Saturday, December 18, 2010
Published: December 14 2010 19:29 | Last updated: December 14 2010 19:29
Global spending on mining will surpass pre-crisis levels next year, according to an emerging industry consensus, highlighting rising confidence in an economic recovery led by China and other fast-growing markets.
The boom in capital expenditures, which extends to the oil, natural gas and agribusinesses, comes amid sharply rising prices for commodities such as copper, iron ore, crude oil, sugar and wheat.
The investment surge also raises the likelihood of short-term bottlenecks in the already stretched supply of equipment and services, and project delays as costs rise.
Global mining expenditure is set to hit a record $115bn-$120bn next year, above the peak of $110bn set in 2008, according to a survey of senior industry executives and consultants.
The rise is being driven by miners such as Vale of Brazil, Rio Tinto and Xstrata, who want to take advantage of generational boom in demand and pricing for raw materials.
In Australia, the hottest mining region, the government’s resources forecasting agency predicts expenditure to jump by 58 per cent year-on-year.
Separately, in energy, consultant Wood Mackenzie estimates the world’s largest oil and gas companies will spend nearly $100bn on development projects next year, up 12 per cent from 2010.
Chevron, the US second biggest oil company, announced last week its biggest ever capital expenditure, budgeting $26bn for next year, up 20 per cent from 2010.
Tom Albanese, chief executive of Rio Tinto, said the mining industry is moving into what he describes as a “growth response” to booming demand and higher prices. “There is a greater sense of optimism in the sector”
“We are entering the earlier stages of another multiyear expansion of the industry,” said Mike Sutherlin, chief executive of Joy Global, one of the largest manufacturers of mining equipment, such as excavators.
Agribusiness companies are also boosting investment, executives said. John Deere, the world’s largest manufacturer of tractors, announced this month new spending for 2011 to underwrite a record number of new models.
As natural resources companies lift investment, senior executives fear that wages and cost inflation and longer lead times will limit the supply response to booming demand and drive commodities prices higher.
“It is not yet of 2007-08 proportions, but cost inflation and lead times are again rearing their head,” said Colin Hamilton, commodities analyst at Macquarie. Runaway cost inflation and labour and equipment shortages ravaged the commodities industry in 2007-08, pushing up raw materials prices as companies missed deadlines for new projects. The problem gained notoriety when miners were forced to cut back operations after running out of tyres for their gigantic trucks.
The surge in investment after a hiatus in 2009 and 2010 in the wake of the financial crisis will trigger a bonanza for the sector’s services companies. But it could eat into producers’ profits.
As a result, executives said the cost of developing and running oilfields, mines and farms had regained its upward momentum and forecast further rises in 2011-2015. Cost inflation measures are sketchy, but consultants IHS-Cera said energy upstream costs rose last quarter for the first time since mid 2008.
Executives said the biggest cost pressures were hitting Australia, the Brazil-Chile-Peru region, the coal market in China and areas of Canada and Africa.
“The fact that overall upstream costs are trending upwards points to the increase in oil and gas activities worldwide,” said Daniel Yergin, chairman of IHS-Cera.
Alex Krueger, managing director at First Reserve Corp, the $20bn natural resources private equity investor, said increased activity in commodities was “expected to result in longer lead times for key items such as tyres and escalating costs of explosives and wages.”
Thus, natural resources executives said they were paying extra attention to procurement. John Beevers, chief executive of Orica Mining Services, one of the top suppliers of explosives to the mining industry, said that “security of supply” was replacing price as a top concern for his customers.
Additional reporting by Sylvia Pfeifer in London
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Friday, April 23, 2010
HSM TIRE Co. is proud to announce that it has teamed up with KTB Products to market and distribute its full line of products including the their KTB Rust Eliminator and Lube product. This product has been successfully used in the market place for the past 40 years and is the only product of its kind that is approved for use by the EPA’s “Design for the Environment” program.
In its simplest form the product is a non-fibrous liquid that is added to the air chamber and acts as a “Rust Eliminator and Lube”, that when used, impacts tire and rim maintenance on several different levels.
KTB’s primary focus is to act as a rust inhibitor that prevents rust from building up on any part of the rim by forming a protective coating for the steel. KTB can also be used on rims with rust build-up and over time will clean the existing rust formation by simply washing it away during operation. With the use of the Rust Eliminator and Lube end-users can eliminate the added cost and downtime of constant rim clean up and re-painting as well as having to replace a rim in its entirety.
Very popularly used as a preventative maintenance method, KTB RE&L is well known for reducing tire failures through improved air retention by acting as a sealant for vent/rim leaks, pinholes, and liner cracking. This quick sealing action combats against under inflation and allows for the units to remain in operation avoiding unnecessary downtime.
KTB also plays a very important role in maintaining a consistent running temperature in your OTR tires. The fluid is formulated in a way that it holds an absorbent heat function and acts as an agent for heat transfer to cooler areas of the tire.
In addition to the abovementioned functions, KTB RE&L also allows for an increased “ease of use” around the tire yard. When using the product it also acts as an excellent lubricant that makes mounting and dismounting tires a far faster and safer process, which in turn reduces the downtime and labor costs significantly. While mounting tires, KTB RE&L helps the O-Ring sit and seal properly avoiding any air leakage and potential loss of air pressure in operation.
As safety remains one of the highest priorities to Mining companies they can be assured that KTB Rust Eliminator and Lube will help increase operational safety for your tire handlers and OTR maintenance crew while performing maintenance procedures on both tires and rims.
