As slowdown looms, Pilbara will need networks to thrive

The Pilbara has had a remarkable boom in recent years, but with the current slowdown comes questions about its long-term future. The need to diversify the local economy is obvious, but how do you do this? In our report, Pilbara 2050 we have explored how networked infrastructure could help in this transition.

The Pilbara’s energy generation, transmission and rail systems are operated separately by mining, petroleum and energy companies on a combination of gas and diesel with very little grid present. The result is high costs and carbon emissions. Connecting the existing power infrastructure into a grid would not only make a more resilient system, but it would enable electrifying of the railroads and mining pits which would reduce everybody’s operating costs and massively reduce carbon emissions.

Agriculture is emerging as a viable alternative to the region’s mineral resources, now that much more water has been found. But the fundamental question remains: where will power come from and how will bulk goods be transported? Renewable energy has a big future in the Pilbara as the area has the highest concentration of solar radiation on earth. Diesel could be replaced with renewable energy at a much lower cost. It would also create the pre-conditions for other more energy intensive industries to establish themselves. Without it, they will likely choose other regions to set up shop.

Attracting new businesses requires a lower cost base

A study by Regional Development Australia found the cost of doing business in the Pilbara is 40% more expensive than Perth and even higher when compared against other parts of Australia. Much of this cost is due to a premium placed on the price per kilowatt hour of electricity from more expensive inputs. It would seem sensible to try and find mutually beneficial solutions like the completion of power grids and shared rail systems to lower the costs of operating in the region.

These ideas are not new, but historically mining and petroleum companies prefer to just look after their own power and rail systems. This week, former Western Australian Labor MP Larry Graham said “private companies that built and own the railways will not, and should not, put their vital lifelines under someone else’s control”.

This raises important philosophical questions: do governments have the requisite capabilities to manage the infrastructure issue? And to what extent is competition affected by creating integrated networks?

For answers, we have looked at other international locations that have faced a similar predicament and either through government intervention or market-based decision making, have worked to link common networks to the benefit of all.

Network options

State sharing

The Central Electricity Board was established in 1926 in the UK to standardise the nation’s electricity supply. Until then, the industry consisted of more than 600 electricity supply companies and different areas operated at different voltages and frequencies. The Board established the UK’s first synchronised AC grid, which by 1933 covered most of England. In 1938, this started operating as a national system called the National Grid. The Board was dismantled when the grid was nationalised in 1947.

Private integrated

In the airline industry, a codeshare agreement is an arrangement where two or more airlines which compete for the same markets, form a strategic alliance to share the same network routes. A ticket can be purchased from either carrier, but the flight itself is actually operated and managed by only one of the participating airlines. Under such agreements, costs are shared between the carriers who might otherwise struggle to make the flight route economically viable on their own.

Private and government integrated

The London Underground opened in 1863 and was the world’s first networked train passenger system. It was originally built by private enterprise but nationalised in 1948 and since then has been run under a combination of private and public partnerships.

In the UK, various aspects of the mobile networks are shared, including with the government. In Australia, for example Optus and Vodafone share mobile towers and network coverage to provide better services at a lower cost to customers. Since 1991, cash ATMs are another example of privately shared networks.

Shared value approach

In Canada, the oil sands industry has historically operated with separate parallel entities, ignoring the cumulative environmental impacts of their activities, resisting further environmental legislation and the need to talk to one another. But an approach called Shared Value developed by Harvard professors Mark Kramer and Michael Porter, resulted in Canada’s Oil Sands Innovation Alliance being established, in which major companies have shared more than 560 technologies worth a total of US$900 million.

Getting the public/private balance right

The argument that private companies would – and should not – cede control over access to critical infrastructure is not borne out in these case studies. Despite often cited business concerns around the loss of control and risks to business continuity, evidence suggests that in fact integrated public planning can be extremely cost effective and everybody is a winner.

There can be big benefits for all when you get a proper network going. In the Pilbara, the private sector hasn’t been good at that. Until now, there has been a reluctance to push ahead with utilising the existing electricity transmission infrastructure to create an interconnected grid. The outcome of legal attempts for greater rail sharing has often seen the requirement for sharing lessened.

