needed to implement a control system predictably and accurately. Poorly engineered systems are only evident after commissioning, when it is too late and the cost and time required for rectification is high.
Procurement risks
If the procurement of technical systems is decided on commercial criteria alone, the quality and outcome of a project is uncertain.
Maintainability
The ever declining skills base in the industry heightens the risk around system maintenance. Often an OEM only supplies the hardware and software for a project, not the engineered component, but meanwhile support is required at the application level. Most upgrades are forced by old software that can no longer be fixed, which then triggers an upgrade. If there is a standard that is constantly and easily managed, the system can be kept up to date indefinitely and never needs a re-engineered upgrade.
The role of the automation company
All of these factors can have a major impact on the three business risks highlighted and show themselves every day. To mitigate these risks, an automation supplier needs to have the right product portfolio for the process control system, as well as the right approach and methodology for the predictable and consistent implementation of the system. The vendor also needs to understand the business risks that mining companies face and have a mitigation strategy.
The key is to find a way to concentrate the few skills already available and eliminate complexity. With a standardised solution, systems are easy to maintain and require fewer people to do the same work. Six plants with the same system only need one trained person for maintenance instead of six people for six different plants. From a capital cost point of view it is also important for the supplier to offer a control solution with a predictable outcome and proven performance before the start of the project. From a cost inflation perspective, a standardised solution with reusable modules can prevent runaway costs during project execution and allow delivery of the project to plan.
Rockwell automation’s mining solution
To achieve this, Rockwell Automation’s Global Solutions division has developed its fully integrated Mining Solution using the PlantPAx process automation system. Based on decades of experience in the mining industry, this solution has an integrated process control system based on standardised and reusable control modules. It addresses the skills shortage by implementing a standard, predictable solution with minimum complexity, giving enhanced control and standardised delivery. Its strength and competitive advantage is its scalability and ease of use.
The Mining Solution is controller-centric, with the functionality being driven by Rockwell Automation’s leading edge ControlLogix controllers. This adds reliability to the system without additional complexity. Reporting is simplified by using a set of predefined templates with controller-based records. Standardised programming with improved diagnostics and reporting improves ease of maintenance and reduces the risk of unauthorised or improper changes to the system. It removes the detective work from fault finding, providing many options to visualise diagnostics. The Mining Solution also contains built-in compliance and auditing capabilities and advanced alarming, ensuring even greater protection of the investment made in the system.
For the instrumentation, Rockwell Automation has a global partnership with Endress+Hauser, using FDT technology to link the instrument to the intelligent motor control units and downloading parameters to the device to configure it, so the operator does not have to be an expert. This elevates the performance of the diagnostics massively. FDT technology allows interchangeable devices to communicate through a multi-platform interface so control systems can accept different types of instruments without re-engineering.
Everything is simulation tested and Rockwell Automation knows before installation that the system will work, so software can be loaded with confidence.
The Mining Solution was first implemented in 2001 on an acid plant on a platinum mine so it is a very mature technology. It is still running today, with only the controllers being upgraded as Rockwell Automation’s developing technology improved their performance over the years.
Rockwell Automation quotes an example of an ore processing plant which runs smoothly for months until an operator makes a small change, resulting in a drop in yield of a couple of percent. This translates to significant amounts of produced metal and can change the whole investment model of the mine. This is a risk that a well designed automation system can mitigate. With the Mining Solution no change can be made without the change being logged and reported in an audit trail. This is a huge advance over the situation 20 years ago, when a mine would have a few controllers, with no real process control and no data recorded.
Nowadays mining companies are forced by law to carry out metal accounting and this puts pressure on control systems to predict recoveries, calculate the amount of metal produced and generate data. A potential problem is that a control system can stop controlling properly because it is so busy producing data. It is important to get the right information on both the process control and the financial side, and here again Mining Solution can play a mitigating role.
One of the issues with junior miners is that although they start small, most grow organically until the control systems reach a crossover point where they have to invest millions to re-engineer. With Mining Solution a system with a tank and two pipes can be scaleable to as many controllers as required on a single system. This is a critical point to consider early on in a project.
Simulation training
Customised training in a simulated environment is a big part of the offering. Rockwell Automation, when deploying Mining Solution offers simulation training on systems of an actual plant with full process simulation software on operator training stations for each actual project. Plant software is uploaded directly to the training system so operators use real live software. It is also possible to set up scenarios and see how the operator reacts. Again the repeatability makes training simpler and many companies have formalised the Mining Solution’s simulations into training systems.
Consistent delivery
Rockwell Automation has very close relationships with its mining customers. When times are bad capital expenditure tends to become operational expenditure, and Rockwell Automation plays a role here too, becoming true partners with the mining companies.
Rockwell Automation’s Global Solutions division has 3000 engineers on a global basis who can implement the same solution on similar plants on any continent. And lastly in order to be able to consistently deliver the Mining Solution to the market Rockwell Automation South Africa has one of the largest professional engineering teams in the industry. End-to-end engineering, project management, simulation, commissioning and life cycle management all form part of the delivery.
For more information contact Hein Hiestermann, Rockwell Automation, +27 (0)11 998 1000, [email protected], www.rockwellautomation.co.za
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