The logistics challenges in the mining industry are unique and complex, and the way in which mining companies deal with these challenges could help cut costs, or erode their profits. With an end-to-end service offering to the mining industry, logistics company Imperial Logistics is helping clients, such as coal miner Exxaro and mining equipment manufacturer Joy Global Mining, to drive costs down, while boosting critical service levels.

According to Imperial Logistics group business development executive Gerrie de Jonge, mining companies are increasingly recognising the value of outsourcing their supply chain and logistics functions. “Smaller to medium mines are quickly following this growing trend, and it’s starting in bigger mining groups now,” he adds.  “Key to reaping the benefits of outsourced logistics, however, is for the mining company to partner with the right service provider.”

A service offering to the mining industry that includes outbound and inbound logistics, as well as the ability to use additional external capacity in a managed logistics environment, reflects Imperial’s commitment to customising its vast experience in outsourced value chain management for the benefit of each one of its clients, in order to most effectively drive their competitiveness.

Outbound solutions
The group’s outbound offering includes internal transport for mines, managing stock piles and offering transport solutions, De Jonge explains. “Our focus in this area is on bulk transport over shorter distances - from mines to coal power stations, for example,” he notes.

Where possible - and cost efficient - Imperial offers its clients the opportunity to leverage the strengths of road and rail transport, with multimodal solutions. The group has signed a memorandum of understanding with Transnet Freight Rail (TFR) aimed at exploring multimodal collaboration opportunities within the logistics and transport sector.

“We are very excited about the structured way in which we can now engage with TFR as a partner to service our clients,” states De Jonge. “By working together, we aim to leverage road and rail logistics capabilities to reduce road congestion and greenhouse gas emissions and to lower transport costs for customers. We aim to divert freight currently shipped on road to multimodal combinations with the promise of more cost effective end-to-end solutions.”

Imperial has built up an impressive resumé in the mining sector. In terms of outbound logistics, the group’s transformation of an underperforming coal depot for South Africa’s second largest coal producer has won awards and accolades, as well as kudos from client Exxaro.

Coal loading and transport for Exxaro
When Imperial took over the coal loading and transport service contract for Exxaro’s Inyanda coal depot, it faced the challenge of transforming an operation that had previously been underused, and renovating a facility that was in a state of disrepair, De Jonge says.

Through a two stage solution, and by establishing a supply chain partnership with Exxaro, Imperial Logistics transformed the inefficient depot, which now has the ability to optimally plan its operations; manage and control costs; realise efficiencies and measure productivity.

Exxaro is the second largest South African coal producer - with a capacity of 47-million tons a year - and the third largest global producer of mineral sands.

“As Exxaro’s new supply chain partner, our challenge was to improve service levels, boost production and enhance efficiencies, in order to drive Exxaro Inyanda’s competitiveness and ensure the operation’s sustainability.”

The water logged depot was in a state of almost total disrepair and was inadequate in all respects, with an unstable surface and dust contamination being just some of the concerns. “Poor coal density resulted in insufficient payload capacity,” he explains.

“The nature of the business required seven to ten trips a day and equipment maintenance was inadequate in the extreme.” Outlining other problems, De Jonge says that truck tractor and trailer combinations exceeded legally permissible lengths. “Under- and over-loading of rail wagons was also a significant problem, as this activity relied on inaccurate visual estimates, while the depot’s poor environmental management was also an issue. Environmental complaints were rife, and issues included coal spillages, dust, grazing and water contamination.”

Two stage solution
The two stage solution implemented by Imperial Logistics encompassed immediate change in terms of equipment and facilities at Exxaro Inyanda, and long term change of systems and management, resources and protocol. De Jonge elaborates: “The initial solution included stabilising the property by deploying graders and rollers, and covering the surface with a run of dump stone. The suppression of dust and water reticulation on site was thus greatly improved. Dust suppression is now constantly managed in the proximity of the operation through a chemical and water process.”
The entire fleet of transport equipment was replaced. Load cells were installed on all front end loaders, resulting in actual measured weight loads. “Legal specifications were met, resulting in a substantial increase in payload,” he adds.
Imperial Logistics’ solution has added value to the business and its operations; improved income streams and reduced the cost of sale. The entire operation has been transformed, and is now more flexible and able to deal with peaks and valleys in volumes. The success of the supply chain partnership has been instrumental in driving continuous operational and commercial improvement initiatives.

