Gate Dispatch

Aren't All Truck Bodies The Same?

Posted by LeRoy Hagenbuch on Jul 11, 2016 9:00:00 AM

Off-highway mining-class truck bodies might look the same, but utilize different technologies that can vary the outcome of their efficiency, greatly. Many people thing that truck bodies built today are the same as those built 5, 10 or even 20 years ago - that simply is not acurate - at least truck bodies engineered by Philippi-Hagenbuc.

An example of this is to look at houses - one can look at a couple of houses and on first appearance these houses may both look the same. But, on taking a second or third look at these similar looking houses one may find on the inside two entirely different structures.

 Is it the same with truck bodies?  In many instances YES!

 Let me explain; over the years, we have re-engineered and refined the design of our off-highway truck body. Where truck manufacturers put most of their product improvement and design efforts towards the truck chassis itself; Philippi–Hagenbuch, Inc. on the other hand have put a concentrated effort into improved overall truck performance keyed on improved truck body features and design.

Here at Philippi–Hagenbuch, Inc. we have made improved truck performance through better matching of truck chassis and truck bodies a science. Though two different truck bodies on the outside may look similar, when learning about the unique differences in these two different bodies, the unique attributes become very clear!

What are some of the differences that Philippi–Hagenbuch, Inc. exclusively designs into their truck bodies?


PHIL Truck bodies:

  1. Have a body floor super structure that supports in the Loading Zone upwards of 90 percent of the Floor;

  2. Are designed to have a wider inside width which facilitates easier and quicker loading Shovels;

  3. Have sidewalls that taper outward which reduces load dumping time;

  4. Are designed with greater ground dumping clearance which reduces dump site dozing; they're designed so that material is dumped over the bank and not into the dump bank;

  5. Have an automatic loading debris deflector built into the side of them to prevent side loading spillage from falling on or under the truck drive tires;

  6. Having a slightly wider inside loading width means loading shovels when loading, will be able position the shovel bucket lower to the body and reduce body loading impacts upwards of 30 percent;

  7. Have a improved body tail chute that minimizes haul road rear end spillage;

  8. Will, through the body design, reduce and almost substantially minimize loading area truck tire cutting;

 

Truck Bodies from different sources may look the same; but just as with houses the outside appearance never tells the full story.

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Topics: Mining, HiVol(R) Bodies, Engineering, Carryback

Reclaiming a Mine: How Abandoned Mines are Getting a Second Life

Posted by Abby Meister on Jul 6, 2016 9:00:00 AM

Over the past 40 years, we as a society have become more and more aware of the need to protect the environment where we can – an understandable concern considering the fact that damage done during the industrial revolution continues to impact our environment even now. In the environmentally conscious world we now live in, the mining industry is often cast as a villain, leaving contaminated resources and ravaged habitats in its wake. Not even the industry can deny that mining - especially as it was done in the past with few, if any regulations - can be destructive; leaving toxic and hazardous materials scattered around haphazardly is not the best way to secure the future for the generations to come.

What many people don’t realize, is that the mining industry has been making significant strides in mine closure processes that efficently and effectively return mines to either their former glory, or makes them habitable for some other purpose.  Mine land reclamation and closure plans are being required by the ever increasing number of regulatory agencies around the world, and are often included in the environmental impact assessment process (practiced by over 100 countries) that are part of the consideration process to determine whether or not a company will be allowed to start operation. We may not be able to change the past, but the industry is changing the future.

The Closure Process

So how does this closure thing work? you may be asking. Mine site rehabilitation is now integrated into the early planning of a mine, often before any actual mining occurs, and is an ongoing consideration through the mine’s lifetime both financially and technically. Mine closure typically consists of several steps that can be efficiently executed with long-term planning:

  • Shut-down: Once production comes to a halt, a small labor force is retained to permanently shut down the mining equipment.
  • Decommissioning: The mining processing facilities and equipment are taken apart/decommissioned, pipelines drained, equipment parts cleaned and sold, buildings repurposed/demolished, warehouse materials recovered, and waste disposed of.
  • Remediation/Reclamation: The land and watercourses are returned to an acceptable standard of productive use (landforms and structures are stable, watercourses have acceptable water quality). Reclamation typically involves removing hazardous materials, reshaping the land, restoring topsoil, and planting native grasses/trees/ground cover.
  • Post-closure: The reclamation is monitored to assess the success of the process as well as identify any issues that need corrected. Some mines can require long-term care and maintenance after closure.

