Cost reduction at Cleveland-Cliffs.
The '80s were not kind to iron mining. Many companies left iron mining for good. Those that survived did so by moving aggresively to cut costs. Perhaps no mining company has been as successful as Cleveland-Cliffs Inc.
Cliffs' philosophy has been to cut costs through an applied engineering approach. Perhaps this is best represented at the Hibbing Taconite plant: when it was built, at the heart of the plant were the 36-ft-dia, fully autogenous grinding mills. Although no one had used this technology on such a scale, Cliffs' engineers successfully brought the mills on line, worked out startup problems, and provided the lowest-cost grinding circuit in the iron world.
A Cliffs advantage is that it is multi-operational, having several iron mines and mills. Cliffs sees to it that there is a free flow of information and ideas between the different operations. Frequent plant and mine visits are encouraged, and formal reports are circulated to all iron operations. In addition, an annual operations and technical conference is held with representatives drawn from each property. Ideas, improvements, and progress reports are shared, followed by intense question and answer sessions.
To encourage a willingness to change, employee involvement is encouraged. Old ideas are discussed as well as fresh new ones. The open discussion has developed a structure for projects where the results are clearly measurable in terms of overall cost reductions and are reported so that results can be communicated company-wide.
The impact a proposed project can have is measured against costs in three main areas: labor; energy; and materials and services. Each of these three factors make up about one-third of total controllable costs.
During the past 10 years, productivity has been increased by almost 40% while maintaining production levels at essentially the same rates. Fuel oil requirements have been slashed, at one property they were cut by 55%.
CLIFFS' IRON OPERATIONS
Cliffs operates several iron ore properties as shown in Table 1. In 1989, Dofasco Inc. decided to close the higher cost Sherman and Adams mines in Canada in early 1990. Also, Savage River Mines in Tasmania, Australia was scheduled for shutdown in October 1990. However, Cliffs wholly-owned subsidiary, Pickands Mather & Co. International (PMI) has entered into a letter of intent to restructure the ownership and operation of Savage. PMI will require 100% of the mines' interest. Annual production will be reduced to 1.3 million 1t and operations will continue through 1995.
Mines managed by Cliffs in North America operated at near capacity in 1989, producing a record 39.3 million 1t of pellets. The increase in capacity-utilization rates has required a growth in orebody development, new equipment, and improved equipment-maintenance programs. Investments in larger mining equipment, computerized truck-dispatching systems, and the implementation of computerized mine system are improving productivity even though haulage distances are increasing as mines continue to develop.
To meet steelmaker's changing needs and increasingly tight specifications, Cliffs produced 14 grades of pellets at its North American mines in 1989. Cliffs first produced fluxed pellets at the Sherman mine in 1985. Flux-pellet production reached 10.9 million 1t in 1989, representing 28% of total production.
The Tilden mine magnetite project will give the mine the flexibility to produce pellets in standard or fluxed grades from either hematite or magnetite ore. The $30 million program to allow the operation to process magnetite was completed on time and within budget. In 1989, Tilden produced 1.8 million 1t pellets from magnetite ore in both fluxed and standard grades, plus 5.3 million 1t of pellets from hematite ore. Six 175-st haul trucks were added to the fleet, and a computerized truck-dispatching system was also installed.
Hibbing Taconite added two 240-st Haulpak trucks to its fleet, and will have three additional units operational in 1990. Hibbing Taconite also installed a precision pellet loading-system to provide exact weights and automated railcar loading. The system automatically recognizes the railcar size, pre-measures the correct weight of pellets, and loads them evenly into each railcar.
LTV Steel Mining (formerly called Erie) has installed a truck-dispatch system, but has modified it to also dispatch trains, the first of its kind in North America. What truck dispatching has done for improving truck productivities, this system should also do for its truck-train haulage combinations. LTV is also making significant progress in the training and involvement of employees in Integrated Process Control and Labor-Management Teams. A job restructuring program has been completed to combine numerous job classifications into several craft positions.