KTB Rust Eliminator and Lube can be customized to fit every operating condition out there. It is important to have an understanding of how a product like this reacts in certain conditions. KTB Rust Eliminator and Lube is offered in:
Ultra High Performance Blend – For use in extreme heat or extreme cold to combat freezing or evaporation/boiling
High Performance Blend – For use in above average heat or cold
Standard Blend – For use where ambient temperatures remain consistently mild (if either heat or cold are not an issue in operation
BENEFITS OF USE
- Tires run cooler to extend tread life by reducing heat build-up
- Increases casing life – providing increased re-treadability and longer lasting re-treads
- Maintains air pressure – keeps bead area pliable and helps stop dry rot
- Eliminates rust on rims
- Helps detect valve and tire damage and rim cracks
- Lubricates for perfect seat when remounting tires and quick tire removal
- Tire changer friendly – repairing tire made easier
- Recap shop friendly – cleans out in seconds with a wet vac
- Will NOT block valve stem
- Does NOT freeze
- Protects very expensive tire/equipment investments
- CUSTOMIZABLE PRODUCT TO SUIT THE NEEDS OF YOUR OPERATING CONDITIONS
- US EPA APPROVED – DESIGNED FOR THE ENVIRONMENT
- QUICK ANALYSIS OF ALTERNATE METHODS
There is an array of products that are similar to KTB Rust Eliminator and Lube available to the larger mining industry. It must be strongly noted that KTB Rust Eliminator and Lube is the ONLY product within its peer group that possesses the approval of the United States Environmental Protection Agency as well as the ”Designed for the Environment” label which indicates the product is actually safe for the environment (see environmental section).
While many MSDS reports may look similiar when put in comparison, it is the environmental certification of KTB’s product that puts it above the competition. There are reasons why KTB is the only of its kind to be approved, and many of those reasons stem from competitors not exercising full environmental stewardship (see environmental section for technical explanation).
Gaining the EPA approval has forced KTB Products Corporation to sacrifice certain financial gains (investment into specific classes of raw materials),but, KTB has made the investment to ensure its product will NOT contaminate land, water, wildlife, surrounding environment, or humans coming into contact with it.
To learn more go to www.hsmtire.com
Wednesday, March 24, 2010
As market dynamics continue to push toward maximizing efficiency and achieving optimal production levels, HSM Mining Solutions has been formed to assist the increasing demand for world-class technical service as well as expansive mine consulting with a focus on SAVING MONEY. HSM Mining Solutions is a company whose primary function is to aid end-users in creating a streamlined mining operation in effort to continually increase the bottom line. Built on the foundation of ”Creating Value Through Increased Awareness” our team works closely with Mine Management to create a cohesive operation by way of setting goals and objectives with specific purposes.
Available for periodic consulting visits or full service contracting, the HSM Mining Solutions team is focused on creating the best tire management program that is designed for YOUR specific site. Tire culture remains a mainstay at the forefront of our mission and we understand that in order to maximize efficiency mining companies must be aware of how separate operating units affect the bottom line.
CLICK TO SEE VIDEO
Saturday, March 20, 2010
Do you know the real operating cost of your OTR tires and related issue?
Many companies record tire history and track the historical cost. However this does not reflect the actual costs to your company. I will use an example; (Haul Trucks Only)
1. A company has 34 Haul Trucks with 6 tires each truck = 204 wheels & tires.
2. Average cost per tire of 9500.00 USD per tire (2700R49)
3. Average working life of 8500 Hours
4. 204 tyres x 9500.00 USD = 1,938,000.00 USD
5. 204 tyres x 8500 hours worked = 1,734,000.00 hours worked
6. 1,938,000.00 USD = 1.11 USD cost per hour / per tire
1, 734,000.00 hours worked
The above calculation is based on ideal target conditions.
It is common opinion that up to 40% of tires being operated in mine sites are at least 10% under inflated due to improper maintenance. The air inside a tire is the single most important component to a haul truck, without air your truck would be sitting on its wheels unable to move. The air is also the single most important component to a tire; the air pressure gives a tire its shape & allows a tire to roll. Should your tire be under inflated the shape will change affecting its ability to roll. A 10% decrease in air pressure (under inflation) will result in up to a 16% reduction in tread life.
- 204 x 40% = 81.6 under inflated tires
- 8500 hours x 16% reduction in life = 7140 hours
- 7140 hours x 81.6 under inflated tires = 5,82,624 hours
- 204 – 81.6 under inflated tires = 122.4 target tires
- 122.4 x 8500 = 1,0,40400 target hours
- 1,0,40400 target hours + 5,82,624 under inflated hours = 1,623,024 hours worked
- 1,938,000.00 USD cost = 1.19 USD cost per hour
1,623,024 hours worked
From the above equation we can calculate the cost to your company of under inflated tires at;
1,734,000 potential hours x .09 c increase in cost per hour = 1, 56,060.00 LOSS in under inflated tires.
To make matters worse, hour meters are not a true reflection on the amount of work applied to the tires. As in all load & carry situations a Haul Truck will spend a considerable amount of time stationary while being loaded, waiting to be loaded & unloading. Because of this modern trends are to base our calculations on kilometers traveled as this gives a true reflection of the amount of work applied to a tire.
Should one apply these figures to the equation, the sum is very different indeed.
This is only one of a string of factors that relate to the ability of a mine site to reduce tire operational costs. As we add more Haul Trucks, Loaders, & Service Vehicles to the equation, also premature failures due to operating issues we will begin to reflect the true cost rather than simply tracking a tire to give a historical cost.