1. 3/4/13 Mining Magazine - Longwall selection: the 10 steps
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Longwall selection: the 10 steps
Publishing Date 28 Nov 2012 5:43pm GMT Author
Summary
Selecting a longwall suitable for a US$2 billion mine extension is not a decision to be taken lightly. Rio Tinto’s Alex
Jones outlines his 10 steps to success
Rio Tinto’s Kestrel mine, 40km northeast of Emerald in central Queensland, is an underground operation supplying
world markets with up to 4.2Mt/y of coking and thermal coal, and it is getting bigger. The US$2 billion Kestrel mine
extension project, due for completion in 2013, will extend the life of the mine by 20 years and increase mine capacity
to up to 5.7Mt/y.
In 2010, Rio Tinto executed a contract for a turn-key longwall system for the Kestrel mine extension project. It went
through a rigorous process choosing the longwall. Uppermost in the minds of the team was achieving a step change
in safety, ergonomics and sustainable development.
The process of choosing the turn-key solution was divided into two areas and 10 steps. The first area was the pre-
tender issue to market, which included: understanding the study; research; scope and tender development; customer
and peer reviews; and senior management review.
The second area was after tenders were received. This included evaluation and clarification; identifying key points;
defining the ‘vital few’; the negotiation process in line with the key points and the ‘vital few’; and understanding the
associated risks.
The following is an overview of each of the steps that Rio Tinto underwent in the process of choosing Kestrel’s
longwall and includes key considerations/recommendations for mines that are looking to source a new longwall of
their own.
1. Understand the study
It is critically important to gain a solid understanding of the solution that is supposed to be delivered. There has to be
a clear understanding of what has been approved as part of the mine plan and under what assumptions. What is it
that the customers (the mine and equipment operators) have actually asked for and is that what has been approved?
If not, there are going to be some stakeholder management challenges before the project even starts.
Has the study covered the important points required to allow you to commence the compilation of the scope and
tender documentation? Do you understand the strata and ventilation requirements? Are all of the interfaces and
battery limits defined? If not, you will probably have to go back to the study phase during execution, probably without a
budget for it.
After review of the study, the project manager must understand the required outcomes, understand the physicals and
the constraints and, most importantly, they must know what they don’t know and have a plan to fill the gaps. Only then
can you move to step two, research.
2. Research
Yes, the study has been completed – you have read and understood it in step one – so now it is time to get out there
and do some research. What is available in the market place that will deliver the business case that the study
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2. 3/4/13 Mining Magazine - Longwall selection: the 10 steps
promised?
Now is not the time for more options, but for opportunities to deliver outcomes in line with the study; the opportunity for
improved safety, ergonomics, reliability and sustainable development. It is important to consider what other mines are
doing, what works well and, just as importantly, what does not work well.
At Kestrel, safety implications on longwalls were researched in detail and on several levels, including all Kestrel mine
longwall historical incidents; equipment-maker industry alerts; departmental directives; coroners’ enquiries; and
significant international incidents.
The focus of this research was to challenge the hierarchy of controls to eliminate the hazard or ensure a hard barrier
over a procedural solution. Where we did not have the technical expertise to specify the corrective action, the
successful OEM was required to provide a solution.
Early in the process, Kestrel engaged the services of a physiotherapist familiar with the longwall environment to gain
an understanding of what could realistically be done to improve the ergonomic layout of the typical longwall.
This early focus and mind-set has reaped rewards throughout the latter stages of the project. Ergonomics is not an
afterthought and by just moving some ‘bits and bobs’ around, the equipment is designed with the operator and the
maintainer at the forefront of the process.
A detailed review was also undertaken to analyse and categorise all historical equipment-downtime events at Kestrel
mine. A very similar approach was taken to safety; that is, where we did not have the technical expertise to specify
corrective action, we required the successful OEM to provide a solution to eliminate or minimise the known reliability
issue.
Longwalls traditionally use very large amounts of water for cooling underground electric motors. The standard
measurement is a set number of litres per minute per hundred kilowatts of motor power – approval testing has
historically been in line with these figures. Our research and discussion with the manufacturers initially did not bring
us any closer to the origin of the approved water quantities. Whether running at 100% load or 10% load, hundreds of
litres of water per minute would be pumped onto the floor – not only environmentally wasteful but also potentially
creating hazards.
Further research did deliver the origin of the water flow rates. This was challenged and tested, flow rates adjusted for
multiple load settings, and as a result, we expect only a fraction of the amount of water previously calculated to be
pumped onto the floor. This outcome is much more environmentally friendly and will lead to a potential reduction of
hazards.
Why reinvent the wheel? Most underground mines are happy to share safety improvements and opportunities,
identified hazards, and what works well and what doesn’t. Not all ideas are transferable (they may be specific to seam
height, floor or roof structure), but usually a good indication can be gained.
At Kestrel, a number of workshops were held with a cross-section of the workforce to gain their understanding of the
requirements of a new longwall. The day, the teams that operate and maintain the longwall on a daily basis, along
with the teams that co-ordinate and supervise the overhauls, know the gear best.
Survey your OEMs; how many of their project managers or their design teams have worked on a longwall
underground for any significant period of time? It is unfair that we assume that the OEMs need to have the answers or
even fully understand the issues.
The workshop participants were given a blank canvas with the following scenario: “Starting from scratch, forget the
budget, what would you change and why?” After you cull the items such as “we must have a cappuccino machine on
the main-gate”, the real value of this exercise becomes immediately evident, a real divergent and convergent thinking
exercise.
These are value-adding options and ideas from the people that know mining equipment best: the people that call it
their office and are putting up with the issues that they already have answers for, almost every day.