To secure its future, the Pilbara needs to diversify beyond mining.
Will Russell/AAP

Graham also argues that governments have an “inability to operate effectively”. The Pilbara Development Commission and Pilbara Cities has shown government has plugged a great deal of the infrastructure deficit in the Pilbara created from the commodities boom.

At the heart of this debate is whether the private or public sector can deliver best. Governments and business can and do work together well. The biggest functioning networks are always built by an integrated state.

With the right philosophical basis, West Australian problems could be addressed holistically. In the Pilbara, without the creation of mutual networks and benefits of scale, the economic diversification prize will remain illusive.

The Conversation

Jemma Green has received funding from The Dampier Port Authority.

Peter Newman and Jemma Green received funding from Dampier Port Authority for the Pilbara 2050 Report

This article was originally published on The Conversation.
Read the original article.

In the Airbnb world we need a new productivity measure

The latest report on Australia’s productivity performance wasn’t good news. The annual update by the Productivity Commission confirmed Australia continues to lag most other developed economies, and has done so now for more than a decade.

Our productivity woes are blamed – by the Productivity Commission and others – on a range of factors, from falling terms of trade as the commodity prices boom fades, the high Australian dollar and natural disasters, through to poor management skills. Even our labour-intensive artisan bakeries and small vineyards get a mention.

What’s needed is the transformation of our national productivity, underpinned by value creation through intangible resources – rather than unprocessed raw materials – and driven by a coordinated, strategic approach to productivity and management.

The reality is we produce services, not just widgets, so it’s time to put the P into productivity – in the form of people.

My just completed research into productivity for service and network-based firms shows that a paradigm shift is required. The traditional input-process-output production model is reductionist and outdated. Instead I propose new measures that incorporate customer input and technology integration, both of which play a critical role in the modern firm’s productivity.

A multi-level approach to productivity.
Author

Productivity is not flat

Manufacturing processes are built for scale, with goods production largely standardised, produced away from the market and with little direct customer input. Service, on the other hand, relies on interactions between people, technology as an enabler and greater use of networks. This changes the dynamics of how we work.

Let’s go to the health sector for an illustration. “Lean manufacturing” principles are often applied to hospitals, with the aim of getting patients in and out within, say, four hours. But is a person with a head injury or someone having a heart attack the same as a car being assembled using standardised parts, in a fixed and measured time? The truth of the matter is hospitals require very skilled staff who can collect, analyse and synthesise data from people and technology, processing this in real time to make decisions with life or death consequences. That’s hardly the same as assembling 100 Toyota Camrys.

The role of the customer is another aspect affecting productivity. You can produce a car without a customer – but try to deliver a service with no customer. The customers and their input into the service delivery process is fundamental to service firms, which now account for more than 85% of gross domestic product and employ over 85% of Australia’s workforce. Increasingly, organisations are using self-service technologies and online tools to co-create services with customers. The customer helps to create value. Think of Apple’s App Store, where people who were once just customers are now also app developers.

In a sharing economy, in an era of collaborative consumption, consumers buy from consumers via enablers such as accommodation portal Airbnb and share-ride service Uber, placing customers as competitors to traditional businesses.

This customer input into the service delivery process fundamentally changes the nature of how “value” is created, captured and appropriated. But customers and customer input is not included in the current productivity equations despite being a “factor of production”.

Technology dis-integration

Information communication technology (ICT) is also critical as it connects customers, organisations and suppliers. Technology adoption is often cited as an indicator of productivity. But my research shows it’s not adoption in and of itself that delivers gains but ICT integration that matters.

Take, for example, the travel and tourism industry, which is regarded as a prime user of technology. My research shows that while there is a high degree of adoption of ICT, the lack of integration between systems, across stakeholders, is a major inhibitor to service productivity in this sector.

Information is still being reformatted, rekeyed and redistributed manually within organisations, sometimes among five different ICT systems. This lack of systems integration leaves organisations with a hole in the centre. As business struggles to connect with customers using a range of “must-have” platforms, such as Facebook, Twitter, Google+ and LinkedIn, the problem worsens – the hole gets even bigger.

Our productivity problem is a like an epidemic. It affects many businesses and threatens the prosperity of future Australians yet it is poorly understood and goes largely unnoticed, especially in a service economy. If a problem of this size and scale were to affect people’s health, money would be raised for further research to isolate the causes and cures for the malady.

