One of the factors determining the success of a mining project is the selection of suitable equipment. Wrong decisions can result in downtime to critical processes resulting in huge losses of revenue. Hence, prudence is paramount in procuring pumps for different applications.
By Nick Barnes
Currently, mining companies are confronted with a situation where the high price of energy may offset envisaged bumper revenue from high mineral commodity prices. Thus, adopting cost containment measures to remain sustainable businesses is the most convenient tool at their disposal.
Change to the approach in equipment procurement is one of the ways mines may use to realise their cost-containment objectives. Sometimes, the obsession to adhere to this can have unintended consequences. This arises where the price is regarded as the sole factor that informs procurement decisions.
One engineer at a junior mining company related to this author about his experience recently. He approached the company’s accountant with a request for the purchase of a pump ideal for abrasive slurries. The price was higher than the previous pump model that was purchased for wastewater at a water treatment plant.
The accountant wondered why the company should pay more. “How much will it cost us? Aren’t there cheaper options?”The engineer desperately staked his case. “But the cheaper options are not ideal for the task.” As tight-fisted as the engineer had expected, the accountant responded, “Who will pay for that? I am afraid. We don’t have the luxury of spending that much.”
Cowing in, the engineer reluctantly accepted the cheaper option and settled for the equipment that in the words of the accountant that “can do the job for the moment”.
Three weeks later, the pump stalled while production was at its peak, and the engineer went back to the finance guy to ask for money to repair the pump.
The accountant wonders why they have to spend more on the new pump. “It may not have been maintained properly?”
“Remember that model of pumps is meant for wastewater treatment plants not and handling abrasive slurries and acid water drainage. That’s why I had recommended the other one previously.”
The finance was sardonic. “Hmmm. Is that so? I hope it will last an eternity?”
Eventually, he gave in nonetheless, only after being told that all pump downtime has halted
all processes and the mine was losing potential revenue by the minute.
In the end, the finance department spent more money on repairing a pump, more than the cost of a new high-quality relevant pump that had been dismissed. Then barely a month later, the pump failed. And this time, with no lease of life, it was pronounced a write-off. Belatedly, that was when the finance department recommended the purchase of a pump they had initially dismissed.
Ultimately, the ill-informed decision cost the mine more: the unnecessary cost of a pump that had been written off, besides more being incurred in repair, the irretrievable cost of revenue during occasions of downtime, and to add insult to injury, purchasing another pump.
Moral
The moral of the engineer’s account is the significance of getting a correct pump for an application from the get-g only after prudent pump selection. Clearly, pump failure as a result of poor procurement decisions has huge ramifications. A few minutes of scheduled downtime to conduct maintenance on a site may be permissible, if necessary, sometimes to fix one or two things. But when it happens frequently, it adds up to hours of downtime and cumulatively, considering that on each occasion thousands of dollars are lost in production, it could be hundreds of thousands or millions in a month. This can be a loss of revenue on the balance sheet.
Proper planning and execution
Currently, there is a lot of hype about the high cost of mineral commodities and the huge revenue mining companies stand to get. But the reality is that there are no easy pickings. There is a need for proper planning and execution to get the proverbial pot of gold that is huge, and using suitable equipment is central.