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Lake on the site of the former Big Brown Mine in East Texas, now used for genetic research of large mouth bass.

Covering the Costs of Closure

The ups and downs of the mining industry can make the financial stability of companies tenuous, and in the past mining companies have been financially unable to finish the reclamation of a site due to unforeseen circumstances. For this reason, mining companies post reclamation bonds (or deposits) at the start of the project to guarantee that they can financially meet the requirements of safe closure. The bond amount can range from thousands of dollars to millions, depending on the size of the mine and the jurisdiction the mine is located in.

Different agencies have different requirements, even on a state by state basis in the U.S. For example, Texas determines financial assurance by the mine’s permit conditions, whereas Arkansas requires financial assurance covering the complete cost of the cleanup. Agencies around the world have a wide range of varied requirements, as well. Australia determines financial assurance on a case-by-case basis, while India requires a fixed sum per hectare.

While financial assurance programs are relatively new and have not been fully utilized by all jurisdictions, the reclamation process has been greatly improved by the requirements. The majority of officials surveyed in Canada, South Africa, and the U.S. reported that the financial assurance programs were generally effective.

Steps of a Mine Closure Plan

Closure plans are specific to each mine and include a detailed strategy of how the company will close the site, how environmental protection will be reached, and how the site will be returned to an acceptable state. The Four R’s represent the four distinct steps in preparing a site for another use.

  • Remediation: Cleaning up contaminated areas by removing/isolating contaminants.
  • Reclamation: Physically stabilizing the terrain, landscaping, restoring topsoil, and returning land to a useful purpose.
  • Restoration: Rebuilding the ecosystem that existed at the site before it was disturbed.
  • Rehabilitation: Establishing a stable/self-sustaining ecosystem (not necessarily one that existed before mining). Sometimes complete restoration is impossible, however a successful completion of all four steps can result in a functional ecosystem.

St. Kinga's Chapel, underground cathedral in the Wieliczka Salt Mine, Poland.

Potential Uses for After Closure

Many mine sites are returned to their pre-mine use (often wildlife habitat, forest, grasslands, etc.), however innovative new ways to repurpose abandoned mines both above and below ground are being thought of and implemented each year for mines that can't be completely restored to their pre-mine state.  A trend is on the rise leaning toward the concept of economic sustainability, leading to some very creative new uses of decommissioned mine sites around the world. Repurposing abandoned sites is not only beneficial to the environment, it is also huge for local economies, especially areas that were hard hit by unemployment rates when mines were closed.

The economic contribution of taking advantage of existing infrastructure, plus the boost to the local economy has led to former mine sites being used as museums/educational centers (ex. Britannia Mine Museum, British Columbia), visitor attractions (ex. Wieliczka Salt Mine, Poland), scientific centers (Sanford Underground Research Facility, South Dakota), recreational areas (Gotland Ring, Sweden; Zip World, Wales), gardens or parks (Butchard Gardens, British Columbia), fish farms (AngloGold Ashanti Homase Mine, Ghana), data storage (Iron Mountain, Pennsylvania),  agriculture (Big Brown Mine, Texas), golf courses (Armada Golf Club, Poland), and even underground theme parks (Salina Turda, Romania)!

The agency leading the charge for mine reclamation in the United States is the Office of Surface Mining Reclamation and Enforcement (OSMRE). Created in 1977 after Congress enacted the Surface Mining Control and Reclamation Act, OSMRE works to ensure that citizens and the environment of the U.S. are protected during mining and that the land is restored once the mining is finished. Since OSMRE's inception, more than 2.8 million acres of mined lands have been restored to beneficial use by mining companies – including more than 100,000 acres of coal mines abandoned long ago. It's not a fast or simple process - worthwhile endeavors rarely are - but the results and future impact make it worth it!