The problem requires attention and funding from policymakers to foster initiatives aimed at tackling productivity failure. Collaboration is required, with business sharing transactional data and industry intelligence with academics and researchers, so together they can identify gaps and benchmark within and between industries, with the goal of achieving the productivity increase needed to maintain our standard of living.

The Conversation

The authors do not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article. They also have no relevant affiliations.

This article was originally published on The Conversation.
Read the original article.

QME 2014 Preview: ​Cyclone proof reinforced concrete

Helix Steel
Australasia will display their revolutionary
reinforced concrete on stand F229, as first-time exhibitors, at the 2014 Queensland Mining & Engineering (QME) Exhibition.

After entering the Australian market only four years ago,
mining companies such as Rio Tinto, Anglo Coal, APLNG, Newcrest Limited, KBL
Mining Limited and Peabody Energy have already adopted the Helix Micro-Rebar
solution.

Unlike traditional reinforced
concrete, Helix Micro-Rebar is based on a structural composite material that
combines concrete and reinforcement into one system instead of two.

This means Helix Micro-Rebar
is tougher, more durable and has a greater flexural capacity.

It outperforms all other
reinforcement systems such as mesh, rebar, and steel, polypropylene and
fiberglass fibres.

Additionally, this product
requires less than five minutes to mix and by eliminating the requirement for
rebar, the construction time of jobs such as concrete slabs is greatly reduced.

Helix Micro-Rebar meets the efficiency, productivity and
cost-saving requirements of the Queensland mining sector, as a concrete
solution that is easily applied, more robust, safer and more cost-effective
than traditional rebar and mesh.

Mining companies have reported up to an 80 per cent saving in
their reinforcement costs and a 50 per cent reduction in scheduled time as a
result of using Helix Micro Rebar for concrete work projects.

Helix is also currently being used in the construction of
‘storm resistant’ or ‘tornado proof’ housing across America.

Designed to also emulate
structural rebar steel, Helix Micro-Rebar is an excellent alternative to
reinforced concrete and is a viable replacement for structural supports such as
columns, piers, beams and structural wall panels.

This ensures Helix Micro-Rebar
is your concrete and reinforcement solution for all industrial, mining and
infrastructure applications.

QME 2014 Preview: Conveyors and belt equipment

Flexco
will be addressing splicing,
cleaning, belt slippage, and material transfer needs at booth A292 at QME.

Flexco invites
attendees to check out their newest products, including an in-depth look at
Flexco transfer chutes, featuring exclusive Tasman Warajay Technology.

Flexco will
also be showcasing CoreTech Nylon Conveyor Rollers, which are lightweight, high
strength, corrosion-and abrasion-resistant making installation and maintenance
of conveyor rollers on site faster, easier and safer.

Also on display
will be the Pneumatic Single Rivet Driver, which speeds installation of SR
fasteners by up to 33 per cent, FLEX-LAG pulley lagging, mechanical belt
fastening systems, and the latest in the line of innovative Mineline belt
cleaners for serviceability and wear resistance in the toughest applications.

The Flexco booth will be staffed by product experts eager
to answer questions and demo products. Experienced Flexco team members will be
available to discuss the entire conveyor system and help attendees identify
challenges and ways to increase the efficiency and productivity of their
operations.

Austin Engineering acquires South African mining supply company, launches new bucket

Austin Engineering has expanded its mining bucket range, and will acquire South African mining attachment business VR Steel.

The company has announced an MoU to acquire 74.9% of the shares in Van Reenen Steel.

The $21.8 million acquisition will see Austin enter into the deal with VR Steel’s Black Economic Empowerment (BEE) partner, the Building Exciting Education Trust, which will maintain a 25% plus one share holding.

According to Austin, the acquisition is part of the company’s wider acquisition strategy.

This latest takeover “provides a low risk entry in to the African mining products market; exposure to the China market and manufacturing capabilities;  exposure to the US/South American/Indonesia market for draglines, dippers, and shovels; and opportunities for Austin and VR Steel to cross-sell their product to each other’s customers in their traditional markets”.

