Iron Ore company of Ontario

IRON ORE COMPANY OF ONTARIO

SUBMITTED BY, SUNIL PANDEY SECTION B 2012116

Sunil Pandey Section B 2012116 Page 1

Iron Ore company of Ontario

Case Synopsis:
George Sharp, the mine superintendent (IOCO) and Tim Smith, the general superintendent of operations (IOCO) in 1990 were concerned about the question of handling loaded ore trucks during operations delay of the ore crushers at the mine. The IOCO operated a large open-pit iron-ore mine in Northern Ontario. Besides the mine itself, the company operated an ore-handling facility on Lake Superior, loading ocean-going ships, and lake freighters. The mine was located in a crescent shaped ore deposit. Production was scheduled on a year-round, 24-hour-per-day basis to produce over 46million tonnes of crude ore per year, yielding about 21million tonnes of high-grade concentrate. To accommodate this production, a concentrator was built with an input capacity of about 1760 cubic metres of crude ore per hour, and was operated at capacity at all times. After a blast, large electric shovels moved into a position to load diesel-powered trucks. These hauling units carried the waste material to a waste dump outside the mine, while ore was hauled to the crushers. Everyday 128,000tonnes of ore and 80,000tonnes of waste rock were hauled to the crushers and waste dumps respectively. The ore, containing 30 per cent iron, entered the crushers, where large rocks were reduced in size by jaw and gyratory crushers. After being crushed, the material passed by conveyor to the concentrator where it was further ground and separated into waste tailings and 66 per cent iron concentrate.

Initial operations: When the mine began operations in 1985, Sharp's predecessor noted that trucks often arrived from the mine with a full load of ore only to find both crushers closed. Trucks then turned around and returned to the mine and dumped the ore beside the shovel which had originally loaded it. The entire shovel truck crew then moved from their ore zone to a waste zone until the crusher was re-opened. About 15minutes of production was lost each time a shovel changed location to move from an ore zone to a waste zone. Recognizing the inefficiency of this type of operation, the superintendent started a stockpile about 120metres from the crushers. Loaded ore trucks dumped at the stockpile, instead of returning loaded to the mine when both crushers were down. It was thought to be cheaper to station a shovel, which would otherwise be spare at the stockpile, and move the ore from the stockpile to the crushers later, than to send loaded ore trucks back to the mine. The time taken for a loaded truck to come from a shovel in the mine, turn, and dump on the stockpile was effectively the same as the time needed to carry ore to one of the crushers, turn, and dump. Therefore, the cost of ore reaching the stock file was the same as the cost of ore entering the crushers. Time was spent reducing the stockpile during periods of blasting when Sunil Pandey Section B 2012116 Page 2

Iron Ore company of Ontario

all production trucks were moved out of the mine, and during shovel breakdown which freed trucks.

Problems and Solutions: Sharp felt that once shovel-truck team began to produce, it was important that the team remain on the go. Workers in the mine might feel frustrated and lose enthusiasm for their work, if their cycle was periodically disrupted and also reduce the efficiency and productivity in the mine. Accountants had suggested, however, that the fuel consumption of waiting trucks or bulldozers would only be about 10per cent of the normal amount. Also, their maintenance and supplies expenses were about 20 percent of the normal amount. A temporary idle shovel consumed electricity at its normal rate, and incurred maintenance and supplies expenses at about 20 percent of normal rates. On the other hand, Sharp wanted to use the stockpile as little as possible because of the additional cost of re-handling ore. It had also been suggested that the stockpile be used for storing various grades of ore. The varying grades of ore could then be used for blending to maintain constant grade control of the finished concentrate. Such a practice was considered impractical because of the lag between the input of crude oil and the production of finished concentrate. However, the stockpile was useful for ensuring a continuous flow of ore to the crushers during the 30minutes each day that the mine was cleared for blasting, as well as during poor road conditions and shovel breakdown. Sharp had to evaluate the courses of action open to him. He and Smith had agreed that there was an optimum point at which total waiting and stockpile rehandling costs would be minimised and further agreed that the current rule failed to minimise these costs. He knew he would be called on to recommend a new plan to Smith.

Sunil Pandey Section B 2012116 Page 3