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Topics: Mining, Environment, OSMRE, Mine Closure, Reclamation

An Interview with Michael McCafferty on the PHIL Material Spreader Attachment

Posted by Abby Meister on Jun 29, 2016 8:48:02 AM

mmccafferty-2012.pngMichael McCafferty, PHIL's Director of Mining Products (pictured), has been working in the mining industry since 1989 and has been with Philippi-Hagenbuch, Inc. for 18 of those years. Over the course of his time in the industry, he has gained great insight in customer service - specifically, what it means to truly listen to what customers are saying and to work tirelessly to find solutions to their problems. The PHIL Material Spreader Attachement for the PHIL Rear Eject Body was an idea that began to formulate after talking with a customer. Here are his responses to some questions we asked him.

 

Q. Where did the idea of the Spreader Attachment come from/when did you first start thinking  of adding an attachment to the RE Body? 

A. Initially the thought came from using the rear eject as way to feed a stemming attachment as most mine sites have stemming trucks but they are a variation on a heavy duty on-highway truck.  If you have ever viewed an area where a blast pattern has been drilled you can see why the life of the on-highway trucks is short lived.  When Josh [Swank] and I were visiting Detour Gold in March of 2015, we met with Craig Rintoul, Operations Manager at Detour Gold and during our discussion he asked if we had anything that might work…we showed him Abby’s illustration of the stemming body and one thing led to the next…hopefully soon to a stemming attachment.

Q. Why was getting this product designed and functional important to you? 

A. As with all PHIL products they ultimately pay for themselves through productivity enhancements, cost savings, operational improvements, etc., which allows the customer to invest in our products.  We are looking at this long term along with the ability to use the material spreader for more than just sanding roads in the winter time.   

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Original spreader attachment illustration with branding shown to Detour Gold

Q. Why should operations choose the PHIL Material Spreader Attachment for PHIL Rear Eject Bodies over other sanding equipment? (What does it have that makes is better?) 

A. Typical material spreaders operate in a passive mode of having the material move within the body to the material spinners by utilizing steep slopes within the body which unsafely raises the vertical center of gravity.  Even though these units have vibratory devices on them the material will still have the tendency to bridge which adversely affects the operation of the equipment not to mention the safety concerns on manually having to address the material bridging. 

With the PHIL system we have an active system which physically moves the material to the material spreading device via the combination of the rear eject apron/blade and the cross auger in the material spreader attachment to the material spinners.    One of the key words in your question is the word attachment, which PHIL benefits the customer as the customer has the ability to utilize the equipment as a stand-alone rear eject body, a material spreader, or purchase another PHIL attachment, for example the Material Stemming Unit.

An area where we believe there is great opportunity for these products will be at mines where they are using leaching operations where Portland cement, lime, or ash is used.  The PHIL material spreader will have the ability to more evenly distribute the leaching catalyst improving the efficiency.  Plus the haul trucks will no longer need to alter their haul cycle to pass by the catalyst material silo which should improve the cycle times providing a positive impact on the productivity.

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The finished product in action!

Q. Listening to customers and designing/building equipment that fits their needs is a big part of PHIL’s business philosophy. In your experience, what kind of impact does this approach to business have on customers – knowing that PHIL is doing all that can be done to work out a solution to their production problems? 

A. PHIL is a solutions provider plain and simple.  There have been instances where we are sitting right alongside the customer when they are writing the economic justification for the equipment.  This is representative in the trust the customer places in the relationship between PHIL and the customer.

 

Q: What does customer service mean to you? 

A: Exceeding the customer’s expectations not only with the PHIL product but also with our support.