3. Scope, tender development
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3. 3/4/13 Mining Magazine - Longwall selection: the 10 steps
Once the study is understood and your research has opened up a new world of opportunities, you are ready to begin
step three: scope and tender development.
The key point here is to ensure you effectively communicate to the market what you want, and why you want it. Be clear
on the outcomes. We are a mining company, not an equipment design and manufacturing company. We don’t
specialise in telling them what to build, but what the machine needs to do safely and what it needs to achieve.
There may be areas where we are very specific due to our research in step two; however, in general, Kestrel’s scope
and tender documentation was developed to communicate the required outcome.
Also, this step is where you stop, go back to the feasibility study and ask yourself: “Does this scope and tender
documentation reflect the approved feasibility study scope? Is it delivering the outcomes and is it aligned with the
assumptions as detailed in the approved feasibility study?” If it doesn’t, you have two choices. Either change it back to
what you were approved to do, or seek a scope variation. Better to do this now than after you have gone to market.
4. Customer and peer reviews
Once you have the scope and tender documentation written, it is time to go back to your customers again. Did you
really understand what they were asking for? Have you captured it effectively? Have you communicated it correctly? Are
you so close to the process that you cannot see the forest for the trees?
Ask your customers to review the outcomes, battery points and interfaces. Ask your customers to identify any scope
gaps or overlaps that may not be clear to you or that you have assumed.
In Kestrel mine’s case, we had well-known, reputable mining consultants assisting throughout much of the early
stages of the process. During the scope, tender development and the peer review especially, their assistance and
knowledge in this area was invaluable.
5. Senior management review
You have the tender documentation to a point where you are happy to go to market. Key team members from your
customers have reviewed the documents, and peer reviews have been undertaken. One final check has been done
against the feasibility study requirements and the assumptions behind it; the one step left before going to market is
the senior management review.
This is where you provide the senior management with an opportunity to review, request modifications and changes,
confirm required outcomes and verify that assumptions have not changed. Do not rush this very important step;
provide adequate time for the review to be effective and add value. This is not just a ‘tick in the box’.
Once this is complete, send the tender out to market; now the hard part begins.
6. Evaluation, clarification
Initial evaluation begins on the days that the tender boxes are opened. The initial focus is strongly on the technical
proposals. If the OEM cannot provide the technical solution required by the mining conditions or strata, delivering the
required outcomes of the feasibility study in line with the assumptions, it does not matter what the commercial terms
or cost are – the proposal is not going to progress.
In Kestrel mine’s case, we ranked all of the responses. The logic was, if we have gone to the trouble of reviewing the
feasibility, conducting research, consulting our customers and having workshops followed by peer review and
approval, then the OEM has provided a response, surely the least we can do as a project team is to compare the
OEM’s responses and rank them accordingly.
Clarifications were submitted to suppliers as required to ensure that the responses were understood by the
evaluation teams.
To avoid ‘group think’, we ran a completely separate evaluation process on the same submissions – this was a
value-adding exercise undertaken by mining consultants.
7. Identify key points
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4. 3/4/13 Mining Magazine - Longwall selection: the 10 steps
Once the initial clarifications and high-level evaluation were complete, we ran a number of workshops with a selection
of our customers. This 12-person team was a cross-section of customers, including the longwall manager,
maintenance personnel and operators from the longwall face.
Over a number of weeks we ran workshops on all of the longwall sub-systems with the intent of identifying key points
of importance to our customers. These included items that were important to them with the OEM submissions, both
positive and negative. Going into the negotiations, this gave the negotiation team a great insight on areas of focus that
were important to the customer.
This effectively gave us a list of items that had to be negotiated to improve the OEM’s tender offer, and a list of items
that we knew we could not trade off, as they were important to our customer. We were aligned as a team and our
priorities had been set by the customer; a clear, agreed direction ratified by the end user.
8. Define the ‘vital few’
The ‘vital few’ were items that our customer felt so strongly about with the OEM’s submission that if the negotiation
team were unable to negotiate a better outcome for the mine, then that OEM would not be progressed in the process.
These items were typically related to a safety concern or part of the OEM’s proposal not meeting one of the key
assumptions or required outcomes.
These items were not taken lightly; they were well understood and agreed by all concerned.
9. Negotiation
The negotiation process needs to be well planned. Team members need to know their roles and understand their
specific areas intimately. For the technical negotiations for the Kestrel mine longwall, we had content experts from
Kestrel involved at the negotiation table. This provided opportunities for the Kestrel mine team to communicate
effectively the importance of the key points and the ‘vital few’ directly to the OEMs. They made no apologies for being
passionate and determined, as the process they had been involved with to date provided them with the context and
understanding from their peers of why the item was critical.
10. Understand the risks
As with any negotiation, you begin at your point of aspiration and should you meet one of the ‘vital few’ objections, you
walk away. Many of the items end up somewhere in between. This is why the final step is so important; understand
the risks.
Steps one to five, are all about getting the scope right, conferring with your customer, peer reviews and approval to go
to market. You may well have negotiated to a point where the current package looks very different from the package
you were approved to go to market with.
The purpose of this step is to assess – before contract execution – the level of risk for every clause changed in the
scope of works and technical specifications. The customer attends a formal risk assessment to rank the level of risk
incurred for every change that has been negotiated from the approved package that went to market.
From there, if it is an acceptable level of risk, we execute a contract.
So now, many months have passed, we have an agreed executed contract, and we have followed the process of
choosing the longwall turn-key solution in the two areas and 10 steps: now the real work begins.
Alex Jones is principal advisor – mining equipment, energy major projects, technology and innovation for Rio Tinto.
This article was first pub lished in Australian Longwall Magazine, June 2012
© Aspermont UK (Mining Communications Ltd) Albert House, 1 Singer Street, London, EC2A 4BQ
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