Presentation examines the ongoing costs associated with belt and horizontal motion conveyors.

2. The purchase of capital equipment is a significant
decision and often requires the involvement of many
internal professionals including engineering,
purchasing, maintenance, finance, and Quality Control.

3. Hitting
The
Target
•Equipment that Delivers

4. Many times the purchase price is just the tip of
the iceberg. Therefore it is important to consider
all of the cost elements.

5. Developing an Understanding of “TOTAL
COST OF OWNERSHIP” and how that impacts
“RETURN ON INVESTMENT” for industrial
minerals processors.

6. METRIC #1
RETURN
ON
INVESTMENT
(ROI)
A performance measure used
to evaluate the savings and/or
revenue increase credited to
the equipment after initial and
ongoing costs are considered.

7. Simple ROI = Amount of Financial Gain
Total Investment Amount

8. METRIC #2
TOTAL COST
OF
OWNERSHIP
(TCO)
A performance measure
meant to uncover all the
lifetime costs associated with
the equipment both before
and after it is purchased.

9. Currently, there is no broadly accepted formula
for computing TCO. The main objective is to
make sure all relevant costs are considered when
evaluating equipment ROI.

10. CAPEX + OPEX = TCO
Capital Operational Total Cost of
Expenditures Expenditures Ownership
Purchase price and installation costs
often times account for a very small
percentage of the Total Cost of
Ownership.

11. 10%
90%
Capital
Expenditures
Operational
Expenditures

12. TCO COMPONENTS
Equipment Costs Installation Costs
Engineering Costs
Shipping Cleaning/Spillage/Waste
Environmental Costs/Impact
Energy Costs
Training
Operating Labor
Maintenance Spare Parts
Controls Disposal Costs
Unscheduled Maintenance/Downtime

13. METRIC #3
OVERALL
EQUIPMENT
EFFECTIVENESS
(OEE)
A performance measure that
determines actual production
performance against expected
production performance.

14. OEE = Availability X Performance X Quality
Availability – Takes into account downtime loss which can be defined
as any event that halts planned production.
Performance – Takes into account Speed loss which can be defined
as any event that causes a process to produce less than its expected
rate.
Quality – Takes into account production loss which can be defined as
equipment performance that contributes to material not meeting
Q & A standards.

15. Why is OEE important to TCO and ROI
Calculating OEE can help identify “downtime
loss” and “material waste” which can be a major
contributor to total cost of ownership and have
a major impact on return on investment.

16. Material handling equipment (conveyors) play an
important role in the mining, processing,
transporting, and storage of bulk materials.
While it is usually difficult to identify and quantify the
benefits associated with material handling
equipment, it is much easier to identify and quantify
the costs.

17. Conveyor downtime
can have a major
impact on plant
production which leads
to lower revenues and
profitability.
Cost/Benefit analysis
of belt conveyors
compared to
horizontal differential
motion conveyors.

18. Belt Conveyors have always been an essential
component of the mining and processing of
industrial minerals.

19. Horizontal Differential Motion Conveyors are
beginning to find there place in the world of
mining and industrial minerals processing.

20. ROI Analysis – Total cost vs. benefit analysis
Projected Costs
Direct – One Time Cost Direct – Ongoing Cost Indirect – Ongoing Cost
1) Engineering
2) Procurement
3) Equipment
4) Installation
5) Shipping
6) Controls
7) Existing Equip.
Removal
8) Start-Up Assistance
1) Maintenance
2) Operating Labor
3) Spare Parts
4) Utility Costs
5) Engineering
1) Unscheduled
downtime
2) Material Spillage
(Waste)
3) Contamination
4) off-spec material
5) Equipment Cleaning
6) Clean-up

21. Projected Benefits
ROI Analysis – Total cost vs. benefit analysis
Direct/Indirect Benefits
1) Revenue Increase
- Higher Capacity
- Better Product Quality
2) Labor Savings
- Reduced Attention
- Reduced Staff
3) Reduced Spare Parts
4) Reduced Maintenance
5) Reduced Engineering
-Redesign
6) Reduced Material Waste
7) Reduced Unscheduled Downtime
8) Reduced Clean-up
9) Improved Employee Satisfaction

22. 100 foot conveyor – year 1 cost/installation
Application – 60 TPH Lime
Belt & Roller
Conveyor
Triple/S Slipstick
Conveyor
Equipment Cost $60,000.00 $125,000.00
Installation Cost $25,000.00 $45,000.00
Drive System Drive System
Motor Motor
Belt N/A
Idlers N/A
Total Initial Cost $85,000.00 $170,000.00
10-year Lifecycle Cost Comparison

23. Lifecycle Costs Failure Ratio-Annually Failure Ratio-Variable
Lost Bearings/Supports 5 per/yr. 5th & 10th year-typical
Cost of Bearings/supports $150 X 5
($750.00)
$800 X 2
($1,600.00)
Cost for Labor $35 hr. X 2 hrs. X 5
($350.00)
$35 hr. X 2 hrs. X 2
($140.00)
Downtime Hours 10 hours 4 hours
Cost of Downtime per hour (60 tons X $200/ton) $15,000.00 (60 tons X $200/ton)
$15,000.00
Annual Cost $151,100.00 N/A
Year 1 Capital + Operating Costs $85,000 + $151,100 = $236,100.00 $170,000.00
Year 1 Savings $66,100.00
Year 10 Operating Costs $1,511,000.00 $61,740.00
Year 10 Savings $1,359,900.00
10-year Lifecycle Cost Comparison

24. Rate of Return on
Replacing Belt
Conveyor with
Slipstick
Horizontal Motion
Conveyor
$175,000 (equipment cost)/
$151,100 (annual maint.)
= 1.16 X 12 = 13.9 months (ROI)

25. When purchasing equipment, many processors
tend to focus on achieving a competitive
purchase price and will often overlook
opportunities to increase their bottom line.
0
50
100
150
200
250
Vendor 1 Vendor 2
125
60
45
25
6 150
3.5
1.1
Purchase price Installation Unscheduled Downtime Spare Parts

26. The
Slipstick
Conveyor