Modern Quarrying October-November 2015

PERFORMANCE MEASUREMENT

African surface

Case studies The KPAs discussed in this paper have been selected by comparing KPAs of sev- eral mining houses engaged in surface mining operations in Southern Africa, and then identifying those that are common to most of them. PalaboraMining Company is committed to the following strategic imperatives: • Providing a safe and healthy work environment for all employees and contractor employees. • Practising sound environmental man- agement to ensure the sustainable biodiversity of the natural environ- ment within which it operates. • Acknowledging and respecting stake- holder interests and concerns; and striving to be a leading corporate citi- zen within the mining industry. • Supplying a high standard of quality products and services – reliably and responsibly. Case Study 2 – Kumba Iron Ore: Kumba Iron Ore has what it refers to as ‘four strategic pillars’, which are: delivering on growth projects; capturing value across the value chain; optimising value of the current operations; and organisational responsibility and capability. The company performance is measured against the following seven measures, or KPIs (KPAs): • safety and health; • our people; Case Study 1 Palabora Mining Company:

The operational KPIs are: zero harm; pro- duce according to plan; mine waste effec- tively; containing our costs; and securing our logistics. Case Study 3 – Anglo American Corporation: Anglo American has the following key performance areas, which it refers to as ‘Pillars of Value’: These are safety and health; environment; socio-political; and people. Identification of KPAs The case studies reveal that the five key performance areas are safety and health, costs, product quality, fleet management and delivery. These may form a default list that covers the key areas that any organ- isation should consider when choosing KPAs. Safety and health There is a strong cultural drive in Southern Africa to adopt a system of ‘zero harm’. This goal reflects an eventual target that the industry has set and taken a stepwise approach to achieving. This is reflected in the current targets which, despite the implied target of ‘zero’, are in fact not zero. The most common measures of safety in the southern African surface mining environment are the lost-time frequency rate (LTFR) and the fatality frequency rate (FFR). Matters of health that have been iden- tified in the Mining Charter include mea- surement of new cases of noise-induced hearing loss (NIHL) and lung diseases. Fleet management: With load and haul contributing to approximately 46% of total mining costs on some operations (Accenture, 2009), fleet management has been identified

as a KPA in the southern African surface mining environment. The costs can be categorised into firstly, equipment costs, made up of fuel, tyres and tracks, ground engaging tools, repairs, and maintenance; and secondly, into operating labour costs. Fittingly, research into this KPA has shown it to contain the largest number of KPIs in the surface mining environment (Appendix A) . The KPIs to be measured may be maintenance-related, where it is important to minimise downtime (planned and unplanned) and increase availability. It is also important to mea- sure equipment efficiency in terms of the entire cycle of spotting, loading, travelling (loaded and empty), and dumping time for haulage equipment, and cycle time of digging, swinging (loaded and empty), and dumping for excavating equipment. Relocation time, which is the average time spent per relocation of an item of equipment (eg the time it takes to move a dragline from one cutting position to the next), is often included. KPIs that should also be in place are to measure how effectively the equipment is used (utilisation) and how efficiently it is used (matching equipment size and numbers – measured by the number of dumps to fill and machine waiting time) to ensure equipment optimisation. Logistics would not be complete without haul road man- agement, and this may be another focus of a KPI within the fleet management per- formance area. Product quality: In today’s increasingly competitive mar- ket it is important to ensure that the quality of the product meets the require- ments of the client. This is particularly the case for a large number of South Africa’s surface mining producers who, due to the unique characteristics of the mineral

• corporate governance; • footprint management; • corporate social investment; • innovation research; and • production and sales.

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MODERN QUARRYING

October - November 2015