It will also add the VR truck body to its range, expanding upon the Westech range it already has.

Austin managing director Michael Buckland said “the combination of Austin Engineer and VR Steel will see a clear market leader on a global basis delivering a range on non-EOM products within the industry”.

It is also carrying out due diligence on two other acquisition targets.

Austin Engineering has also released a new EX8000-6 bucket design.

The new bucket is designed with Hitachi’s recommended maximum envelope, including correct boom stick geometry, boom and stick clearance, cab and deck structure clearance, and maximum suspended load.

Importantly “end users can be assured that there will be no warranty implications with their machine,” Austin stated.

Sandvik launches new high productivity centre in Orange

Sandvik has officially opened a new repair and remanufacturing centre in Orange.

The $5.5 million centre, which will focus on hard rock mining equipment, incorporates a high tech repair and rebuild facility as well as a paint booth and parts warehouse.

When asked why it was opening a new support facility in midst of a mining slowdown, Sandvik Mining’s vice president Jim Tolley stated “mining is always cyclical, and this is a time where we have breathing space to regroup for the future”.

According to Sandvik the Orange facility “has been purpose-built to help it better serve the needs of the mines in the region, and improve safety performance in line with its customer requirements”.

Speaking at the opening, Sandvik’s Jim Tolley said the site is focused on “raising the standards for equipment turnaround and efficiency”.

Tolley went on to say “it incorporates a state-of-the-art workshop and a warehouse, each of which are larger than our entire previous facility in Orange – and because of our standardised processes and readily available spare parts, we can provide rapid and cost-efficient repairs”.

“This includes the ability to rebuild equipment to as-new condition, to Sandvik’s OEM specifications and standards, and with full factory warranty.”

He explained that there is a major focus on aftermarket service for the company, with around 75% of Sandvik’s staff worldwide dedicated to customer support, and an aim to increase efficiency in the area.

“In the aftermarket we haven’t see very high productivity gain, which is why we’re introducing the high productivity methodology in to the aftermarket business. We’re focusing on driving out waste in aftermarket and support.”

Sandvik are doing this by “looking at the process in a holistic way and investigating lean systems and six sigma”.

In doing this, Tolley said the company has cut the average remanufacture time from 15 000 hours down to 10 000 hours, and is looking at driving it even further down”.

Sandvik’s productivity manager Drew Zammitt explained that has been done b “applying different rebuild techniques over traditional technical, and creating lean rebuild bays to limit excessive movement”.

The facility will also house field service technicians.

Our field service technicians can also carry out machine inspections, advise on operational and maintenance practices, and assist customer technicians,” Tolley said.

“Whether it’s scheduled or unscheduled maintenance calls, our field service technicians have the in-depth product knowledge and rapid support response to get customers’ equipment up-and-running as soon as possible.

According to workers on the site, the technicians can get as many as three to four call-outs a day over the weekend.

The facility will employ approximately 40 people on site, but may expand as more nearby mines come online, and major expansions such as East Cadia, occur.

“We can currently do about four times the current level of work at this facility,” Tolley said, “without expanding the site, but we do expect more work once Cadia expands and East Cadia comes online.”

The centre is one of four nationally, with the others located in Perth – focusing on hard rock mining; Heatherbrae – focusing on coal mining for NSW; and Mackay, which focuses on coal and hard rock mining.

During the launch the company also announced that it will be releasing an automated production and development drill next year, with Sandvik explaining that “we’re looking to take more information from the face during operation and bring in more mining planning software, and automation will allow us to do this”.

The 2014 Queensland Mining and Engineering Exhibition

One of Australia’s largest mining exhibitions is ramping up
and Mackay is prepping for the influx as the industry swarms the Queensland
town.

The Queensland Mining and Engineering Exhibition will
celebrate a milestone as it reaches its 21st year.

The show will held during a tumultuous time for Queensland
mining industry, as the state’s main mining sector – coal – is facing a serious
downturn.

Speaking on the timing of the event, REEDMININGEVENTS
director Paul Baker described the exhibition “as an indicator of where the
Queensland mining industry is currently situated and where it is headed”.

“QME is really a snapshot of where the QLD mining industry
is positioned and where it is heading. QME 2014 is focused on providing
solutions that result in better productivity, better efficiency, and better
optimisation.