 




 

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Topics: Mining, Rear Eject, Spreader Attachment, Customer Service, Spreader, Material Spreader

Product Spotlight: the PHIL Material Spreader Attachment for Rear Eject Bodies

Posted by Abby Meister on Apr 21, 2016 12:00:00 PM


A new product was added to the PHIL equipment line this year in the form of the PHIL Material Spreader Attachment for PHIL Rear Eject Bodies. A collabrative design effort from the Sale & Marketing team, Engineering department, and fabricators at Welarco, the three-part system is a safe and easy way to add traction to treacherous roads. Designed to fit the 2016 models of PHIL's patented line of Rear Eject Bodies, the Spreader Attachment includes a Grizzly screen along with the sanding attachment. 

The Spreader Attachement was designed primarily for the mining industry, but it will benefit other applications as well, like aggregates, construction, landfills, and quarries. The PHIL system of spreading virtually eliminates the risk of damaging the equipment and helps save on maintenace costs. The operator has complete control over material discharge, an schievment that cannot be made with the traditional gravity-fed solutions.

 

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The PHIL Material Spreader Attachment on a PHIL Rear Eject Body


All PHIL equipment is constructed to withstand the test of time, and the Spreader Attachment is no different. It is made from Hardox 450 steel and designed for maximum productivity. The attachment's auger and spinners are built out of heavy duty steel designed specifically for the mining industry, and the PHIL Rear Eject Body is built out of high-strength, abrasive-resistant steel to last for years with little more than typciaal preventative maintnenance.


"We are always looking for ways to make our customers' lives safer, more producticve, and more efficient," said Josh Swank, vice-president of sales at PHIL. "This is the first in a series of attachments that will help us achieve our goal of making mines more productive, profitable, and safe. Safety is everything." 

Check out the original press release here: http://phil.mobi/1RY1O7n.

  New Call-to-Action

 

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Topics: Rear Eject, Spreader Attachment, Spreader, Material Spreader

China To Shut Down over 1,000 Coal Mines

Posted by Josh Swank on Feb 23, 2016 9:09:20 AM

It seems almost every day that there's a news story about the downturn of mining. It could be an equipment company laying people off, or a coal mine going bankrupt. What is happening to the global mining sector, one might ask? To fully comprehend what is going on, we have to think back to the tech bubble of 2002. As the saying goes, those that fail to learn from history are apt to repeat it. That holds true in life, war, business, tech, mining, you name it.

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This morning, the headline was "China to close 1,000 coal mines in 2016!" If that were in America, that would be reason enough to panic, but in this case, we need to keep things in perspective. In 2015, China produced 4.1 million tons of coal. That's a lot of coal, but not to our standards. United States coal mines produced 688 million tons of coal in 2015 and that's down from over 1 billion tons of coal produced in 2014!

Interestingly, China has already had mass coal mine closures. In 2014, China closed over 2,000 coal mines totaling 129 million tons of decreased production.

China is trying to minimize an over-supply of coal available in the industry, which will increase coal prices; something that American owned coal companies should be in full support of. As coal has become less relevant to energy production in North America, coal producers in the US have had to stretch their reach, selling their comodity into the Asian and African markets.

We look forward to the coal industry right-sizing itself and getting back on its feet. Hopefully moving forward, production is more in line with demand.

 

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Topics: Mining, Industry News, Technology, Production, Coal

What the Highway Bill (FAST Act) Means to the Quarry Industry

Posted by Josh Swank on Jan 14, 2016 3:57:11 PM


Over the years, there was little hope that a long-term highway funding bill would be signed into legislation. The National Stone, Sand & Gravel Association has lobbied on behalf of the aggregates industry dilligently, but the gridlock in Washington D.C. is staggering, even as potholes and rusty bridges became more apparent across the land.

In December, however, President Obama signed into law a five-year, $305 billion highway funding bill nicknamed the FAST ACT, which stands for "Fixing America's Surface Transportation Act". Yes, it needs fixing.


 

What does this speding bill mean for the aggregates industry and the manufacturers, suppliers, and service companies that support the construction companies that will put this money to work? It means everything. It starts with giving the aggregates producers and construction companies confidence that the work will be there. This confidence turns into capital purchases to expand to meet the increse demand in aggregates and road paving equipment.

