Uncovering Hidden Potential

Mining businesses need to maximise equipment utilisation, boost their output, and decrease costs – all while advancing their decarbonisation efforts.

Offering improved productivity and reduced operational costs, premium fuels and lubricants are solutions that operators cannot afford to overlook as they work to meet shifting global demand and disruption to supply chains.

Global disruption shapes mining output

With the mining industry facing extreme global disruption, operational efficiency has become even more vital than ever. Current geopolitical events mean that some nations are swiftly switching to alternative sources for commodities.1 And, where this has not been possible, it is causing a slowdown in production across many industries and sectors.

While rising energy costs have been front and centre in the minds of most people, the disruption has also led to sharp price increases in several metals – such as gold, nickel, and palladium – due to fears of shortages.1 In fact, nickel prices more than doubled in the two weeks following the beginning of the war in Ukraine.2

In the short term, these price rises will likely drive growth in the mining industry. However, businesses will still need to address the challenges facing them as they look to meet the shifting demands of countries trying to maintain the fluidity of their supply chains.

Nadia Haseeb, Shell, explains how combining premium fuel and lubrication could be an efficient solution for an evolving sector.

This makes it essential to enhance productivity across every area of operations by reducing equipment downtime and increasing system efficiency as much as possible.

What is driving industry change?

Maximising equipment utilisation in the demanding mining environment is a difficult job at the best of times, but with the impact of COVID-19 and geopolitical pressures resulting in further cost pressures and tighter margins, there is now a much greater need for mining site managers to unlock efficiencies wherever possible.

That is in addition to some important emerging trends that are shaping approaches to operations across the sector, including: n Alternative fuels: As mining looks to transition towards a net-zero future, alternative fuels are a means of maintaining operational efficiency while meeting sustainability targets. However, they will place different demands on equipment and require effective management to reach their potential. n Changing equipment designs: To meet output needs, mining equipment is becoming bigger, which means unplanned downtime can have an increasingly detrimental impact. New original equipment manufacturer (OEM) designs also mean higher loads, increased temperatures and smaller oil sumps, raising the pressure even further on maintenance programmes to keep machines running smoothly. n Tightening regulation: Equipment emissions standards increased with the advent of Tier 4 diesel engine requirements, and more recently, industry-wide targets have emerged. For example, the International Council on Mining and Metals has committed its members to net-zero Scope 1 and Scope 2 greenhouse gas emissions by 2050.

Businesses will need to adapt quickly to these trends to avoid the potential for disruption and, instead, unlock new opportunities for growth. Shell and DLG: A case study in product testing

Driving efficiency with premium consumables

Improving efficiency and profitability while adapting to changing trends and global disruption might seem like a near impossible task, but it can be achieved by going back to basics and focusing on the variables that are in one’s control, such as consumables.

It is vital that businesses do not lose sight of some of the most significant inputs (such as fuel and lubrication) when it comes to protecting operational fundamentals. Ultimately, it is these fundamentals – equipment health, uptime, and efficiency – that will dictate the strength of the bottom line for years to come.

After all, the fuels and lubricants selected can have a big impact on equipment and, in turn, business performance, with studies showing better fuel economy and improved fuel system technology can deliver up to a 5.5% reduction in fuel consumption.3

The right combination of fuels and lubricants has the power to drive efficiency across equipment operations and help reduce running costs. This has been demonstrated by professional experts putting consumables to the test under real-world conditions, making sure they can meet evolving industry requirements.

For example, Shell collaborated with Deutsche Landwirtschafts-Gesellschaft (DLG) to measure the total cost of ownership (TCO) savings and efficiency gains that can be achieved when using premium fuel and lubricants together.

Figure 1. Mining haul truck at work. Situated in Gross-Umstadt, Germany, DLG has a rich history of promoting the technical and scientific progress of off-highway equipment. Engaging a facility at the standard of DLG allows precise testing and close monitoring of test conditions.

Over the course of more than four months, and across nearly 600 hrs, the DLG team tested Shell FuelSave Diesel (known as Shell Diesel Extra in some countries) in combined use with Premium Shell Rimula Lubricants, against regular diesel and standard lubricants. The premium consumables were first put through DLG’s PowerMix test procedure using test frames and parameters designed by an independent expert commission, a format regularly used by leading global manufacturers to assess the quality of their machines.

Next, the two companies designed a new power take off (PTO) testing programme, combinining a series of assessments to verify the quality of premium fuels compared to standard ones. The result was a real-world measurement of how the tested fuels can impact the overall performance of an engine. While there is a growing awareness across the mining sector of the benefits that either a premium fuel or a premium lubricant can have on equipment performance, the DLG test demonstrates the additional efficiencies that can be unlocked by combining the two. The testing showed that, when used together, Shell’s premium diesel and premium lubricants can deliver up to 472 more operating hours as a combined efficiency benefit,4 a figure that could have significant cost-saving potential for the 24/7 schedules that are not uncommon for mining projects.

The results also highlight the increased productivity that these fuels can offer, with DLG measuring up to 2.7% better fuel economy5 and 5.6% more load-pulling power when compared with regular diesel.6

Why fuel is an investment, not a cost

Turning back to fuel, this idea of an interlinked value chain is in full view, since fuel represents an important share of operating costs for mining businesses, with the average large mine hauling truck using 900 000 l/yr of diesel.7 Therefore, any improvement in fuel economy can have a significant impact on the bottom line, releasing savings that can be redirected to other parts of the business or used to protect financial health during periods of extended uncertainty.

