Mining supply chain consortium breaks new ground to reduce equipment costs

June 10, 2016— Vancouver, British Columbia

Collaboration between suppliers and end users saves industry millions

Equipment wear and corrosion are leading contributors to skyrocketing maintenance, repair and operations (MRO) costs in Canada’s mining sector. These costs continue to escalate at faster rates than production. With thousands of wear materials on the market, determining the most effective ones for specific oil sands situations becomes a time-consuming and expensive process. Oil sands operators have many supplier choices and aren’t certain on the validity of material performance data.

To tackle these issues head-on, major mining companies and their material and equipment suppliers came together to form a Mining Materials Wear and Corrosion Consortium. This collaboration has continued for two decades, establishing itself as a critical source of technical and operational intelligence for some of the biggest names in the business. Information is shared openly amongst Consortium members who recognize the value of collaborating to identify materials solutions for expensive equipment durability challenges. The National Research Council of Canada (NRC) supports this industrial research initiative by providing independent, third-party management support, value-added materials characterization and testing services.

Looking to the supply chain for innovation

Tapping into the wide field experience of Canada’s leading hard rock and oil sands mining companies, the Consortium looks to the supply chain, from material developers to original equipment manufacturers (OEMs), for innovation. Considering end user requirements and the innovative capacity of suppliers, the Consortium provides arms-length, reliable materials evaluation for specific oil sands and mining sector applications, as well as value-added analyses and materials recommendations. This cumulative knowledge is captured in an extensive proprietary database of evaluation results that represents millions in cost-savings for Consortium members. NRC helps create additional impacts by working with individual suppliers and end users on more proprietary, confidential technology innovation.

Results that mean real savings

Value for both materials suppliers and oil sands producers has been considerable, due to the cumulative R&D expertise and data, and the strong relationships forged between supply chain players.

The collaboration led Shell Canada, one of Canada's largest oil companies, to upgrade their critical (100% plant down) piping systems from a chromium-carbide overlay to neoprene-lined carbon steel, extending their service life from a few weeks to more than a year. "This one change has allowed us to save multi-million USD annually in production loss avoidance and maintenance costs," says current Consortium Chair Duane Serate, also the Wear Technology Program lead at Shell Canada.

Suncor also saved costs in heavy equipment deterioration by implementing a Consortium-derived solution. "Working with NRC has allowed us to implement solutions in the field based on proven lab results," adds Leo Parent, former Consortium Chair and current manager of reliability engineering at Suncor. Since upgrading the materials in their breaker plates, which are integral to the oil extraction process, from a tungsten overlay to a white-iron block overlay, Suncor has realized significant materials cost savings.

A systems perspective to solve the biggest industrial problems

As the mining sector reels from that latest drop in commodity prices, industry need for innovation is only increasing. On top of market vulnerabilities, continued upward pressure on MRO costs is expected as producers pursue extraction of increasingly lower-grade ores and finer grain sizes. Faced with these expensive and technically complex challenges, the mining industry recognizes that the supply chain will be key to introducing system-wide innovations that cut costs and increase competitiveness in global markets.

By approaching mining industry problems from a whole-systems perspective, NRC can help companies break new ground to accelerate technology adoption and solve bigger problems. Past and future innovations would not have been possible without the contributions from both suppliers and end users, and collaboration will continue to be a critical contributor to success.

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