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.
Kumba Iron Ore’s Sishen mine took delivery of six brand new locomotives on Thursday 31 October 2013. These state-of-the-art locomotives are manufactured by international conglomerate, General Electric (GE).
The distribution team at Sishen with Tim Schweiker, President and CEO of General Electric South Africa and Kumba Iron Ore CEO Norman Mbazima at the new General Electric locomotives – the proud new property of Sishen mine.
Locomotives started running at Sishen mine in 1978 and current ones exceeded their operating time by almost seven years. Therefore new locomotives were critically needed because it was hard to find parts and current technology did not work on existing locomotives. Maintenance costs also started to increase because these older technologies had to be replaced and sourced from all over the world.
Further, Sishen mine requires ten locomotives (five pairs) to maintain successful dispatches of iron ore. Previously, the mine only owned four GE locomotives for loading in pairs. The additional four locomotives had to be rented from Transnet for loading in pairs at R13 700 per locomotive per day to meet dispatching targets. Each time a locomotive broke down loading pairs had to be split up in order to compensate for the defective locomotive.
The new C30-ACi GE locomotives will make it possible to deliver on production performance levels at Sishen Mine. Where two locomotives were needed previously to load a train of 114 wagons, only one of the new GE locomotives can do so. The new locomotives will therefore also save costs for Sishen mine because it will not be necessary to hire locomotives to meet capacity anymore.
This project is a significant milestone because Sishen mine will not replace these locomotives again in the current life of mine, as they have a lifespan of 35 years. The new locomotives are configured for Sishen Mine’s loading conditions and were commissioned and tested without any problems.
Tim Schweiker, president and CEO of General Electric South Africa, handed the key for the first locomotive to Kumba Iron Ore CEO, Norman Mbazima, saying, “General Electric is grateful for the opportunity to have Sishen mine as a customer. We are impressed by the magnitude of the operations and that this mine again put their trust in GE to provide the locomotives.”
Accepting the delivery of the locomotives, Mbazima said: “Kumba Iron Ore showed extremely rapid growth in the past five years. We can only sustain this growth by using equipment that not only meets this growth but allows us to focus on safe production at Sishen mine.”
