Life Cycle Applications in the Mining Industry

Improving Environmental Performance in theMinerals Supply Chain Using a Life-CycleApproach: The Role of Fuel and LubricantSuppliers in Enabling SustainableDevelopment

Turlough F. Guerin

Abstract Suppliers have a pivotal role in enabling the mining and minerals indus-try to achieve their goals for sustainable development and demonstrating corporateresponsibility. Reputable suppliers know their products and services and the indus-try, and are often well placed to have unique knowledge of these in relation to theircustomers’ business needs. A survey of professionals from the mining and miner-als industry was conducted, revealing factors limiting the influence of suppliers on amining company’s move toward sustainable development and specifically their envi-ronmental performance. Factors that affect a mining company’s ability to engagewith suppliers and the reasons why these companies believe suppliers are importantto the achievement of their goals for sustainable development are also identified anddiscussed. This aspect of sustainable development in the mining and minerals indus-try has not been studied extensively. Petroleum hydrocarbon suppliers, in particular,affect a mine’s goals for sustainable development because of the extensive reach ofpetroleum hydrocarbon products into the mining and minerals product life-cycle,their impact on operational efficiencies, cost, and mine viability, and their poten-tial for leaving negative environmental as well as safety legacies. The petroleumhydrocarbon life-cycle is a framework that enables structured engagement betweensupplier and customer on a range of sustainable development issues because it isan example of an input into the mining industry that affects the entire mining andminerals processing value chain. The life-cycle starts with supply of fuels, lubri-cants, speciality chemicals, and services to the mine, through plant operation andmaintenance, transport of mined products, and ship loading, and finally to mineralprocessing and other downstream value-adding. Eco-efficiency opportunities in thislife-cycle are the main focus of this chapter. There are barriers within the miningindustry to leveraging suppliers’ capabilities which have to be overcome before theindustry will realise the full benefits from such supplier engagement.

T.F. Guerin (B)Telstra Corporation Limited, Melbourne 3000, Australiae-mail: [email protected]

The views presented in this chapter are those of the author and do not necessarily reflect those ofhis employer, Telstra Corporation Limited.

205J.P. Richards (ed.), Mining, Society, and a Sustainable World,DOI 10.1007/978-3-642-01103-0_9, C© Springer-Verlag Berlin Heidelberg 2009

206 T.F. Guerin

1 Introduction

As companies compete for market share, they are increasingly focussing on theircore competencies to become customer-centric. This involves, among many otherelements of a business transformation, reducing costs, which inevitably involveslooking to the supply chain to increase efficiencies and enhance the value created.Companies in all sectors of industry are increasingly being required by their stake-holder groups to state where their raw materials are coming from, and take actionover and above this recognition and disclosure, to influence the supply chain toimprove business as well as environmental performance.

Strategic supply chain management has been recognised in the business andmanagement literature for many years as a critical element of any business plan-ning process. However, it is only in the past two decades that environmental per-formance has been recognised to be of strategic importance in the supply chain(Lloyd 1994; Mehta 1994; Fiksel 1995; Lamming and Hampson 1996; Anonymous1997, 1999; Tyler 1997; Christensen 2002; Hagelaar et al. 2004; Lutz 2005).Retailers and manufacturers, particularly in the automotive and electronics indus-tries, have been leading progress in the greening of supply chains (Lammingand Hampson 1996; Anonymous 1997, 1999; Eskew 1999; Christensen 2002;Lutz 2005; Rao and Holt 2005; Barton 2006; Ellinor 2007; Ryu and Eyuboglu2007; Simpson et al. 2007). Business’s awareness of cleaner production (or eco-efficiency) and its uptake has helped drive this change (Altham and Guerin 2005).However, there are fewer published studies that explicitly describe the role ofsuppliers to the mining and minerals processing industry in greening its supplychain (Robinson et al. 1995; Enever and Robertson 1998; Guerin et al. 2004;Guerin 2006a, b).

Globally, sustainable development principles relevant to the mining industrywere adopted by the International Council for Mining and Metallurgy (ICMM)in May 2003. ICMM member companies, which include the world’s largest min-ing and minerals processing companies, have pledged to report on their progressin implementing these principles and these are being adopted internationally.In Australia, the Minerals Council of Australia (MCA) has developed a frame-work for sustainable development for member companies, which is based onthese principles. The MCA’s framework, which is called Enduring Value, wasreleased in October 2004. This framework recognises the role that suppliers playin the transition of mining companies to a sustainable future (Anonymous 2008;Tables 1 and 2).