“At QME exhibiting suppliers will be offering solutions that
are designed to improve efficiency, increase productivity, and optimise mine
site operations – solutions designed to result in ‘better mining’,” Baker said.

“I would expect that with any ‘realignment’ or ‘shift’ in
the industry the importance of exhibiting and visiting QME is greater as the
necessity of the solutions on display is more pertinent than ever before.”

First held in 1993,
the event has continued its focus on providing attendees with innovative
technological solutions and techniques designed to improve mining efficiency
and productivity.

And this year is no different.

The TechTrails, which featured at Reed Exhibitions’ National
Manufacturing Week, will also be making their appearance at the Queensland
Mining and Engineering Exhibition.

These TechTrails are designed to “filter attendees to stands
based on their product or service categories, maximising their face-to-face
time with suppliers that have solutions to meet their business needs”.

These trails include automation; engineering; environmental
management; materials handling; minerals processing, open cut mining
technology; operational safety; underground mining technology; as well as one
highlighting new exhibitors to the show.

“Pioneered at AIMEX 2013, the TechTrails initiative will act
as a filtering system that navigates attendees to suppliers who have the
solutions that relate to their business needs,” Baker said.

It has also developed a standalone QME mobile app, which can
be used offline, and allows users to create a profile, preselect suppliers to
visit, and engage with others users at the show.

“This year at QME we have incorporated various strategies to
ensure that visitors’ time onsite is as efficient as possible, by connecting
them with the suppliers of their choice, to maximise their experience. As a
result decision-makers and attendees will be afforded an unrivalled platform to
source the latest ground-breaking solutions that stem from technological
advances and innovation,” he said.

‘The TechLab’ is also a key feature of the show.

It will showcase new step change technology and supports the
focus of the exhibition to be a platform for mining companies to source new
innovations for mining processes.

As part of this hub within QME’s Interactive Zone there will
also be a series of TechTalks that will be delivered by a number of exhibitors,
and is just one of a number of free education streams available at the show.

However the event this year is not just about the equipment
and technology.

According to REEDMININGEVENTS it “has introduced a range of
measures aimed at providing attendees and suppliers with the best experience as
possible at QME, with a number of new initiatives being implemented, which
includes a QME mobile app, theme days such as the Women in Mining Day, and a
new mechanism that maximises the time of visitors with suppliers of their
choice and a hub for step change technology”.

In the vein of all of its recent mining events, its Women in
Mining theme day will take precedence during the exhibition and conferences.

On the Wednesday night of the exhibition, QME will partner
with the Bowen Basin Mining Club to present the inaugural Queensland Mining
Contract Awards, which will showcase and celebrate the achievements of the QLD
mining sector, and recognise the success of the METS sector in the region.

QME will run from the 22nd to the 24th
of July.

​Sandvik launches new high productivity centre in Orange

Sandvik has officially opened a new repair and
remanufacturing centre in Orange.

The $5.5 million centre, which will focus on hard rock
mining equipment, incorporates a high tech repair and rebuild facility as well
as a paint booth and parts warehouse.

When asked why it was opening a new support facility in
midst of a mining slowdown, Sandvik Mining’s vice president Jim Tolley stated “mining
is always cyclical, and this is a time where we have breathing space to regroup
for the future”.

According to Sandvik the Orange facility “has been
purpose-built to help it better serve the needs of the mines in the region, and
improve safety performance in line with its customer requirements”.

Speaking at the opening, Sandvik’s Jim Tolley said the site
is focused on “raising the standards for equipment turnaround and efficiency”.

Tolley went on to say “it incorporates a state-of-the-art
workshop and a warehouse, each of which are larger than our entire previous
facility in Orange – and because of our standardised processes and readily
available spare parts, we can provide rapid and cost-efficient repairs”.

“This includes the ability to rebuild equipment to as-new
condition, to Sandvik’s OEM specifications and standards, and with full factory
warranty.”

He explained that there is a major focus on aftermarket
service for the company, with around 75% of Sandvik’s staff worldwide dedicated
to customer support, and an aim to increase efficiency in the area.