Empire set a record production level of 8.1 million 1t pellets in 1989. Larger equipment was also introduced, with three 170-st haul trucks and a 33-[yd.sup.3] production shovel. Empire also implemented a computerized mine-planning and design system. Grinding-mill productivity was also improved by adding a pebble-crushing circuit.
The Wabush operation also set a production record of 6.2 million 1t of pellets. It added two 170-st production haul trucks as well as a computerized truck-dispatch system. Ore for the Wabush plant is specular hematite. Wabush now produces three grades of pellets: standard and fluxed with two levels of manganese content.
The classic mining problem of truck productivity and queuing theory has been largely solved by Cliffs. The technology was not installed all at once, but in steps. Initially voice radios were installed in each haul truck. A foreman was positioned in a central control room with the task of dispatching trucks. Studies revealed that this manual truck-dispatching system increased haul truck productivity by 2%. The voice radios allowed the dispatcher to re-route trucks instantly rather than searching for them in the pit.
The next logical step was to automate truck dispatching. Hibbing Taconite led the way, installing a computerized truck dispatching system in 1985. Not only were communications between truck and foreman improved even more, but the system constantly tracked each truck through low-range transmitters positioned at strategic locations throughout the mine. In addition to providing smoother communications, the automated system also improved ore-grade control. Truck productivity improved 10%.
Not content with these improvements, a mobile dispatching system was put on line in 1986. The mobile unit was able to visually control potential problem spots that were not visible from the stationary dispatcher. This vehicle improved truck productivity about 5%.
Productivity improvements of the manual, computerized, and mobile dispatching system combined are 17%. All Cliffs North American operations now have the computerized dispatch systems.
Another haulage parameter that Cliffs reviews on a regular basis is haul distance for ore and waste. Although this might appear rather straightforward, it is often overlooked in many surface-mining operations. Haul distances have been cut substantially is some instances simply by building a more direct route. Another successful way to shorten haul distances occurs when pit bottom is reached and waste can be placed in the pit, speeding reclamation as well.
Good engineering will provide well designed mine layouts that have the shortest overall haul distances. Computerized mine planning has become a major engineering tool to optimize pit geometry and the mining sequence. The time required to produce a mine plan is less, and the number of alternatives that can be considered is greatly increased, resulting in a better mine plan. Once the plan is operational, it can be modified much more quickly than before to take unforeseen circumstances into account.
LTV Steel Mining Co. has the first 240-st truck (Wiseda) on the range and larger haul trucks are being reviewed, as are larger shovels. Increasing haulage productivity become especially important as mines get deeper and haulage distances grow longer. Hibbing Taconite will be operating five 240-st units (Dresser-Haulpak) in 1990.
In the plants, engineering has focussed on labor-intensive process circuits to increase productivity. For example, crude ore from the crushing plants is transported to ore surge-piles to await grinding. A conveyor-belt attendant was required to be on duty 24 hr/d to make sure that the ore flowed smoothly and that no one bin or pile was stacked too full. By using bin-level monitoring systems (such as lasers or ultrasonic probes) together with microprocessors, Cliffs has been able to automate these crude-ore systems at most properties.
Often automation not only saves labor but also improves product quality. Automated sampling and on-line silica analysis in Cliffs operations have not only resulted in labor savings, but has also resulted in significantly improved silica control and mill productivity. Automatic samplers deliver a sample to a centrally located analytical lab where an on-line, nuclear silica-analyzer processes the sample. The sample sequence and frequency vary somewhat at the different operations but in all cases the process is being sampled and analyzed within a matter of minutes. At three of Cliffs-managed operations, the nuclear on-line analyzer controls (by computer) the addition of reagents to flotation, which is the final stage of the concentrator process. At one other operation, the analyzer provides the data to automatically control cyclone-feed density, providing the required concentrate silica and silica variability.
The automatic sampling system has reduced the hours required to physically perform sampling, plus some tedious lab work has been eliminated. Needless to say, new ways to apply the remote-control principle are being sought.
