Suppliers News (November 05, 2007)

Caterpillar, Rio cut multi-year supply agreement

In another instance of long-term supply contracts between suppliers and miners, heavy machinery builder Caterpillar (CAT-N, CTA-L) and U.K.-based mining house Rio Tinto (RTP-N, RIO-L) are now partners.

Under a 3-year agreement, Caterpillar will supply Rio with Caterpillar’s Computer-Aided Earthmoving System (CAES) technology, as well as with Aquila drill and dragline systems at roughly 30 of Rio’s open-pit mining operations in Australia, the United States, Namibia and Canada.

The hook for Rio is Caterpillar’s CAES technology — essentially an advanced computer employing global positioning system (GPS) gizmos to guide its machines and aid operators, as well as collect production data. The technology lowers cost per tonne by improving efficiency.

For truck loading operations, CAES displays a digital map of the orebody and types of material to the loading operator, which makes for more precise digging and loading.

Both the CAES and Aquila dragline systems allow an operator to view the position of each CAES-equipped machine in a given zone via a monitor in the cab. Caterpillar says CAES improves productivity by as much as 25% in dozers.

Rio is expected to order more than 200 high-precision CAES systems over the life of the agreement, which also includes a multi-year support contract.

The Caterpillar dealers that will sell and support the products are Australia’s WesTrac and Hastings Deering; Canada’s Hewitt Equipment; Quinn Co., Wyoming Machinery, Wheeler Machinery, Tractor & Equipment and Wagner Equipment, in the U.S.; and Barloworld Equipment, in sub-Saharan Africa.

Among other equipment sought by Rio is the Aquila drill manager, which guides operators on where to place holes. Other features include automatic adjustment for various collar elevations to ensure level benches, as well as monitoring and reporting of drill numbers in real time.

The Aquila dragline system monitors production by tracking every bucket load. Other features include three-dimensional, real-time bucket positioning and reporting of production parameters, including average swing time, total load weight and time of the average cycle.

“We are pleased to be working so closely with Rio Tinto, a leader and innovator in applying technology,” says Chris Curfman, president of the Caterpillar Global Mining Division.

Caterpillar posted sales and revenues of US$41.5 billion in 2006.

FNX completes purchase of Dynatec

FNX Mining (FNX-T, FNXMF-O) has closed the $53-million purchase of the Dynatec Mining Services Business.

Dynatec consists of the Canadian Mining Services Division and Dynatec Mining, which provides contract mining services in the U.S.

“This transaction combines the two entities which made the Sudbury joint venture such a success. The combined company will not only support our ambitious expansion plans at the Sudbury operations, but provides a strong platform for the mining contract business in today’s robust commodity markets,” says John Lill, FNX’s president and CEO.

The purchase price is subject to some capital adjustments.

Schlumberger adds consultant WMC to pipeline

With a view to solving some of the mining industry’s water problems and profiting from them, Schlumberger (slb-n) division Schlumberger Water Services (SWS) has added consulting firm Water Management Consultants (WMC) to the fold.

Schlumberger makes most of its money in the oil and gas business but sees a growing need for water expertise in the burgeoning mining sector, which needs innovative services to help source and manage the large volumes of water needed in excavation, ore processing, and extraction.

“As part of Schlumberger, we will have access to a number of technologies initially developed for the oilfield, but which are relevant to the water and mining sector. This will allow us to handle large, integrated projects,” says Jerry Rowe, chief executive of Water Management Consultants, who now becomes vice-president of operations for Schlumberger Water Services.

WMC’s experience in water resource management includes mine dewatering projects and environmental baseline and impact studies, together with heap and in-situ leaching work.

SWS and WMC operations will be merged into one structure soon after the deal is wrapped up.

In 2001, Schlumberger created Schlumberger Water Services, a global organization that has experience in aquifer evaluation, characterization, and groundwater resource management.

Schlumberger, based in Houston, Tex., employs more than 76,000 people in more than 80 countries. In 2006, Schlumberger had operating revenue of US$19.23 billion.

WMC was founded in 1988 by five consultants. It now has offices in Chile, Peru, Central U.S., Canada, Australia and the U.K.

Sandvik, six universities start mining school

Sweden’s Sandvik Mining and Construction and six international universities have partnered to develop a post-graduate university course on mining engineering under the banner of Sandvik International Mining School.

The post-graduate course will be titled International Mining Engineering and provides Sandvik employees with an academic, job-orientated specialization in raw materials extraction, with an emphasis on international standards.

The six universities are: Mining University of Leoben, Austria, which is also co-ordinating the course; University of New South Wales, in Australia; Finland’s Helsinki University of Technology; the U.K.’s Camborne School of Mines; the Colorado School of Mines, in the U.S.; and South Africa’s University of Witwatersrand.

The course targets engineering graduates interested in upgrading their skills and learning more about the economic and social aspects of mining.

The program includes six courses combining both theory and fieldwork. And each university will offer a course in its field of expertise.

The partnership is believed to be the first of its kind.

“This is a completely new way of specialized international training programs in mining, focusing on the increasing partnership between the industry and universities, meeting the request for an internationally oriented training program bringing the students in contact with the top specialists in mining engineering around the globe,” explains Peter Moser, a professor at Mining University of Leoben.

Adds Sandvik vice-president Klaus Sapetschnig: “The gained extra knowledge will give our employees a considerable competitive edge.”

Sandvik Mining and Construction is a business unit in the Sandvik Group and a supplier of machinery, tools, and services for the excavation of rock and minerals in the mining and construction industries. Annual sales in 2006 amounted to around SEK 25 billion (US$3.9 billion), and the group has about 12,200 employees.

Energy Fuels hires CH2M Hill at Pinon Ridge

Energy Fuels (EFR-T, EFRFF-O) has added engineering firm CH2M Hill to the team seeking a licence to build a mill at the Pinon Ridge uranium project, near Naturita, Colo.

Denver-based CH2M Hill will start by working on a report for the Colorado Department of Public Health and Environment (CDPHE) needed for its licence application. The agency requires details about what the mill will process, how it will process ore and how much material it will handle.

Following that, CH2M Hill will provide a study estimating capital and operating costs that will help secure mill construction financing.

CH2M Hill’s contract could be expanded to detailed engineering, procurement, and ongoing construction management services once the mill licence and financing are in hand.

Already on-site is the Kleinfelder consulting group, which is conducting baseline environmental studies and other work for the mill licence application. Golder Associates is there, too, providing geotechnical services to get processing information for the mill,
tailings cells, and evaporation ponds.