Operational efficiencies and commercial benefits

Exxaro commercial manager Hans Prinsloo says that not only has the operation’s association with Imperial Logistics yielded operational efficiencies, but commercial benefits, too. “Since appointing Imperial Logistics to take over this contract to manage our coal transport and loading operations at Inyanda, we are consistently achieving budgeted monthly coal volumes. The ‘take or pay’ penalties that we used to incur through agreements with service providers downstream – when we failed to deliver certain coal volumes on time – are now a thing of the past,” he enthuses.

Prinsloo reveals that before Imperial Logistics, trains supplied by Transnet were sometimes cancelled because coal didn’t reach the siding in time for loading, or loading equipment was not operational. “This, too, is a thing of the past, thanks to Imperial Logistics. In fact, as a result of our loading efficiencies, we are now sometimes provided with extra trains by Transnet, which enables us to boost our volumes and generates additional income for both Exxaro and Imperial Logistics.”

Following on from Imperial Logistics’ success in transforming Exxaro’s Inyanda coal depot, similar solutions – in partnership with Imperial - are being rolled out at other Exxaro operations, including Ellisras.

Inbound logistics for mines
Imperial’s inbound logistics solutions for the mining industry include general flatbed transport of mining consumables. Warehouse consolidation is also offered. De Jonge expands: “Suppliers send all the goods for the mine to warehouse consolidation warehouse. Imperial then make up a truck load to go to the mine, offering our clients the most efficient, cost effective inbound solution. ‘Milkdrop’ scenarios are also offered, whereby consumables, in one load, can be delivered to more than one mine.”

Imperial Logistics also operates a dedicated warehouse for client Joy Global Mining. “This contract is one of our inbound success stories,” De Jonge enthuses. Joy Global Mining awarded the outsource contract for its distribution service to Imperial on the strength of the group’s full distribution service offering.

“As a distribution expert, we do much more than just provide trucks,” De Jonge stresses. “We offer planning and transport management systems, proof-of-delivery management, proof-of-delivery automation, as well as exceptional responsiveness on the breakdown service.” The latter is critical, he notes, since the breakdown service demands an extremely high level of service and very short turnaround time, in order to minimise the costly repercussions of downtime at a mine. “The breakdown side of the distribution contract is very dynamic and very intense, with 24/7 service.”

Joy Global Mining’s stock replenishment distribution runs according to a daily plan, and Imperial has added value for the client by optimising routes and planning.

An Imperial staff complement of 15 drivers and three management staff are dedicated to Joy Global Mining’s contract, and operate from the company’s Wadeville premises. Up to 10 additional flexi time employees are on hand to be brought in when needed, De Jonge explains. Imperial runs a dedicated fleet of seven breakdown vehicles for Joy Global Mining, along with six vehicles for stock replenishment.

Expansion in Zambia
In order to enhance its service to its mining clients in the Zambian Copperbelt, Imperial recently extended its African footprint into northern Zambia, with the establishment of a transport depot in Ndola. This venture augments the group’s ability to provide transport and logistics services to the mining firms operating in the region, while creating employment opportunities for locals, De Jonge explains.

Job creation is an integral part of the new business, and is in line with the Zambian government’s drive to boost employment through mining investment, and to empower local companies. Imperial’s Ndola depot will initially have 15 dedicated vehicles, and a full time staff complement of between 25 and 35 people.

Improved turnaround times
The new depot will enable Imperial Logistics to offer its customers in the region a better service, with improved turnaround times and reduced logistics costs. The group also offers long distance cross border transport, with both inbound and outbound solutions, De Jonge adds.

An exciting new addition to Imperial Logistics’ service offering to the mining industry, specifically for mining consumables outbound into Southern Africa - and one that De Jonge believes has enormous potential - is a Managed Logistics business.

Expanding on this service, he explains that Imperial Logistics partners with other companies to offer additional capacity to mines wherever their need exceeds Imperial’s own capacity. “The advantage for the client is that Imperial remains the one point of contact for the mine, and continues to manage the cross border logistics - and the other service providers - as it would when utilising its own fleet. This is an efficient way to deal with the volatility and fluctuating volumes that are prevalent in the mining industry.”

Rounding off Imperial Logistics’ full service to the mining industry is the group’s logistics consulting and advisory service, which enables mining companies to optimise their business processes and technology.