A recent Costmine article stated that rising labor costs due to inflation are on the verge of replacing oil products as a mine’s most expensive operating cost. According to Costmine Intelligence, a unit of The Northern Miner Group, labor costs have increased 30% since 2015 and are expected to be the fastest increasing element in a mine’s expenses. Mike Sinden, Costmine VP indicated that for open pit mines, labor could exceed half of their costs. Unionized labor also impact on the effects of inflation with mining operations in more unionized labor markets like Canada would see a slower impact of inflation due to “sticky” contracts versus the U.S. which has a more flexible labor market.
With increasing demand for metals for low-carbon technology such as lithium and cobalt, there’s a rush to expand existing and develop or open new mines. As a result, there will be an increasing demand for skilled labor with the corresponding increase in labor costs.
To offset rising labor costs, reducing expenditures in areas such as fuel and lubricants, which make up a significant chunk of mine operations, would be the next logical place to focus on. Costmine’s index of operating expenses show that, for example, an item such as a 100-ton haul truck hasn’t increased in price from $1.6 million in 2015, however, the cost to run the truck has skyrocketed. In 2022, a haul truck cost $175/hour to run, while in 2015, that same truck would have cost $108/hour.
With haul trucks being one of the most expensive assets to purchase and operate, ensuring this asset is effectively utilized is a key priority. Annual maintenance is critical to ensure effective utilization and oil analysis is an integral part of the maintenance process. Original equipment manufacturers provide standard maintenance guidelines such as oil changes every 500 service hours and injector changes every 6,000 service hours. By working closely with an oil analysis lab, programs such as extended drain trials can be done to carefully monitor oil condition and determine the optimum interval specific to the conditions the fleet operates in.
For example, a large operating a large open pit mine contracted Fluid Life to work with them on a reliability project to investigate oil drain extensions for their haul trucks. This extended oil drain interval project combined routine oil analysis with SEM-EDS wear analysis which validated that oil drain intervals could be extended with negligible effect on oil condition and wear. The company decided to implement a 750-hour engine oil drain interval based upon this study. This modified oil drain schedule allowed for a reduction of six “level 1” PMs per year which results in 480 less PMs per year for the entire truck fleet. Routine oil analysis continues to be done to ensure the condition of the oil is being monitored.
Talk to a Fluid Life representative today and find out how we can work with you to improve equipment reliability, increase uptime, and reduce maintenance costs.
