Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Life Cycle Services provides more than just products to its customers – it provides long-term outcomes, says Giuseppe Campanelli, Vice President of Life Cycle Services at Metso Minerals Services.
Campanelli, who spoke to MINING.com in July at the Metso office in Montreal, says LCS’s ultimate goal is to lower costs, maintain parts availability and improve output.
“Metso has been providing quality services and spares and wares products to our customers for a long time,” says Campanelli.
“Metso wanted to find a channel through which we can provide those services to our customers in a more comprehensive manner, tied to a longer-term base. We also wanted to link the delivery of those components to the customer with their outcomes.
“Basically, not just provide spares and wares to the customer, but provide tangible things such as availability, improved output, lowest net working capital, and things like that.”
Transcript of MINING.com’s interview with Giuseppe Campanelli is edited for clarity.
MINING.com: Who are you?
Giuseppe Campanelli: I am Giuseppe Campanelli, Vice President of Life Cycle Services at Metso Minerals Services.
MINING.com: What is Metso?
Giuseppe Campanelli: Metso is a provider of services and technology to flow control and minerals customers.
MINING.com: What is Life Cycle Services?
Giuseppe Campanelli: Life Cycle Services is a delivery channel of Metso Services. We provide solutions which include supplying various Metso Services products over a long period of time, and packaging those solutions with commercial offerings that tie what we are supplying to our customers’ outcomes.
MINING.com: Can you give me an example of clients using Life Cycle Services?
Giuseppe Campanelli: One example of where we provide a client with Life Cycle Services is in South Africa. The customer, an iron ore supplier, contracted us to provide maintenance services to his crushing plant. In terms of the contract we provide maintenance services, spares and wares. However, we are compensated based on outcomes that we achieve. The principal outcome being improvement of the lump-to-fine ratio. Also, we are measured on the availability of the plant at the lowest sustainable cost.
MINING.com: How was Life Cycle Services originally conceived?
Giuseppe Campanelli: Metso has been providing quality services and spares and wares products to our customers for a long time. Metso wanted to find a channel through which we can provide those services to our customers in a more comprehensive manner, tied to a longer-term base. We also wanted to link the delivery of those components to the customer with their outcomes. Basically, not just provide spares and wares to the customer, but provide tangible things such as availability, improved output, lowest net working capital, and things like that.
MINING.com: How has the service evolved?
Giuseppe Campanelli: I would say the biggest evolution in our services offering is the addition of the commercial packaging that allows us to take on the customers’ risk in what we are providing to them. Rather than just providing services to them, we are providing them with outcomes, which is more important to them than just acquiring services from us.
Metso Minerals Life Cycle Services commercial packaging allows them to take on their customers’ risk in what they are providing to them. Photo credit Metso Life Cycle Services.
MINING.com: If a company is interested, how do you perform a needs assessment?
Giuseppe Campanelli Most of our LCS contracts evolve from existing services that we are providing to our customers. They are already receiving these services from us, and therefore they are ready to take the product to a different level. We already have an idea of what our customer’s needs are, and we tailor the product to match their needs. For those customers where we don’t have much information about what they are doing, we have a product – or we are trying to launch a product – called Plant Evaluation. Basically, we go to the customer’s site with several professionals – be it process or mechanical professionals – and we assess the site from the mine to the benefication plant. We try to understand their operations, their maintenance practices, their inventory levels, and so forth. As a result we come up with some recommendations for them, and we identify areas where we can help them and possibly add value to what they are doing.
MINING.com: What is the typical work like?
Giuseppe Campanelli: The work is very challenging. Our customers are under a lot of pressure to get the best product at the best quality and the highest availability. We feel a lot of that pressure because what we are providing is linked to what their outcomes are; but I think we have the knowledge, the people, and the solutions to help them get through it.
Metso is a MINING.com advertiser.
