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Optimization of raw material extraction and preparation

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Optimization of raw material extraction and preparation

  1. 1. Strength. Performance. Passion. © 2015 Holcim Technology Ltd. 18 April 2013 Holcim Mining Community Optimization of raw material extraction and preparation Holcim Azerbaijan –Garadagh plant/Success Story Summary Name Ivan Pjanić Quarry manager Holcim Azerbaijan Team member names: Farid Mehdi Project Manager (Cost Optimization) Editor: Stéphane Ortega Cost savings • Raw material saving CHF 2.5 million El Energy saving 51,234 CHF Learnings •Using PGNA in a proper way with constant calibration (once per month) gives more uniformity in raw material; •Constant monitoring of the crushing process with weekly adjustments gives a better fragmentation result, increasing production and at the same time decreasing energy consumption; •Pre-blending of raw material reserve creates the opportunity to improve the organizational loading and unloading process. Links Subject Holcim Azerbaijan uses clay and limestone as raw materials for clinker production. The Garadagh plant owns a clay deposit and its mining rights, but raw material extraction (RME) and raw material preparation (RMP) is fully outsourced. The plant has four limestone sources: Shahgaya West Quarry, Shahgaya West Area, Geological Site 1 and Geological Site 2. Holcim owns the land and mining rights of the Shahgaya West Quarry, but the site was never been operated due to high associated costs of raw material extraction: use of explosives for drilling and blasting activity is expensive and highly regulated; mechanical ripping tests performed in 2008 were not satisfactory. The main limestone sources for the plant are Geological Site 1 and 2, which provides waste limestone from the stone cutting industry. Raw material extraction and preparation for these sites are fully outsourced to the same company that operates the clay deposit. This business practice has a direct impact on the plant 15A report: RME+RMP are CHF 5.54 /ton higher compared to the average Holcim Group Plant. In 2012, Holcim Azerbaijan slowly started to develop its own waste limestone extraction and preparation activity in Shahgaya West Area (area located in the proximity of the dormant quarry). Here, we purchased the raw materials directly. The challenges faced by our operation were related to:  Low volumes of delivered material; - Low efficiency of the mobile fleet (loaders and dumpers); - Maximum crusher output volume reached in 2012 was 2000t/day;  High quality fluctuations; - Wide chemical variation of CaO% in raw mix; - Oversize pieces (``fish stone``) in crusher output: more than 10% larger than 55mm;  High operating costs; - High electrical energy consumption of the crusher (2.02Kw/t);
  2. 2. Strength. Performance. Passion. © 2015 Holcim Technology Ltd. 18 April 2013 Achievements In 2013, the following achievements were reached: 1) With proper mobile fleet and crusher management, we have increased the output of our operation from 2300 t/day to 4850 t/day (per working shift). 2) After a thorough investigation of the limestone extraction points, we were able to achieve a better pre-blending effect of waste limestone before the crusher. Quarry PGNA was calibrated on a monthly basis and an additional weekly control of the results conducted. This approach drastically reduced the chemical variations of the delivered material. 3) Crusher settings were adjusted and the following results were achieved: - Production rate increased from 450 t/hour to 750 t/hour; - Oversize in crusher output reduced to 0.3%; - decreased Electrical Energy Consumption from an average of 2. 02 Kwh/t to 1.25 Kwh/t All the implemented actions gave the operation from Shahgaya West Area the possibility to deliver a total limestone volume of slightly more than 1 Million tons out of the 2.0 Million required by the plant in 2013. Impact: based on a comparison between 2012 to 2013 15A reports (Raw Material Extraction and Raw Material Preparation) we noticed a cost drop of EUR 1.1 /t in the RME Variable Cash Cost (Outsourced Activities). Overall, in 2013 RME+RMP Total Cash Costs (Variable + Fixed Costs) achieved a saving of EUR 2.1 million (CHF 2.5 million).
  3. 3. Strength. Performance. Passion. © 2015 Holcim Technology Ltd. 18 April 2013 In comparison to the average Holcim Group Plant baseline, we decreased the Total Cash Cost RME+RMP from CHF 5.54 /ton in 2012 to CHF 4.25 /ton in 2013. Garadagh 15A 2012* Garadagh 15A 2013** Average plant*** CHF/ton RME RMP RME+RMP RME RMP RME+RMP RME RMP RME+RMP Variable Cash Cost 5.13 0.08 5.21 3.80 0.07 3.87 1.66 0.54 2.20 Fixed Cash Cost 0.25 0.08 0.33 0.37 0.01 0.38 0.87 0.56 1.43 Total Cash Cost 5.38 0.16 5.54 4.17 0.08 4.25 2.53 1.10 3.63 Cost of Goods Produced 6.75 0.82 7.57 5.57 0.78 6.36 NA Production/year [miot] 1.9 2.0 1.6 * CHF/AZN rate 1/0.838 (average exchange rate from Jan to Dec 2012 http://en.cbar.az/other/azn-rates) * CHF/AZN rate 1/0.847(average exchange rate from Jan to Dec 2013 http://en.cbar.az/other/azn-rates) **Average Holcim Group plant - base line 2007/2010 (HTEC data); In January 2013, with support of the Management team of Holcim Azerbaijan, Ivan Pjanic (Quarry Manager) led the raw material strategy of Garadagh Plant. For the financial simulations, calculations and prediction of production prices, Ivan was supported by Farid Mehdi (Cost Optimization Manager). The implemented changes helped the plant to achieve one of the largest savings in the field of Raw Materials from Holcim Emerging Europe Region with further actions planned to achieve even a higher performance of our raw material operation. CHF/AZN exchange rates - 2011: 1/0.894; 2012: 1/0.838; 2013: 1/0.847 (average daily rate Jan to Dec; source http://en.cbar.az/other/azn-rates)