It means jobs. Job security, and an increase in good paying jobs within aggregates. Engineers, drivers, welders, clerical staff; there is a job for everyone in aggregates and manufacturing.

 

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Philippi-Hagenbuch is proud to be an active member and participant in the National Stone, Sand & Gravel Association. Aggregates are the bedrock of transportation, and America has one of the best highway systems in the world. Let's keep it that way. Instead of a five-year transporation bill, let's index it with inflation; use the money collected from fuel taxes for transportation instead of bailing out other governmental programs. Let's work. It's time to Do More.

 

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Topics: Quarry, Tailgates, Government Policy

Three Benefits of Having Your Production Plant Next Door

Posted by Bethamy Threw on Nov 24, 2015 2:48:07 PM

As an Engineering Coordinator for Philippi-Hagenbuch, Inc. my duties are interesting and challenging, ranging from nesting parts for the CNC operator in the plant to assigning and maintaining status of work for the Engineering department and relaying this information to other associates in the organization. For those of you who haven’t encountered nesting yet, it is the process of laying out the parts that are to be cut by the CNC (Computer Numerical Control) operator on sheet metal to ensure the best utilization of raw materials. The nesting process is incredibly important because it cuts down on the possibility of over production or under production. From my perspective, having our production plant next door is definitely a check in the ‘Pro’ column for PHIL and here are my top three reasons why.


Seeing Real Time Progress

Having the production plant next door gives us the opportunity to see how the equipment we’re designing is produced. When you’re working on parts or a piece of equipment in a design program, it can be an abstract concept until the actual physical piece is made.  When nesting the parts for the CNC machine, I can walk over to the plant to talk with the operator and watch how the cuts are made. Working closely with the CNC operator helps to better utilize the material. Yes, parts can be nested with the software, but being able see the cutting process makes modifications easier – and that streamlines work flow and reduces costs.  The next door convenience of the plant allows us to watch the design come to life as parts are being manufactured and designs are produced.

20151116_-_Hardrock_inprogress.jpgSeeing a product take shape is not only fascinating, but makes the nesting process more efficient.

Face-to-Face Contact Between Engineers and Manufacturers

It’s probably shocking, but engineers and manufacturers don’t always see eye-to-eye during the manufacturing process. However, being able to create a part and then meet with members of production regularly and discuss the design from a production perspective can mitigate the tension that could otherwise build up over the course of a job. This creates a team friendly environment where everyone can voice their concerns and brainstorm solutions. When the production team has a question on a design, we can go look at the problem and actually talk over the problem rather than get confused and frustrated with communications through email or phone. Plus, we get to see how the design works on the individual part and ask questions about the machines or materials—very beneficial from a learning perspective. In an age where so much is communicated electronically, it is refreshing to be able to connect face-to-face with every member of the process from sales all the way through to shipping.

Faster, More Efficient Work Flow

Oddly enough, nesting software doesn’t always take into consideration all the limitations of the materials and tools used any given job might encounter. Most of the time the engineering department would have no idea there was a problem until a) the production team gave them a frustrated call after having to stop production because a design wasn’t working with the machine, or b) the finished parts all had to be scrapped because they were flawed and couldn’t be used. Neither of those are ideal situations, especially from an efficiency stand point. Time is money. Putting the production on hold or restarting the job is not fast, efficient, or productive.  By watching the design come to life as parts are being manufactured and designs are produced, we can understand these limitations and make real time adjustments – saving a considerable amount of time in the process. With the plant next door, when modifications need to be made, engineers can see how the design works with the press to ensure accurate changes are made quickly and production time is not lost.


 

The efficiency gained from having a setup where engineers can meet with the production team can’t be beat.  Most engineers don’t get the benefit of working side by side with welders and machinists.  The value of learning how the design works with the machines and comes together is often lost and leads to repetitious rework that can take a toll on both frayed nerves and the company’s bottom line. Open communication on all sides and the ability to literally go next door to see the design in action streamlines the work flow process and makes for efficient production.

