HIGH PROFILE
Fuelling efficiency
in mining
As part of this month’s Fuels and Oils focus Paul Moore
talked with Global Fuels Product Manager of Shell
Commercial Fuels, Elitza Terzova, about how fuels majors
work with miners; and the value add of using premium
fuels in mining operations
Q How does your role relate to mining within Shell
in responsibility terms?
A My responsibility includes our fuels product
development for heavy-duty operations, that
covers both the on-road and off-highway sectors.
This includes advanced fuel formulations with
modern deposit control additives for use in key
industries including mining and building around
these the customer proposition that goes out to
our markets globally. In mining specifically, we also
have Shell Commercial Fuels teams in our core
geographical markets who work closely with mining
customers and often I work with those teams to
come up with integrated solutions for mining
companies covering both fuels and lubricants where
possible, but it depends on the nature of the mining
operation and the customer needs.
Q For a global Tier One miner with multiple
operations, are they buying fuels centrally
through Shell for use across their business or is it
done on a mine by mine basis?
A The reliability and the frequency of supply,
including to remote locations, is a top priority for
these companies. Typically big mining companies
will delegate fuel buying responsibility to their
country representatives because when it comes to
fuel in mining what matters most is to have the
fuel when and where you need it, and at the right
quality. These are all ‘local’ capabilities when
talking about fuel, and by local, I mean at a
national level, as
opposed to global
capabilities. Of course,
we do often have global
conversations with
Global Fuels Product
Manager of Shell
Commercial Fuels,
Elitza Terzova
mining companies in terms of strategy with regard
to fuels especially if we are already talking to
them at that level about lubricants and oils, with
details worked out locally. Fuel will come into the
country on a bulk basis to storage points and then
distributed across numerous industry sectors.
Supply to mines can be on a weekly or monthly
basis. Large territories like Canada represent real
supply challenges so the viability of the in-country
fuel supplier is crucial. The supply and
distribution set up for fuels and lubricants is quite
different – even if just from a scale point of view.
Shipping lubricants can be easier, mainly in drums
or packs. Fuel is shipped in tankers around the
world in billions of litres and is often regarded as
more of a bulk commodity.
Q Have you been successful in combining fuel and
lubricant sales packages in mining?
A Yes, we do have customers for both, for
example, with coal mining groups in Malaysia, the
Philippines and South Africa. It is not
straightforward to set up but it is something we
offer and we continue to explore these
opportunities depending on where the operations
are, what their requirements are and how feasible
it will be to meet these based on the practical
nature of the two products. The other point to
make is that fuels account for a very large
proportion of a mine’s running costs – it can be up
to 30% – therefore it gets a lot of attention from
procurement departments at a senior level where
it is regarded more as a bulk commodity.
Lubricants are seen as a more technical product
so it is largely the maintenance managers who
have the final say as it is perceived that the
lubricant choice is a more sophisticated one
related to performance of particular engine types
for particular makes and models of mining
equipment.
DYNAFLEX Technology in Shell premium diesel
is formulated with powerful cleaning molecules
designed to prevent and remove performancerobbing
engine deposits
Q Will mines typically commit to one fuel supplier
for a long-term contract or is it bought on a spot
basis?
A It really depends on the mine’s procurement
strategy – if it is centralised or decentralised – and
what portion of the running costs is fuel, therefore
it is likely to be reviewed on a regular and at least
on an annual basis. Some will adopt a strategy of
more frequent tenders, even buying on a no
contractual relationship in a spot market type of
approach and as such would be issuing requests
to suppliers on a very regular basis. We at Shell
offer mines both term contracts and spot
contracts. Spot supplies can be more unreliable
given the security of supply mines need but if the
mining company has a good fuel management
regime which allows them to plan in advance and
anticipate in good time when the next fuel
delivery will be needed, then it can work. Fuel
management can be improved using data
analytics and digitalisation so miners can harness
data on fuel consumption and stock depletion. At
Shell we offer an Electronic Vendor Managed
Inventory solution where customers no longer
need to worry about when they need to replenish
stocks. You would assume that it would be normal
for all operations to monitor in detail fuel levels
but it does happen that mines can run out of fuel
so if they rely on spot buying then this is more of
a risk; and being without fuel even for a day is a
massive productivity hit to a mine.
Q So if fuel is seen as a commodity, how do you
convince miners of the value added nature of
premium fuels?
A The misconception of assuming all fuels are the
same is often related to the nature of fuel
procurement – mine procurement departments,
for example, may not be aware of the full
implications of the fuel cost on, for example, the
total cost of ownership and the efficiency of their
operations. When we start conversations with
maintenance or operations managers, they are
more aware of the difference between nonadditivated
fuel and additivated fuel and the
benefits that addiviated fuels can bring that
usually outweigh a higher initial cost. There are
many Shell and non-Shell studies and reports that
highlight the role of injector cleanliness, for
example. It is a fact that over time, carbon
deposits build up on engine injectors and this can
compromise the combustion process, the
efficiency of the injection system and therefore
the overall efficiency of the engine and the mining
machine. But these implications are often not
communicated to or understood by procurement
teams. They will then just look at the higher initial
90 International Mining | JULY/AUGUST 2020