To say that seven-day mines produce more coal than five-day mines is a statement of the obvious. Seven-day mines operate for more hours per year and produce more "tonnes per shear". Which is more productive? To answer this question we compared a five-day composite mine to a seven-day composite:
· Five-day composite – ie the average longwall production for the top four producers in 2000/01 (ie 3.6Mt)
· Seven-day composite – ie the average longwall production for the top four producers in 2000/01 (ie 4.5Mt) (See note 1).
Measuring productivity of seven-day mines
To answer the question “are five-day mines more productive than seven-day mines?” we calculated what five-day mines would produce if they had the same "tonnes per shear" and operated the same number of hours as seven-day mines.
Therefore five-day mines are considered to be "more productive" if they produce more than 4.5Mtpa (ie the annual production for the seven-day composite) when "tonnes per shear" and "operating time" are controlled for or standardised. We looked at three scenarios.
Would five-day mines produce more than 4.5Mtpa:
- If they had the same "tonnes per shear" as seven-day mines?
- If they operated the same "number of hours" as seven-day mines?
- If they had the same "tonnes per shear" and operated the same number of hours as seven-day mines?
Tonnes per shear
The shears for seven-day mines are 48% larger than those of five-day mines (ie 1450t vs 980t). Five-day mines would produce 5.3Mtpa, or 800,000tpa more than the seven-day composite if it cut shears that were the same size as those of seven-day mines. Therefore, seven-day mines suffer from an 800,000tpa or $29 million (see note 2) productivity gap compared to five-day mines.
Operating Time
Seven-day mines operate for 52% more hours per year than five-day mines (ie 5250 vs 7986 hours) - assuming that five-day mines only operate on weekdays and not on weekends. It is generally acknowledged that five-day mines carry out some production or maintenance work on weekends. We assumed that five-day mines operate for 16 hours per weekend for 52 weekends a year (ie operate for 6082 hours per year).
If five-day mines operated the same number of hours as seven-day mines they would produce 4.7Mtpa. Therefore, seven-day mines suffer from a 200,000tpa or $9 million productivity gap compared to five-day mines. (see note 3)
The combined impact of "operating hours" and "tonnes per shear"
If a five-day mine produced the same number of tonnes per shear and operated for the same number of hours as a seven-day mine, they would produce 7Mtpa. Therefore, seven-day mines suffer from a 2.5Mtpa or $91 million productivity gap compared to five-day mines!
Seven-day mines may be less productive due to other factors. We examined equipment capability and geological conditions to see if they had a negative impact on the productivity of seven-day mines.
Equipment capability
We used the capacity of conveyor systems (ie tonnes per hour) as a measure of overall equipment capability. Seven-day and five-day composite had conveyor systems with 5250tph and 4125tph respectively. Thus the seven-day composite had 27% more capacity than the five-day composite. Therefore capability is unlikely to be the cause of lower productivity for seven-day mines.
Environmental/geological conditions
All of the mines in the seven-day composite are located in Queensland and three of the four five-day mines are located in Hunter Valley in NSW. It is possible, but unlikely, that different geological conditions between the states account for the differences in productivity.
Are five-day mines more productive than seven-day mines?
Our analysis of publicly available data certainly suggests that seven-day mines are not as productive as five-day mines.
- Seven-day mines would produce 7.0+Mtpa (ie longwall tonnes) if they matched the productivity of five-day mines
- The productivity gap between seven-day mines and five-day mines is equivalent to $91 million per year
- Even if five-day mines are "defacto seven-day" mines (ie they operate for 48 hours for 52 weekends), there is still a productivity gap of some 800,000tpa or $29 million
- The 2.5Mt or $91 million productivity gap is probably an underestimate as it overestimates the number of hours that five-day mines operate on weekends. (See note 3).
NOTES
1. Based on JCB figures published in Australia’s Longwalls Sept 2001.
2. Assumes selling price of US$20 per tonne and an A$/US$ exchange rate of US55c.
3. As we do not know how many hours five-day mines operate on weekends we cannot be definitive about the productivity gap.
However, we can say that say that five-day mines, compared to seven-day mines:
- Tend to be more productive when they operate less than 16 hours per weekend
- Tend to be less productive when they operate more than 16 hours per weekend.
*Graeme Baird is the principal of productivity research organisation McAlpine-B. (gbaird@mcalpineb.com.au.)
U_Gap software, jointly developed by McAlpine-B and Brian Nicholls Mining to allow mines to estimate their current utilisation and compare it to best practice utilization, will be available online and for free through ILN from December 3.