 

New Call-to-Action                       New Call-to-action


 

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Topics: Engineering, PHIL Campus, Production

10 Things You Should Know About Shale Energy

Posted by Abby Meister on Oct 16, 2015 10:00:00 AM


Fracking - or hydraulic fracturing, as it is formally known - is the process that releases natural gas from shale by shooting fracturing fluid consisting of water, sand, and chemicals at shale rock. While the roots of hydraulic fracturing can be traced back to 1865, the fracking we know today was first used commercially on March 17, 1949, first in Oklahoma and later that same day in Texas. The 1980s ushered in a shale boom after a sudden technological advance vastly increased the natural gas production that continues to this day. However, for all that, fracking has become quite controversial in the past few years.  According to EnergyFromShale.org, here are the top ten things you should know about shale energy along with some resources from us on where you can find more detailed information.


This graphic (created by Dan Vergano and Karl Gelles for USA TODAY and posted 7/2/2012) does an excellent
job of showing the set up of a fracking site as well as some reasons why fracking is considered controversial.

1. Fracking is a huge part of our domestic natural gas and oil production.

In the future fracking will account for almost 70% of natural gas development in the US if it continues at its current rate. Without fracking, within five year 45% of natural gas production and 17% of oil production could be lost. Click HERE to see some of the percentages from April, 2015.

2. Fracking is a job machine.

In 2010, shale gas development supported 600,000 jobs, showing how revolutionary the economic impacts of developing shale gas resources are to the US economy. This number has only increased in the following years and is predicted to continue rising with continued production of natural gas and oil. Read in deatail the economic impacts of fracking HERE.

3. It's not a free-for-all.

For those thinking that the big companies in shall gas development are free to do whatever they want, regardless of the consequences, think again. Robust state and federal regulations for hydraulic fracturing already exist and every aspect of fracking is regulated by a comprehensive list of state, local, and federal laws.

4. The industry is always improving standards and practices.

As with many industries, the process for shale energy is always evolving to have higher standards and better practices all filed with the American National Standards Institute.

5. Ground water concerns.

 A lot of thought has been put into keeping the ground water safe with carefully constructed wells - multiple layers made of up steel casing and cementing. (More about the casing process used for wells HERE.)

6. The contents of fracturing fluids aren't a secret.

An outcry for companies using hydraulic fracturing to reveal what is in the fracturing fluids has gotten louder in the past few years, however, the contents aren't a secret and can be accessed on FracFocus.org

7. Yes, there is spill prevention.

A number of protective measures are in place to prevent spills - water is managed effectively and fluids are handled. Actually, a lot of forethought goes into setting up and starting a fracking site as you can see in the Marcellus Shale Coalition's (MSC) Recommended Practices: Site Planning, Development and Restoration.

8. Responsible waste management is a must.

Wastes from productions are managed responsibly - fracturing fluid is recovered and then reused in future fracturing operations. FracFocus.org has great information covering the various options for Fluid Handling HERE.

9. An earthquake watch isn't necessary.

Seismologists and geologists have not been able to prove that earthquakes are the direct result of the hydraulic fracturing process. A chart from EnergyFromShale.org shows that microseismic activity from fracking hits around a -2 to -3 on the Richter scale, which is not activity that is felt.

10. Air emissions are carefully watched.

Every aspect of fracking is carefully monitored and the air emissions are no different. They are closely monitored, managed and reported at fracking sites across the country. Natural gas is considered a low burning fuel because of the low emissions of carbon dioxide, sulfur oxide, and nitrogen oxide.


Hydraulic fracturing has been around for a long time and is ever evolving to be as safe and environmentally conscious as possible while still being the economic powerhouse that it is. What are your thoughts on fracking and its impact? Let us know in the comments below, or on Facebook (Philippi-Hagenbuch, Inc.) / Twitter (@PHILsystems)!


 

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Topics: Mining, Safety, Fracking

Drones to Design - How Technology Is Improving Mining

Posted by Josh Swank on Sep 1, 2015 3:02:01 PM

If it has not been born or grown, just about everything you know has had to of been mined out of our Earth at one point in time to be in existence. The first wheel made of stone was a result of early quarrying of aggregate, just as the steel used in your automobile originally came from iron ore.