A key factor in this is the ability to maintain engine efficiency while operating with heavy loads or on uneven terrain, especially with equipment that is consistently running at high capacity. And much of this comes down to the health of the injection system, particularly injector cleanliness. Shell and DLG’s test, for instance, showed that Shell FuelSave Diesel was able to achieve clean-up of up to 100% of performance-robbing deposits (linked to power) in less than three working days, which can significantly reduce downtime and maintenance costs.6

As more solutions become available to operators, being able to rely on products with performance proven under real-life conditions by independent test experts (such as DLG) will be key to ramping up operations. After all, the efficiency gains that once offered a competitive edge may now be essential for survival as mining businesses shake off the lasting effects of the COVID-19 pandemic.

The pressure is on to find a solution to sustainable growth

Another important element for a business is the ability to not only drive efficiency and growth, but also to do it sustainably. This is especially important given that mining currently accounts for 4% of total global energy consumption8 and is responsible for up to 7% of greenhouse gas emissions worldwide.9

Moreover, these factors are not just useful for contributing to the sector’s decarbonisation but can also help bring external stakeholders along on the journey too – something that holds its own significant value considering how important an operation’s license to operate (LTO) can be to the wider business.

And this has npt gone unnoticed by mining executives either, with six out of 10 citing their LTO as the biggest risk facing their business.10 Why? Because ultimately, they know that strengthening their LTO transcends societal and environmental factors, becoming critical for renewing existing business and winning new contracts as well.

In this context, any potential improvements around fuel efficiency or fuel consumption could be a massive driver of responsible growth. Even before thinking about the transition to alternative fuels, significant differences can be made by using the right combination of premium fuels and lubricants. The more efficient operations are and the less fuel is consumed, the fewer emissions are generated – helping companies take an important step towards the decarbonisation of their business, while demonstrating to new and existing customers that they can deliver in this area.

How to connect people, purpose, and performance

Given the disruption facing global supply chains, operational efficiency is more important than ever. Which is why operators are looking across the board for opportunities to claw back marginal gains, be it through their consumables, digital technologies, or stronger collaboration.

Closing this gap will take time and investment, but once businesses are equipped with the right solutions and staff are given the correct skillsets, the potential benefits are clear. The important thing to remember, however, is that – just as the DLG testing shows – it is not always enough to have the right product, service or equipment on its own.

Rather, to deliver consistent performance when it is needed most, mining operators must connect the various dots from around their business, whether that is through: combining digital technology with staff upskilling; understanding that an LTO is a societal and business imperative; or unlocking efficiency potential by using premium fuel and lubricant in tandem.

References

1. ‘Russian invasion of Ukraine: Potential impact on supply chains of mineral commodities,’ GlobalData, (2022), www.mining-technology. com/comment/supply-mineral-commodities 2. ‘Supply of Critical Minerals Amid the Russia-Ukraine War and Possible

Sanctions’, Center on Global Energy Policy, (2022), www.energypolicy. columbia.edu/research/commentary/supply-critical-minerals-amidrussia-ukraine-war-and-possible-sanctions 3. YUKSEL, A., ‘Digging Deeper: Increasing Mining Equipment’s Efficiency’,

Cummins, (2021), www.cummins.com/news/2021/03/03/increasingmining-equipments-efficiency 4. For the same amount of fuel compared to regular diesel without fuel economy formula and to standard lubricant. Baseline of 100 000 l/hr and 50 l/hr fuel consumption per equipment. Based on demonstration tests with off-highway heavy-duty Tier 4 engines in collaboration with DLG Germany. 5. Shell FuelSave Diesel is designed to help provide by up to 3% fuel economy, compared to regular diesel without fuel economy formula.

Actual savings may vary according to vehicle, driving conditions, and driving style. Internal Shell tests and with customers have shown a range of fuel savings depending on age of vehicle and type of operations. 6. Compared to regular diesel without fuel economy formula. Based on demonstration tests with off-highway heavy-duty Tier 4 engines in collaboration with DLG Germany. Achieved within 50 hrs of engine operations and four tankfuls. 7. MURALIDHARAN, R., KIRK, T., and BLANK, T. K., ‘Pulling the weight of heavy truck decarbonization: Exploring pathways to decarbonize bulk material hauling in mining’, Rocky Mountain Institute, (2019), www.rmi. org/insight/pulling-the-weight-of-heavy-truck-decarbonization 8. ‘Largest end-uses of energy by sector in selected IEA countries’,

International Energy Association, (2021), www.iea.org/data-andstatistics/charts/largest-end-uses-of-energy-by-sector-in-selected-ieacountries-2018 9. DELEVINGNE, L., GLAZENER, W., GRÉGOIR, L., and HENDERSON, K.,

‘Climate risk and decarbonization: What every mining CEO needs to know’, McKinsey & Company, (2020), www.mckinsey.com/ business-functions/sustainability/our-insights/climate-risk-anddecarbonization-what-every-mining-ceo-needs-to-know 10. ‘Top 10 business risks and opportunities for mining and metals in 2022’, EY, (2021), www.assets.ey.com/content/dam/ey-sites/ ey-com/en_gl/topics/mining-metals/ey-final-business-risks-andopportunities-in-2022.pdf