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COMPANY PROFILE
How mining companies can reduce
the cost of purchasing equipment
and improve the quality at the
same time
Theo Brechmann
Chief Operating Officer of Technical Audit
company
January 2018–today
35 years of management experience
Experience as Design Engineer, Service
Manager, Sales Director and CEO
Twenty years as a Sales Director for CIS
countries at Eickhoff Bergbautechnik GmbH,
Germany (until January 2018)
Expert in longwall mining technologies
aving been a long time Sales Director of
the German company Eickhoff
Bergbautechnik, I have worked in Russia,
Belarus, Kazakhstan, and constantly
communicated with the top management of coal
companies in these countries. I have often
encountered a problem they described in making
decisions on key longwall equipment for
underground coal mining. It can be stated as
follows:
"How does one make the best choice of
equipment, so that it is not expensive, but at the
same time high-quality?”
The most expensive of all longwall equipment
for underground coal mining is the powered roof
supports and the armoured face conveyors –
they account for up to 90% of the cost of the
entire longwall system. Conducting a tender
(procurement bidding process) for the purchase
of this equipment is aimed at solving the problem
stated above. Let's look at the picture below to
understand the actions most equipment buyers take
to try to solve this problem.
H
8 International Mining | APRIL 2020
One way or another, buyers are trying to draw
a line of acceptable quality. After that, the prices
of those bidders who meet this quality are
considered. All that the buyers are trying to
accomplish is move this line of acceptable
quality, narrowing or expanding the list of
bidders under consideration.
The finance or supply departments try to
move this line to the left, and the technical or
production departments try to move it to the
right. Usually, the more the line goes to the right,
the higher the price. Of course, a quality product
for a long-term project is very good, but:
4 You do not really evaluate the quality of the
equipment you purchase, but instead the
quality of previous deliveries/references
4 As a rule, you pay the highest price during
the tender, effectively excluding cheaper
offers
Buyers have developed lots of tools to allow
bidders with cheaper offers to participate, but
unfortunately bigger doubts about quality arise
in the tender process. To resolve these doubts,
buyers have introduced:
4 Extended warranty obligations
4 Financial responsibility for the warranty
period
4 Bank guarantees for the warranty period, etc.
It is interesting that all these tools were
invented by buyers in order to stimulate
suppliers to ensure high quality, despite the fact
that these tools were not directly related to
quality.
A better solution here, in my opinion, is the
following: the buyers must increase their level
of knowledge about quality and learn how to
control it.
Let's take a closer look at what the quality of
the equipment consists of.
The quality of the equipment depends on the
following factors:
4 Quality of design
4 Quality of materials
4 Quality of manufacturing
How can the buyer control all these aspects?
One solution is the buyer can start
purchasing this quality control service from a
company that specialises in providing it.
Guided by this, I came to the idea of creating a
company that provides technical audit services for
longwall equipment from design to manufacture
for mining companies around the world.
Knowing the experts in the market, I selected
the leading specialists and at the beginning of
2018, the Technical Audit company was formed.
This included former Chief Designer of DBT,
Detlef Lettau, DBT Designer, Wilfred Weigel,
former Production Director of Eickhoff
Bergbautechnik, Heinz Tenberge, as well as a
group of certified specialists who perform non-
destructive testing in accordance with
international standards used for the
manufacture of powered roof supports and
armoured face conveyors.
The subject of our first order in 2018 was an
audit of the production of a longwall system for
the Denisovskaya mine, owned by Russian coal
company KOLMAR.
The results were very impressive – the audit
revealed many bottlenecks and areas for
improving the quality of equipment during its
manufacture. But, most important, the results of
the audit clearly convinced the buyer of the
highly added value: for 1-2% of the cost of
equipment (the approximate cost of the audit),
the buyer received high-quality equipment. The
second positive was the increase in the quality
of production from the manufacturers, which the
manufacturers greatly appreciated and
benefitted from.
After such a clear positive result, we received
our next orders: for the audit of the longwall
system at Russian coal company Sibirskaya’s
Uvalnaya mine, the audit of powered roof
supports for Polish coal company LW Bogdanka,
and a second longwall system audit for KOLMAR
at its Inaglinskaya mine.
After the successful execution of our first
projects, in early 2019, we were approached by
the Raspadskaya coal company – Russia's
largest coking coal producer with more than 20
Mt/y of output. Raspadskaya is a part of the
large mining and metallurgical holding company
EVRAZ (www.evraz.com/en/company/assets/
novokuznetsk-site/#novokuznetsk).
Raspadskaya shared its thoughts with us
concerning the purchase of the most expensive
longwall equipment - powered roof supports.
The company had launched a tender process to
select a supplier of the powered roof supports
for its Uskovskaya mine. And, at this point, it
had two rather unattractive options: either buy
powered roof supports from top global
manufacturers at a fairly high price, or save