PhilippiMarPR

Today, we rely on the mining industry to extract the ores needed to create the equipment used in the mining industry. Interesting how everything comes full circle.

What many people don't understand is how much technology has enhanced the way mining is done today, versus just ten years ago. An interesting article from the Sydney Morning Herald shows off how drones are being used in the mining industry to understand the volume within stockpiles and the amount of materials left to be mined within sections of individual mines. A great video can be seen here.

Technology has always played a large role at Philippi-Hagenbuch - from our first main-frame computer that was installed at our corporate headquarters in the early 1980's to the cutting edge 3-dimensional scanning and rapid prototyping we utilize today, the detail and sophistication to our designs has never been better.

Advances in CAD software now allow us to walk through our water tank designs, lift truck bodies with our patented body lifting system, calculate stresses through finite element analysis, model loads through our patented load profiling process, and simulate the dumping of loads through fluid analysis. Technology utilizatoin at PHIL is not about what is available, it's about what can be with an emphasis on quality and efficiency.

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Topics: HiVol(R) Bodies, Water Tanks, Technology

The Top 10 Business Risks Facing Mining & Metals

Posted by Abby Meister on Jul 21, 2015 1:31:00 PM


 

With an extended period of lower and volatile commodity prices globally, the mining and metals sector is currently going through a "super correction" to the super-cycle, resulting in unparalleled impacts on earnings, balance sheets, and investor perceptions for the sector. Understandably, mining and metals companies are more focused on their margin, cash flow, and capital returns than anything else right now. Though steps to recovery were set into motion in the past few years with mine closures and major capex reductions, it would be premature to say that the majority of mining and metals companies are free to take the risks that they would have during the “production at any cost” boom years. From the Ernst & Young paper, the “Business risks facing mining and metals 2015-2016”, we highlight the first five of the Top 10 Business Risks Facing Mining and Metals.


1. Switch to Growth

In the mining and metals sector, most companies are in a short-term mindset, focused on consolidation and capital returns in a low-growth environment. According to Ernst & Young the time to invest in future growth is now, though most companies are finding it hard to make that switch. Whether building or buying, preparation and execution are critical to prepare for the future upswing.

2. Productivity Improvement

Productivity improvement is always vital to survival for any industry and while there have been steps in the right direction, there’s still room for significant changes in the mining and metals industry. Innovation and productivity go hand in hand and to the early adopters, productivity has proven time and again to give a competitive edge. It’s important to keep in mind that productivity needs to remain a priority - even when commodity prices improve.20150821_-_Risks

3. Access to Capital

With the cyclical downturn, fundraising options for the mining and metals industry have been slim at best. Market conditions have brought about the rise of alternative sources of financing for the mid-tier and junior companies in the industry, but those sources generally bring with them their own set of complexity, costs and risks. At this point, Ernst & Young believe it is critical to maintain a long-term strategic focus of project fundraising (rather than concentrating on short-term funding), which can be achieved through preparation, knowledge, risk mitigation, and market awareness.

4. Resource Nationalism

The fight against corruption in the mining and metals industry is going strong and, along with the sentiment that companies are still not paying their “fair share” to host nations, has resulted in new transparency laws requiring companies to start reporting taxes and other government payments. Organizations should be taking advantage of these reports to truly show the value they are adding back into the host nations. 

5. Social License to Operate

To maintain SLTO there are a complex array of relationships that must be negotiated. Recently this risk has increased under the burden of tougher global economic conditions. With the huge investments put into operations at stake, continued engagement, collaboration, and communication with all of these stake holders is imperative.


 

If you would like to check out the remaining top five business risks (Price and Currency Volatility, Capital Projects Execution Risk, Access to Energy, Cybersecurity, and Innovation [new]) and the rest of the Ernst & Young paper that also goes into the top ten below-the-radar risks, you can find the link here.




 

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Topics: Industry News

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