1.

Mining industry Overview

The industrial production and economic growth drives the demand both in domestic and foreign markets. High capital
costs involved in the mining industry makes it vulnerable to ponder upon the volatility. The dip in the chinas growth
rate has made the key commodities like iron ore and coal to topple into the over-supply. Despite having weaker
commodity prices the government is vying for their own pie and cost escalations adding the worse to it.
Rather than cost reduction and process improvement plans the miners must embark on the sustainable business
environment. They might look forward to fully integrate the production and trading operations in order to generate rich
end value and better price controlling.

2. Minining industry challenges

1. Due vast geographical presence mining companys process are hampered by non-integrated
and disparate business systems.
2. Problem in consolidating processes and reducing the companys global shared service costs.
3. System landscape optimization and bringing all the applications on single platform.
4. Employees facing challenges in quickly sharing and retrieving up-to-the-minute information,
and ability to make timely decisions, while at the same time reducing costs.
5. Process complexity in incorporating mergers or acquisitions.
6. Increase in Commodity Values, Cost inflation , skill shortages
7. Resource nationalization and securing financing

3. Various Business Process involved in Ore

Processing

Pictorial representation of mining process.

Reference : http://assets.vale.com/ui/Documents/en/business/mining/iron-ore-pellets/carajas/index.html

(1) Mining- It all begins with the Site Survey and Geological Benchmarking, where several rounds of Chemical Tests
and QA Tests are performed to make sure ore grade is commercially viable.

(2) , (3) & (4) - Once the quality of the ore is assessed Drilling and Blasting is carried out followed by transporting the
ore lumps to the crushing site by using excavators and wheel loaders.
(5) & (6) Crushing and Screening: The large blocks of Ore are crushed into small lumps. The Crushing takes place in
multiple stages like Primary Crushing, Secondary Crushing and Tertiary Crushing. After each Crushing Process there
is Screening Process to separate the specific order from Non-specific Material and few additives like Binding Agents
and Cleaning Agents are mixed in the process. In the final Stage of Screening i.e. Pre-Loading stage the Ore lumps
are segregated according to their sizes.

(7) Large Conveyor Belts are used to move Crushed Ore from Screening Plants to the stockyard and stocks are
being segregated based on the lump size. And later they are transported to port stockyard for shipment.

(8), (9), (10) & (11) loading: The Reclaimer or bucket wheel excavator is used to transport the ore stacks to SILOS
and then they are unloaded into freight trains.

4. SAP Mining Solution

Mining Industry Business processes can have implementation challenges across all SAP Modules like SD, FI and
CO, HR, MM, Production Planning, Quality Management, Plant Maintenance and EHS.

The following business scenarios are mapped to SAP mining solution:

Module Functions/Concerns
With or without Contract

Export Sale Orders involving multiple currencies & sales

Sales & Distribution revenues accounted in local currencies
Handling Procurement of Explosives for Blasting
Operation

Handling Licensing/Government regulations

Material Management Tight integration with SAP EHS

Procurement cycle
Subcontracting Cycle, Import Purchase, Scrap Disposal

Issue of Tools and Explosives to Subcontract/Internal

Production
Pre-Crushing processes mapped to Mining Plant, Crushing
plants, Screening Plant and Loading Plant.
Batch Production
Usage of Batch Management with Batch Characteristics
Make-to-Order , Make-to-Stock
Planning with Final Assembly

MRP generate the PR or Production orders or Subcontract

Production Planning Requests
High transportation cost

Road transport could be EHS(Environment Health and

Shipping and Transportation Planning Safety)risk
Plan transportation, track orders, calculate transportation
charges
SAP TM ( Transport Management) Subcontracting and tendering transportation services
Master Data Material Master and BOM (multiple levels)
Quality Management Qualitative and Quantitative inspections
Plant Maintenance Health checkup of off-highway Equipment like Hydraulic
 Shovels, Dumpers, excavators etc

Preventive and breakdown maintenance for all

Equipments
Industrial Hygiene and Safety component

Creating risk assessments, recording and processing

accidents/minor injuries

Handling Standard Operating Procedures and Accident

Environment and Health Safety Reports

5. Business Benefits
1. Efficient Cost Management by accurate capture of production cost across operational
processes and production data.
2. Improved sales efficiencies by automatic price calculation and capturing metal exchange price
fluctuations.
3. Improved handling and consistent information right from the procurement to plant
maintenance.
4. Efficient management of Purchasing, commodity sales, and transportation
5. Increase in the profits with better asset performance &utilization
6. Better manage operational safety/risk, and compliance

6. References:
http://en.wikipedia.org/wiki/Iron_ore
http://www.steel.org/AM/Template.cfm?
Section=Articles3&TEMPLATE=/CM/ContentDisplay.cfm&CONTENTID=12309
http://mining-technology.blogspot.se/2009/05/iron-ore-operations-flowchart.html
http://www.sap.com/solution/industry/mining/solutions/lob/operations-asset-performance.html
http://assets.vale.com/ui/Documents/en/business/mining/iron-ore-pellets/carajas/index.html
http://www.sap.com/solution/industry/mining/solutions/software.html
http://www.deloitte.com/view/en_CA/ca/industries/energyandresources/mining/tracking-the-trends-
2014/index.htm
http://www.deloitte.com/view/en_CA/ca/industries/energyandresources/mining/tracking-the-trends-
2014/index.htm