Renting capital equipment in African mining industry grows

Paul Boughton

Africa represents one of world’s richest mining epicentres, with mines on the continent harvesting more than 60 different types of raw minerals to power the world’s industries. But mine operators in Africa face many of the same issues as other mines around the world.

As pressures continue to build on the mining industry, mine operators are pressed to identify solutions that maintain, or even, improve their bottom line. Some of the solutions are complicated … some are relatively easy.  Many mines around the world, including Africa, are looking at their equipment and focusing on maximizing efficiency and productivity to get more with less.   

With a price tag that can exceed $500,000, reliable, high-end industrial pumps, such as the Weir Minerals Warman 750 MCR at ca. 60 tonnes, represent a capital investment for mining operations.  While the equipment is necessary for efficient mine operations, the investment is sometimes hard to recoup when a pump sits idle for months, waiting for a call to action.  Especially when mine operations are faced with shrinking capital budgets and are expected to produce more with less.

As a result, mine operators in Africa are turning to rental agreements from companies like Weir Minerals for essential, yet high cost, equipment that is primarily reserved for emergency duty, like a pump.  

The rental process

The rental process with Weir Minerals typically starts with a visit from a Weir Minerals Rental field expert to conduct a site assessment to match equipment to site needs.  Following a signed rental agreement that specifies type of equipment, length of rental and maintenance schedule, the equipment is delivered and installed by Weir Minerals, most times in a matter of hours.  

During the duration of the rental agreement, Weir Minerals representatives will perform maintenance as needed to ensure the equipment is ready when called into action. Upon completion of the equipment, Weir Minerals photographs and removes the equipment where it is inspected, serviced and stored in inventory for future business.  

A company with a broad product portfolio like Weir Minerals is in a strong position to develop individual solutions for mine operators to fit specific situations.  Mine operators can also structure agreements to include additional equipment such as lighting units, floatation units, pipes, lay flat hoses, etc. Some agreements can even be structured to include labour.  In some cases, the rental agreements could include equipment not currently manufactured by Weir Minerals that extends beyond submersible and diesel driven self-priming pumps.  

Typical agreements are for a minimum of a week and can be renewed on a weekly basis. Depending upon needs, mine operators can also sign agreements for longer periods of time.  For example, Weir Minerals structured a rental agreement with a mine in South Africa which called for company to provide submersible pumps and maintenance for a year. The agreement helped reduce maintenance costs at the mine by more than one million Rand.

Benefits of a rental agreement

According to company experts, rental agreements are ideal for any mining or industrial operation that has capital expenditure restraints and experiences random and infrequent emergency situations, like a flood.

When evaluating the benefits of renting capital equipment, many look at the:

* The impact on a capital budget.
* The urgency of the equipment need.
* Equipment maintenance.
* Safety and production.

One of the biggest advantages of renting large, capital equipment is that it’s ideal for expensive equipment that is not used on a consistent basis. Mine operations are faced with shrinking capital budgets and are expected to produce more with less.  

As pressures continue to build on the mining industry, mine operators are pressed to identify solutions that maintain, or even, improve their bottom line. Rental agreements can provide relief.

The reality is that a capital equipment purchase can take months. Many companies require multiple quotes, a price is negotiated, and service agreements are discussed.  Sometimes, time is a luxury, but not in an emergency situation where equipment is needed that day and unless the mine has equipment housed in storage, the purchase process begins.    

Another advantage of rental agreements is that preventative maintenance is generally included, which provides assurance that the equipment will function as designed when needed.

There is often a safety and production confidence factor as well for many mine operators. In an emergency scenario, a mine operator rushes out pump equipment that has typically sat in storage and has been dormant since the last emergency, which might have been months ago.  Unfortunately, most mine operators don’t touch the equipment either once a pump is put in storage.  

And, fingers are crossed with the expectation that the equipment will work as expected when it is pulled out of the closet for the next job. While it’s an ideal time to check and clean the equipment before placing in storage until the next emergency, it generally isn’t a practice followed.  Unfortunately, this is when equipment fails to meet expectations.  

Growing demand for rental equipment

Response to the rental program has been very positive from mine operators in Africa. Given the benefits to mine operators, Weir Minerals expects the rental market to grow by nearly 40 per cent by the year 2016, with the only limiting factor product availability. The company also expects to see growth in other regions of the world.  

Weir Minerals has personnel in mining operations around the world on a daily basis rolling up their sleeves and working on equipment, talking with mine operators and learning about the pressures they face. Listening to the market and mine operators helps focus Weir on innovations that help improve efficiency and improve productivity with the end result of improving the bottom line.

Weir Minerals has found the rental programme a great compliment to new equipment sales as well. For many mine operators, the rental program offers an opportunity to validate equipment before investing in a capital purchase.  In addition, mine operators also get a taste of the Weir Minerals customer commitment. Typically high stress situations with quick turnaround, the rental programme reinforce the Weir Minerals commitment to its customers.