“In the aftermarket we haven’t see very high productivity
gain, which is why we’re introducing the high productivity methodology in to
the aftermarket business. We’re focusing on driving out waste in aftermarket
and support.”

Sandvik are doing this by “looking at the process in a
holistic way and investigating lean systems and six sigma”.

In doing this, Tolley said the company has cut the average
remanufacture time from 15 000 hours down to 10 000 hours, and is looking at
driving it even further down”.

Sandvik’s productivity manager Drew Zammitt explained that
has been done b “applying different rebuild techniques over traditional
technical, and creating lean rebuild bays to limit excessive movement”.

The facility will also house field service technicians.

Our field service technicians can also carry out machine
inspections, advise on operational and maintenance practices, and assist
customer technicians,” Tolley said.

“Whether it’s scheduled or unscheduled maintenance calls,
our field service technicians have the in-depth product knowledge and rapid
support response to get customers’ equipment up-and-running as soon as
possible.

According to workers on the site, the technicians can get as
many as three to four call-outs a day over the weekend.

The facility will employ approximately 40 people on site,
but may expand as more nearby mines come online, and major expansions such as
East Cadia, occur.

“We can currently do about four times the current level of
work at this facility,” Tolley said, “without expanding the site, but we do
expect more work once Cadia expands and East Cadia comes online.”

The centre is one of four nationally, with the others
located in Perth – focusing on hard rock mining; Heatherbrae – focusing on coal mining for NSW; and Mackay, which focuses on coal and hard rock mining.

During the launch the company also announced that it will be
releasing an automated production and development drill next year, with Sandvik
explaining that “we’re looking to take more information from the face during
operation and bring in more mining planning software, and automation will allow
us to do this”.

​Bradken to close manufacturing facilities, cut jobs

Bradken has announced it will be shutting down its “highest
cost manufacturing facilities” and cutting its workforce.

It follows the manufacturer’s announcement of a “reorganisation
of its manufacturing” in an aim to reduce the company’s operating costs by $27
million annually.

“Bradken intends to progressively close a number of its
highest cost manufacturing facilities and reduce associated costs and by
transferring work,” it said in a company statement.

It went on to state “the reorganisation is expected to see
Bradken’s total employee numbers reduced to 4700, down 10% from December 2013
and 25% down from the peak in September 2012”.

In August last year it cut more than a 1000 jobs globally, from its workforce at the time 5425, cutting its Australian contingent by 14%.

Bradken last week announced it is closing its Henderson
foundry in Perth and relocating the work to its Runcorn foundry in Brisbane and
Xuzhou foundry in China.

As a result of these reorganisations there will be a large
one-off charge of approximately $51.4 million before tax, which related mainly
to retrenchment costs, plant and equipment write-offs, and site closure costs.

Bradken was contact for comment but was unavailable at the
time of publishing.

.

Emeco exits Indonesia

Emeco has announced it will completely exit Indonesia and downsize business in the region following a strategic review.

According to the heavy machinery hire and rental company “closure will remove annual operating costs of $3.5 million and realise cash of $40 million in the second half of 2014”.

It first announced the downsizing of the Indonesian business and subsequent review of its operations in the region in late 2013, around the same time it announced a new managing director and CEO Ken Lewsey.

“With this review now complete, Emeco has decided to exit the market due to expected poor earnings from the business over the long-term given the unfavourable conditions in the Indonesian mining industry,” it said in a company statement.

“The dynamics of the Indonesian mining industry do no support us maintaining an ongoing presence in this market,” CEO Ken Lewsey said.

“Our strategic review considered a range of factors, including uncertainty of government policy for the mining industry, significant excess equipment in the market and the diminishing quality of the customer base. This has led us to conclude that utilisation is likely to remain very low for an extended period.”

Emeco plans to sell off some of its hire and rental fleet in the region, with around $10 million worth of equipment to be relocated to Australia.

“Closing the Indonesian business removes an operation that has been loss making in recent years and releases capital which can be directed towards other opportunities in the future. This will allow us to focus our time on driving improved utilisation across our three core markets of Australia, Canada, and Chile and also exploring broader strategic options for the company,” Lewsey said.

Emeco has also downgraded its operating EBITDA forecast down from between $82 million- $94 million to only $72 million – $72 million.

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