Implementing Sustainable Lubrication Improvements. Darryl Gray Matthew Grant

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1 Implementing Sustainable Lubrication Improvements Darryl Gray Matthew Grant

2 Starting Point- Turning This into This

3 Overview Background on Xstrata/EHM Starting Point Lubrication Process Improvement Benefits to EHM

4 Xstrata plc A major global diversified mining group Headquartered in Switzerland Listed on London & Zurich Stock Exchanges Top 20 in FTSE 100; S&P Europe 350 Index Market capitalisation approx US$45 billion Employs 43,000+ people worldwide

5 Ernest Henry Mining Located in NW Queensland, approx. 40km north of Cloncurry Copper/gold operation Employs over 580 people Began commercial production in 1998

6 Ernest Henry Mining Open pit operation- final dimensions 1.3km x 1.3km x 570m deep Produces 11 million tonnes of ore per annum Seeking to extend operations past the scheduled completion of open cut in 2010

7 EHM Concentrator Processes 11 million tpa of ore Produces approx. 115,000 tonnes of copper and 120,000oz of gold annually Single-line plant Employs around 90 people

8 EHM Concentrator Major Equipment Gyratory crusher Conveyor System SAG Mill Ball Mill Vertical Grinding Mill Flotation Circuit (rougher and 3-stage cleaning process) Concentrate and Tailings Thickeners Pressure Filter

9 Starting Point Lubrication-related failures common (30-40 hours per $2000/minute) SAG Mill Gearbox replaced/overhauled on average every months (cost around $500K plus up to 5 days downtime) Contamination levels (particles and water) off the scale Inappropriate lubrication management practices

10 LPIT Process Lubrication Process Improvement Teams (LPIT) were formed across Xstrata NQ in 2004 Driven by central maintenance department with assistance from lubrication consultant Involvement from reliability engineers and lubrication technicians

11 LPIT Process Overview 1. Document the AS IS 2. Plan & Consolidate 3. Employ Resources 4. Manage and Review 5. Optimise and Re-Plan

12 1- Document AS IS

13 Lubrication Audit Following areas were identified as requiring significant improvement: 1. Lubricant Application 2. Lubricant Storage and Handling 3. Contamination Exclusion and Removal 4. Structure, Support and Education of Staff (including sampling practices)

14 Lubrication Application- Use of (old) single-point Auto- Grease Lubricators

15 Lubrication Handling- Poor Handling of 1000L Pods

16 Lubrication Handling- Poor Handling of 1000L Pods

17 Lubrication Handling- Poor Filter Storage

18 Lubrication Handling- Poor Housekeeping

19 Lubrication Handling- Dispensing Facility/Use of 205L Drums

20 Lubrication Handling- Waste Oil

21 Contamination Management- Incorrect Breathers

22 Contamination Management- Water Ingress As a further example of contamination management- during the audit, the Ball Mill Fixed Bearing oil circuit was contaminated with water, reaching levels of 27,000ppm and emulsifying

23 Contamination Management- Poor Mill Seals

24 Oil Sampling- Incorrect Sample Points/Techniques

25 Education, Structure and Support of Staff No full-time lubrication technician or reliability staff Use of three different labs for oil sample analysis No written lubrication standards No lubrication training

26 2- Plan and Consolidate

27 Set Standards- Cleanliness Targets Cleanliness Target for Gearboxes 19/17/14 (ISO: ) Cleanliness Target for Hydraulics 18/15/12 (ISO: )

28 Set Standards- Contamination Control Portable kidney loop filters available to achieve the ISO targets on compartments Permanent kidney loop filters on all bulk lube tanks Water and Particle Contamination eliminating breathers fitted to all dispensing tanks, pods and drums. Oil dispensing manifolds fitted with (5µm Absolute Filters at Dispensing - Minimum) Inlet and outlet filters fitted to bulk lube installations (pods and tanks)

29 Set Standards- Oil Sampling and Analysis Oil sampling and analysis on all critical equipment with lube compartments Test criteria defined for each compartment type Live sample points fitted to all fixed and mobile lube compartments All people involved in taking oil samples trained Key maintenance people to complete oil analysis and interpretation training

30 Measure and Compare with Targets Specifications Before (14/08/04) Present (6/10/04) Target Shell Omala F460 VG ISO Cleanliness >28/#/# 23/18/15 17/15/12 Particle Size Distrib. (%) (<10um) (10-20um) (>20um) No. Particles of (>4um) 1,900,000 60, Est. Life Extension Water (Crackle or FTIR) <0.1 <0.1 Below Saturation Filtration (Nominal) 20um 20um On Target <20um Offline Filtration Trolley No No Yes Machine Proactive Servicing - Seals, ect No Start The Norm!

