A mining success story

26 September 2013

When Imperial Logistics took over the coal loading and transport service contract for mining group Exxaro’s Inyanda coal depot, it faced the challenge of transforming an operation that had previously been underutilised, and renovating a facility that was in a state of disrepair. Through a two stage solution, and by establishing a supply chain partnership with Exxaro, Imperial Logistics has transformed the inefficient depot, which now has the ability to optimally plan its operations; manage and control costs; realise efficiencies and measure productivity.

SA’s second-largest coal producer

Exxaro is a JSE listed, SA based mining group, with a diverse and world class commodity portfolio in coal, mineral sands, base metals and ferroalloys, as well as a growing exposure to iron ore. Exxaro is the second largest SA coal producer – with a capacity of 47 million tons per annum – and the third largest global producer of mineral sands.

The challenge

The Exxaro Inyanda coal depot, near Witbank, had been underutilised by the previous service provider, states Thinus Erasmus, CEO Imperial Logistics’ Bulk Commodity Services division. “As Exxaro’s new supply chain partner, our challenge was to improve service levels, boost production and enhance efficiencies, in order to drive Exxaro Inyanda’s competitiveness and ensure the operation’s sustainability.”

The problems

The water logged depot was in a state of almost total disrepair and was inadequate in all respects, with an unstable surface and dust contamination being just some of the concerns. Poor coal density resulted in insufficient payload capacity.The nature of the business required 7 to 10 trips per day and equipment maintenance was inadequate in the extreme,”Erasmus reports.

Outlining other problems, he says that truck tractor and trailer combinations exceeded legally permissible lengths. “Under and over loading of rail wagons was also a significant problem, as this activity relied on inaccurate visual estimates. Another issue was the depot’s poor environmental management. Environmental complaints were rife, and issues included coal spillages, dust, grazing and water contamination.”

The solution

The two stage solution implemented by Imperial Logistics encompassed immediate change in terms of equipment and facilities, and long term change of systems and management, resources and protocol.

Substantial planning was required since the interests of all partners – in terms of investment and returns – had to be protected during the transformation stages.

“The initial solution included stabilising the property by deploying graders and rollers, and covering the surface with a run of dump stone,”Erasmus explains. The suppression of dust and water reticulation on site was thus greatly improved. Dust suppression is now constantly managed in the proximity of the operation through a chemical and water process.”

The entire fleet of transport equipment was replaced. Load cells were installed on all front end loaders, resulting in actual measured weight loads.Legal specifications were met, resulting in a substantial increase in payload,”he adds.

Imperial Logistics’ solution has added value to the business and its operations; improved income streams and reduced the cost of sale. As a result of the transformed depot and systems, Imperial Logistics, as a supply chain partner, is in a position to meet the quantified needs of Exxaro.

The result – a total transformation

The entire operation has been transformed, and is now more flexible and able to deal with peaks and valleys in volumes. “It has the ability to optimally plan its operations; manage and control costs; realise efficiencies and measure productivity,” states Erasmus. The success of the supply chain partnership has been instrumental in driving continuous operational and commercial improvement initiatives.

Operational efficiencies and commercial benefits

Hans Prinsloo, commercial manager at Exxaro, says that not only has the operation’s association with Imperial Logistics yielded operational efficiencies, but commercial benefits, too. “Since appointing Imperial Logistics to take over this contract to manage our coal transport and loading operations at Inyanda, we are consistently achieving budgeted monthly coal volumes. The ‘take or pay’ penalties that we used to incur through agreements with service providers downstream – when we failed to deliver certain coal volumes on time – are now a thing of the past,” Prinsloo enthuses.

Prinsloo reveals that before Imperial Logistics, trains supplied by Transnet were sometimes cancelled because coal didn’t reach the siding in time for loading, or loading equipment was not operational. “This, too, is a thing of the past, thanks to Imperial Logistics. In fact, as a result of our loading efficiencies, we are now sometimes provided with extra trains by Transnet, which enables us to boost our volumes and generates additional income for both Exxaro and Imperial Logistics.

“We are very proud to be associated with Imperial Logistics, and look forward to a long relationship,”Prinsloo concludes.

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