June 29, 2022
Increasing Performance Meter by Meter
Increasing productivity in every operation is a permanent challenge for mining companies today and will continue to be so. Optimizing the performance of each site requires constantly improving results and reducing costs. To achieve this, owners should only focus on producing ore and not spend their time running and managing adjacent processes. Instead, mining companies need to rely on expert suppliers to guarantee efficiency to free up these resources and efforts.
That is what contracts per meter drilled, or PPM (Price Per Meter) do. For PPM contracts, the customer agrees to pay a specific fee for each meter drilled, calculated considering variables such as drilling equipment performance, maintenance, operator training, logistics, storage, transportation of consumables and spare parts, etc.
This business model requires a high level of collaboration and trust between the customer and the supplier. It is necessary to share data, develop solutions, and permanently monitor performance. A PPM contract can be highly beneficial for the operation. To achieve a profitable and competitive rate, the supplier must use all its experience and knowledge to achieve the required levels of efficiency, not only in drilling but also in technical support and advice throughout the process.
"Production drilling is key to the objectives of any operation. Consequently, when we signed the contract, expectations and concerns were high. However, with the support of Boart Longyear's technicians, the first results have been very encouraging," said the Procurement Manager of a large customer in Peru. He added that "reducing costs per meter is fundamental. We have managed to move in that direction. The experience and knowledge of the contract experts have allowed us to optimize the drilling process on an ongoing basis".
A PPM contract increases the productivity of the drilling process because it is possible to:
- Improve the performance of drilling equipment and tools.
- Improve operators' performance
- Reduce drilling and maintenance costs
- Optimize logistics management
A Broad-Shouldered and Comprehensive Team for Complete Success
The success of a PPM contract lies in the combined, coordinated, and joint operation of the different areas involved, both from the customer and the supplier. The operations and maintenance team members must maintain a relationship of trust, providing all the necessary information for the contract's planning, execution, and optimization.
The field technicians involved must be familiar with the entire exploitation process, especially drilling and blasting. They will measure in advance the impact on the entire operation. They must advise the supervisors and contract managers, for example, on the type and quantity of drill bits required in each application and maintain the rods to respond to the demands of the application and the characteristics of the terrain.
The maintenance area must monitor the equipment work at the highest performance rate for as long as possible. Maintenance must be planned, and aimed at minimizing unnecessary downtime and unscheduled stops.
Operators are also a key factor since the correct operation of the equipment and the proper use of production tooling can improve the overall performance of the process. Much of the cost overruns in the drilling process (accelerated wear rate of tools and equipment, downtime due to stuck rods or broken bits, etc.) are due to poor or inadequate operation of machinery and improper use and maintenance of the tooling (drill bit, rod, collars, etc.).
The role of supervisors and managers is also crucial. They are to ensure compliance with the agreements and monitor performance within the schedule to find opportunities for improvement. The correct management of a PPM contract can raise the productivity of the process considerably, either by helping to increase production or by reducing costs in tooling and maintenance of drilling equipment.
Experience and Knowledge that Add Value
There is a high level of competition in the percussive market today. There is a product and a price for any requirement and budget; however, an outstanding performance needs a supplier that adds real value to the chain.
Santiago Valdés, Product Sales Manager at Boart Longyear Peru, explains that "Today competitiveness, price, and quality can be similar from one supplier to another, but the level of service and expertise can make the difference. That is where the real value is added. In PPM contracts, Boart Longyear's technical support and expert advice are critical to improved productivity, as it enables customers to get optimum performance from production tooling and equipment. A high-quality product, world-class service, and an expert team are together making the difference."
In addition to the percussive supply, a PPM contract includes expert advice for the entire process, training and qualification of operators and maintainers, data collection and permanent monitoring, tool maintenance, and inventory management. For Omar Porras, Sales Representative for Percussion Products, "a PPM contract is crucial to achieving a more competitive offer. The customer, whether a mining company or a drilling contractor, can focus on their business, as the supplier handles the logistics and management of consumables."
Train, Maintain, and Plan
While ongoing training may be considered a high cost, the cost of not training will always be higher. To achieve optimal operation, according to the design attributes of the equipment and consumables, the operator must know the operation and capabilities of the equipment and the behavior of the top hammer tooling. To this end, to achieve the planned objectives, the operator must be trained throughout the contract to obtain maximum performance of the equipment and the tools.
On the other hand, it is essential to perform scheduled and adequate maintenance of the rods to increase drilling performance. The sharpening of drill bit buttons optimizes the tool's performance according to its original design and extends its useful life. Maintaining the proper shape of the inserts ensures a higher penetration rate and reduced vibration, which also reduces maintenance costs for the entire string and the drill rig.
A PPM contract will only be successful in monetary terms if the logistics management is adequate. Logistics is one of the most resources- and effort-intensive factors in the mining operation. That is why an agreement whereby the supplier ensures that the tooling is always available is appealing and why a world-class supply chain is the best support for this type of contract. The experience and expertise of those responsible for this process are essential to effectively manage an inventory since it is possible to know the requirements of each operation and anticipate the customer's needs.
Contracts per meter drilled are an effective and convenient solution to the industry's challenge of increasing the productivity of each operation. But success is not just about competitive pricing or high-quality product. Customer – contractor trust and transparency are relevant, as well as the overall experience and expertise of the supplier.