31 Lube Process Improvement Team Team Leader- Darryl Gray EHM Concentrator Maintenance Team Support from Maintenance and Central Engineering (Glen Croft) External Specialist Support (Wayne Dearness)

32 Training and Personnel Support All maintenance personnel to undertake 2- day lubrication and contamination management course All supervisory and management personnel to undertake 1-day lubrication course Key staff to undertake oil analysis and interpretation course RCM RCA

33 3- Employ Resources

34 Employ Resources- People Full-time Reliability Officer Full-time Lubrication Technician

35 Alfa Laval Centrifugal Filter

36 Alfa Laval Centrifugal Filter

37 Alfa Laval Centrifugal Filter

38 Alfa Laval Centrifugal Filter

39 Alfa Laval Centrifugal Filter

40 Alfa Laval Centrifugal Filter

41 Portable Kidney Loop Filtration Trolleys

42 Mill improvements- Kidney Loop Filters

43 SAG and Ball mills oil cooler (58 0 C to 45 0 C)

44 SAG and Ball Mills heat exchangers

45 Desiccant Breathers- First Trial

46 Desiccant Breathers- Second Trial

47 New Breathers

48 New Breathers/Fill Points

49 Mill Improvements- New System

50 1000L Pods

51 Lube storage shed

52 Lube storage shed

53 Lube pumps

54 Lube pump

55 Dispensing valves

56 Oil Storage Tanks

57 New Sample Points

58 Cost- Setup Filter systems fitted to all lube systems and gearboxes Alfa Laval centrifugal filter $120,000 $52,000 Lube storage facility $50,000 Oil storage tanks $127,000 Wear particle counter $5,000 Total $354,000

59 Cost- Ongoing Lubrication Technician Reliability Officer Running Costs (Filters, Breathers etc) Training Total $120,000 $120,000 $16,000 $10,000 $272,000

60 4- Manage and Review

61 Contamination Control- Alfa Laval SAG FLT SAG FLT CRUSHER SAG FLT

62 Contamination Control- Alfa Laval

63 Contamination Control- Water Sag Fixed Sag FLT Ball Fixed Ball FLT

64 Contamination Control- Water

65 Quantifying Impact- Early Days CONCENTRATE FILTER HYDRAULIC POWER UNIT OIL TYPE Shell Tellus 68 DATE 17/12/ /12/ /12/2004 6/01/ /01/ //01/05 29/01/2005 > 4 um Count > 6 um Count > 14 um Count Water Content ppm ISO \21\15 21\20\15 18\15\12 22\21\17 19\17\14 20\17\11 17\15\12 Particle Size Analysis /12/ /12/ /12/2004 6/01/ /01/ //01/05 29/01/2005 > 4 um Count > 6 um Count > 14 um Count Water Content ppm Filtering Buggy installed 17/12/2004 Filtering Buggy reinstalled 6/01/2005 Filtering Buggy removed 31/12/ ltrs of oil added 20/01/2005

66 Quantifying Impact- Early Days Ball Mill Floating Bearing E332LU008 Trend count PPM Jan Jan Mar Jun 05 7 Jul Jul jul-05 4 micron 6 micron 14 Micron Water

67 Quantifying Impact- SAG Mill Floating Bearing

68 Quantifying Impact- Ball Mill Fixed Bearing

69 Quantifying Impact- Vertical Grinding Mill

70 Quantifying Impact- Larox Filter

71 Finishing Point

72 Quantifying Impact- Contamination (SAG Mill Floating Bearing) Sample Date ISO Codes Particles/mL (>4µm) Particles/mL (>6µm) Particles/mL (>14µm) 30/10/04 24/20/19 122,880 7,680 3,840 31/8/06 18/16/12 2, Contamination Removed: >4µm: 98.1% >6µm: 93.7% Equivalent to 59kg/day of particles >14µm: 99.3% Estimated Life Extension: 526%

73 Quantifying Impact- Downtime hours lubrication-related downtime hours lubrication-related downtime hours lubrication-related downtime minutes lubrication-related downtime Estimated saving: $3.2million in 2006

74 Quantifying Impact- Mill Gearboxes Each gearbox replaced only once since 2004 (for upgrade purposes rather than failure) Currently 18 months in service with no indication that replacement/overhaul will be necessary in the near future. Expectation is to at least triple life, possibly extend to 5-6 years. Estimated saving- $ k pa

75 Quantifying Impact- Oil Consumption Since 2005, lubricant and sealant consumption has decreased by approx. 18%. Saving- approx. $40k in 2007 Achieved through fewer changes of oilbased on condition rather than time, use of oil storage tanks for mills

76 Return on Investment Expenditure on improvements since 2005: Setup: $354,000 On-going: $624,000 Total: $978,000 Savings since 2005: Downtime: $6,500,000 Gearboxes: $1,000,000 Consumables: $65,000 Total $7,565,000 Return on Investment: 780%

77 5- Optimise and Re-Plan

78 Future Plans Senior Reliability Engineer- Sept 07 Maintenance Engineer- Jan 08 New Portable Kidney Loop Filter New Alfa Laval Contamination Control Improvements Improved KPI Reporting Review/Formalisation of Lubrication Standards

79 Conclusion Lubrication improvements, in order to be sustainable, involve significant work and financial commitment The benefits outweigh the costs by a significant margin

80 Questions

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