One remote-control device that paid for itself is the telemotive-radio control for the overhead cranes. Now the cranes are operated by the maintenance crews or operating people as required, eliminating the need for the large overhead cranes to be continually manned.
The rotary drills can be moved by one operator standing outside the machine holding controls connected to the drill by a cable, so that the rotary drill operator no longer needs a drill helper to assist moving the drill from hole to hole, or to the next blast pattern.
Remote controls have allowed radio control of ship-loaders and now a single operator can remotely operate the pellet-stacking conveyor.
ENGINEERING FOR ENERGY SAVINGS
Even before the energy crises, Cliffs knew that energy costs were about 30% of total costs and a major target for cost reduction. Many savings were found, but perhaps the largest requirements for energy are in mineral-processing heat requirements. This factor is measured in terms of Btu/1t of fired pellets.
Induration is where the newly rolled pellet, called a green pellet, is heat hardened at 2,400[degrees]F. In 1977, the average Btu/lt of pellet was 829,000 for Cliffs five North American operations. By careful engineering, this figure was reduced some 35% to 510,000 Btu/lt by the end of the '80s, which is an energy savings of 319,000 Btu/lt.
The first step was to develop a way to recover much of the heat that had been lost to the environment. In the grate and kiln plants, it was necessary to design heat-recuperation systems. In the original design of grate and kiln units, primary kiln air was taken from the first stage of pellet cooling, in which gases were ducted directly into the kiln to recover the heat. The final cooling stage formerly saw gases exhausted to the cooler stack at 1,400[degrees]F. The new system cut off the cooler stack and routed those hot gases to the last stage of drying and to the first stage of pre-heating.
The kiln burner was also improved, and is still under study. The plants can burn natural gas, oil, or pulverized coal, depending on market economics. A newly designed burner uses a more precise, stoichiometric-air system to fire the kiln more efficiently.
Also, computer controls were added with infrared sensors for the kiln burning zone. This system reduced over-firing and saved an additional 15,000 Btu/lt.
Redesigns, such as removing the kiln-discharge grizzly, have also produced significant energy savings.
A simple stainless-steel curtain was installed to separate the recuperating zone of the cooler. This produced an additional 20,000 Btu/lt savings, and allowed hotter recuperating-gas temperatures.
Another significant development was the improved sizing of green pellets. Balling drums produce pellets of all sizes, and only the ones sized about 1/2 in. dia should be sent for induration. The switch from conventional sizing vibrating-screens to roller screens provided improved green-ball sizing, and therefore, better flow of hot air in the induration process. Green pellets by their nature are wet, sticky, a bit like mud balls. It is not difficult to imagine the problems they can cause to traditional screens. The roller screens do not have this problem, although they must be monitored to guard against premature wear, which would produce an incorrectly sized pellet.
Roller screens placed immediately after the balling drums, together with a roller conveyor at the feed end of the grate, produced additional savings of 50,000 Btu/lt.
During induration, magnetite [Fe.sub.3][O.sub.4] is heated to the point where it undergoes an exothermic process (converting into [Fe.sub.2][O.sub.3]) that releases significant heat, which greatly reduces energy requirements. (Cliffs' Wabush Mines has specular-hematite ore, and the Tilden operation which can process either taconite or hematite ore.) But hematite induration does not enjoy this exothermic reaction, and in 1980, Cliffs hematite induration requirements were over 1 million Btu/lt. Similar engineering changes and modifications dropped this figure by 20% by the end of the '80s.
Cliffs boasts that fuel consumption at its newest travelling-grate operation, with full heat recuperation designed in, is just 285,000 Btu/lt.
