Four Principles explores how Lean can be applied to the mining sector

23 May 2019 5 min. read

A recent report from specialist Middle East lean management consultancy Four Principles outlines how Lean methods can aid mining operators under pressure to improve sustainability.

Somewhat of an old world dinosaur, the mining industry has been slower to embrace disruptive models than most. Yet, it’s under no less pressure to improve sustainability through cost reductions and enhanced efficiency. Here, the team at Middle East lean management specialist Four Principles note the increasing number of mining companies adopting a lean approach, and outline how the Kaizen philosophy can be applied to sustainable mining operations.

Firstly, some regional details as outlined in the consulting firm’s report; with major known minerals including gold, phosphates and bauxite, Saudi Arabia, in particular, has rolled out ambitious plans to increase the value of its mining operations to nearly 70 billion by 2030. Forming part of the region’s widespread economic diversification efforts, the mining industry, says Four Principles, is becoming increasingly important. But how does that relate to Lean?

“If I had to name one thing I have transitioned from what the automotive industry taught me across to what Rio’s mining operations are doing today, it would be an intense, laser-like focus on value and efficiency,” former Rio Tinto CEO Sam Walsh has said. “Many of us are familiar with the systems that fall under the banner of ‘Lean Six Sigma.’ Pioneered by companies like Toyota and General Electric, they are far from confined to any particular industry or process.”

In short, Lean principles stress the customer-focused elimination of waste and enhanced operational efficiencies driven by organisation-wide commitment to small, continuous improvements – and as such readily transfer across all types of organisations, processes and industries. Still, according to the firm, in relying heavily on efficient industrial processes, value stream efficiency and a strict focus on safety, the mining sector is not so far removed from Lean’s birthplace in the automotive one.Specialist Four Principles explores how Lean can be applied to the mining sector“The mining industry faces a unique collection of challenges,” the Four Principles report states. “As sellers of commodities, mining companies must contend with volatile market prices, fluctuating demand and cyclical forces. Drilling deeper into the operations of a mining company, we see that things aren’t any easier: To be successful, mining entities must achieve and maintain high overall equipment effectiveness (OEE) and constantly target minimum wasted product.”

Indeed, a fertile environment for Lean implementations. James Ryan, Principal at Four Principles, continues; “To gain competitive positioning and increase responsiveness in a complex, dynamic market, mining organisations need to be streamlined, flexible and efficient – strengths that Lean thinking is uniquely positioned to impart. These principles are particularly relevant today, as many companies in the mining sector are dealing with the legacy of a strong ‘boom’ period during which high costs and low efficiency were sometimes overlooked and now must be remedied.”

Lean applications

Delving deeper, the consultancy points to several areas when Lean can be of particular benefit to miners, including enhanced production efficiency, improved maintenance outcomes, the ability to adapt to technology, and improvements in environmental and safety programmes – the latter, for example, by empowering every worker to identify problems, find the root cause and eliminate them each day, which the firm says has seen some mining companies achieve improvements of more than 30 percent in their medically-treated  injury frequency rates.

As a broader case study, Four Principles highlights a Lean implementation at Eldorado Gold’s Turkish subsidiary Tüprag, which had been caught on the back foot following the plunge of gold prices and the opening of a new mine during previous highs, resulting in dwindling production performance and increasing safety risks at the new site. After just six months, Lean pilot projects had already begun to yield results, leading to increased traction and further results down the line.

One example was in the creation of a value stream map – a key Lean concept which details the movement of products throughout the process and the resources used at each step – with Tüprag learning that its biggest loss was created by sending materials needed for production to each area separately. As a remedy, standardised material areas were created and refilled hourly, eliminating waiting and material waste, and delivering a 5% cost reduction per meter excavated.

The report concludes with a final note; “Development of the local mining industry is creating major infrastructure demands, including power, transport, communications and construction projects. In such a rapidly developing environment with a long runway for growth, opportunities for mining, resources and infrastructure companies are impressive; however, the path is not without obstacles and the application of Lean principles stands to be particularly powerful within this landscape.”

Related: IKEA partners with Four Principles on Kaizen customer service project