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Effects of strikes on physical asset management in the mining sector

According to Stefan Swanepoel, Associate Consultant at Pragma, the unlawful and violent nature of the recent strikes increase uncertainty and risk in the mining industry. “This could significantly influence decision making for risk averse mining companies and investors, especially when they have other expansion and investment opportunities. The strikes, do however, raise questions about the working and living conditions of miners, interfaces between labour resources and mining houses, as well as the need for the increased mechanisation of mining versus our current labour intensive mining practices, which are questions that would need to be answered to ensure long term sustainability and stability in this industry.”

Swanepoel reckons lost production time inevitably leaves mines behind on their production forecasts. “This requires recovery projects that often necessitate the operation of equipment above their designed utilisation levels, which could then result in equipment not being properly maintained, reducing equipment life and increasing the frequency of breakdowns.” Stefan Terblanche, Partner Consultant at Pragma, adds: “Add to this the startup of equipment that was not stopped or parked appropriately when the strike started, operation under skeleton or new and inexperienced staff, as well as the effects of possible sabotage, and you end up with much reduced equipment reliability in the long run.”

Swanepoel and Terblanche reckon physical asset management problems due to strikes can be minimized. Says Swanepoel: “There should be clear, pro-active contingency plans in place of how to maintain equipment under strike conditions. For example, proper shutdown procedures should be in place to ensure equipment doesn’t get damaged while standing. Also, the identification and continued maintenance of equipment that cannot be shut down should be ensured. Thorough inspection procedures before re-commissioning equipment as well as policies and standards for the utilisation and maintenance of equipment should be ready. All of the above could prevent knee jerk reactions when attempting to recoup lost production after strikes.”

Terblanche adds that pro-active physical asset management practices can reduce the overall impact of strikes. “We can certainly assist in identifying risks and assist with pro-active mitigation planning to limit the effect on the physical assetsof similar events in the future. Strike periods can potentially be used as opportunistic shutdown periods to overhaul or carry out extensive maintenance work. Furthermore, on-going formal Work Management practices on the maintenance side can enable a mining operation to turn these strikes into opportunities by grouping and performing critical maintenance work,” he concludes.

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