During the dark days of the energy crisis, Cliffs developed a system to burn alternative fuels. One curious development was at the energy-intensive hematite plant. Searching for a source of carbon to burn, coke breeze, a byproduct of coke ovens, was found to be less expensive than bunker-C oil. It was found that the carbon could be added directly to the hematite concentrate prior to balling. The dry-grinding circuit mixed the coke breeze with the concentrate. It did not hurt pallet quality. At last report, more than 40% of the energy for induration was provided with this coke breeze, although it is mixed with the concentrate at a rate of only 1.2% of carbon, by weight. In addition to cheaper energy, the internal coke breeze allowed the undergrate temperatures of the furnaces to be considerably lower, close to that of a magnetite furnace, resulting in further energy saving plus reduced maintenance. Other alternative fuels continue to be investigated.
One of these proven alternative fuels is coal-water fuel (CWF). In the early '80s, when the price of bunker-C oil was high, a mixture of coal, water, and an additive was found to offer a cost savings. A pilot plant was constructed to produce 1,000 barrels per day of CWF to support the operation of one 20-day test burn. The burn was so successful that a decision was made to expand the furnace CWF plant to 2,000 barrels per day. However, before it could be built, the price of bunker-C oil dropped substantially below the value that would justify CWF. However, the technology is available and waiting should the price of oil ever justify it.
Even if alternate fuels are never used, they can still be used as a bargaining chip when negotiating fuel prices, provided the alternative-fuel technology is proven.
MATERIALS AND SERVICES
This category includes availability of equipment, maintenance, reduction of consumable parts, and so forth. It consumes almost 40% of mine costs.
The haulage fleet is a main target for insuring high availability. Attempts to increase engine life have been successful. In 1978, haul truck engines could expect a life of 7,800 hr on average. Currently that figure is approaching 20,000 hr. Part of that dramatic improvement can be attributed to a redesign of intake air ducting to clean out particulate matter, dust, and other dirt found in mines. In addition, an improved oil-analysis program has made a significant improvement in engine life.
Conversion of one engine from 1,600 hp to 1,800 hp helped the truck's average uphill speed increase by 3 mi/hr. Although that doesn't sound too impressive by itself, it equates to a potential increase in fleet productivity of 9%.
Fuel consumption was cut with several strategies: a temperature-controlled fan clutch, more fuel-efficient injectors, a blower bypass modification, and a fuel additive. These measures resulted in a 4.5 gal/hr fuel reduction, an 18% improvement.
The crushing and grinding circuits have also been the subject of many experiments. It has long been known that grinding rates can be improved by increasing the temperature of the mill pulp. Cliffs pipes the induration-furnace scrubber water at 110-120 [degrees]F back to the mills where it is used as trommel-jet water. This simple step has raised throughput considerably.
At one operation, the nine fully autogenous, single-stage, wet-grinding lines each produce about 1 million It/yr of concentrate. They came with built-in features for wear-material savings. One innovation Cliffs developed is the integral trommel and return tube to replace the conventional mill-discharge screening and return conveyor to return oversize to the mill. The integral trommel is a cylindrical structure fitted with urethane screening panels. Mill product discharging through the trunnion is screened as it passes over the panels. The oversize material does not pass through the screen panels, but is discharged out the end of the trommel into a bucket-wheel that rotates with the trommel. The oversize is dropped into a stationary rock box where a strong water-jet blasts the oversize back through the trommel tube and into the mill. It is easy to see that this system is much less complex than conventional vibrating screens and return conveying or pumping systems. Not only is it less costly to operate, but it improves mill throughput.
Another method to increase mill throughput was found by experimentation with mill rotating speeds, running the mills at various percentages of critical speed until the throughput is maximized.
Great strides have been made in design changes of mill liners and mill-liner materials. The number of mill-liner components were reduced 50% in one case, with a significant increase in mill-liner life. Longer liner life increased mill availabilities from 81% in 1980 to more than 90% today.
Computer control of the mill motors has proved beneficial. Power-draw variations are reduced allowing higher power set-points that result in higher mill throughput. Computer control of mill-charge density has increased mill throughput by optimizing that density.
PHOTO : Cleveland-Cliffs has a reputation for trying new technologies. They were the first with a 36-ft-dia fully autogenous mill in the late 1970s.