Two of the elements of this framework focus explicitly on how mining and miner-als processing companies who commit to the framework (referred to as Signatories)are to work with suppliers.

A survey of the international mining industry (Lane and Danielson 2001), thoughseveral years old, recognised that sustainable development, in the context of mining,included the following:

Environmental Performance in the Minerals Supply Chain 207

Table 1 International guiding principles of sustainable development in the mining and mineralsprocessing industry directly relevant to the supply chain

Organisation Principles and/or signatory commitments Source

The InternationalCouncil on Miningand Minerals(ICMM)

ICMM has developed and published ten principlesin relation to sustainable development in themining and minerals processing industry. Thefollowing sub-set of seven principles haverelevance to improving environmentalperformance in the supply chain:

• Implement/maintain ethical business practicesand sound systems of corporate governance.

• Integrate sustainable development considerationswithin the corporate decision-making process.

• Implement risk management strategies based onvalid data and sound science.

• Seek continual improvement of environmentalperformance.

• Facilitate/encourage responsible product design,use, reuse, recycling, and disposal of products.

• Contribute to the social, economic, andinstitutional development of the communities inwhich the industry operates.

• Implement effective and transparentengagement, communication, and independentlyverified reporting arrangements withstakeholders.

www.icmm.com

The Global MiningInitiative (GMI)

The GMI has set out the following principles fromthe Mining Minerals and SustainableDevelopment (MMSD) study:

• Minimise waste and environmental damagealong the whole of the supply chain.

• Ensure transparency through providing allstakeholders with access to relevant and accurateinformation.

www.iied.org

• Impact on lives of people in the local communities in which mining communitiesoperate;

• Interaction and consultation with local communities, particularly regarding theeconomic and social impacts of mining;

• Impacts on the environment where mining occurs.

The same survey demonstrated a general trend that there was a widening of anorganisation’s perceived area of responsibility in relation to sustainable develop-ment. The survey also showed that the mining and minerals processing industryhas seen the emergence of many specialist contractors, for example in areas suchas earth moving and maintenance, and that it is normal that business-critical activ-ities are being outsourced. It indicated that while mining and minerals processing

208 T.F. Guerin

Tabl

e2

The

Aus

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ian

adap

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proc

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eral

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End

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gan

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proc

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ies,

whe

reve

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also

appl

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the

rele

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activ

ities

ofco

ntra

ctor

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gage

dby

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toun

dert

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such

activ

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addi

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ress

ive

impl

emen

tatio

nof

the

Inte

rnat

iona

lCou

ncil

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inin

gan

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etal

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CM

M)

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esan

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lem

ents

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icre

port

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tele

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imum

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with

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rtin

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etri

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ted

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balR

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ting

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ativ

e(G

RI)

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inin

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ent,

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alor

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enta

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riat

e).

Min

eral

sC

ounc

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Aus

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ia(M

CA

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ndur

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ork—

Impl

emen

tatio

ngu

idan

cefo

rE

lem

ent2

.4

Ele

men

t2.4

:“E

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rage

cust

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rtne

rsan

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san

dse

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esto

adop

tpri

ncip

les

and

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tices

that

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para

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n.”

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plem

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urem

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yth

atin

clud

essu

stai

nabl

ede

velo

pmen

tper

form

ance

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ntra

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esu

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and

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uppl

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ploy

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loca

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nom

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Tabl

e2

(con

tinue

d)

Min

eral

sC

ounc

ilof

Aus

tral

ia(M

CA

)E

ndur

ing

Val

uefr

amew

ork—

Impl

emen

tatio

ngu

idan

cefo

rE

lem

ent5

.1

Ele

men

t5.1

:“Im

plem

enta

man

agem

ents

yste

mfo

cuse

don

cont

inua

lim

prov

emen

tof

alla

spec

tsof

oper

atio

nsth

atco

uld

have

asi

gnifi

cant

impa

cton

the

heal

than

dsa

fety

ofou

row

nem

ploy

ees,

thos

eof

cont

ract

ors

and

com

mun

ities

whe

rew

eop

erat

e.”

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plem

enta

noc

cupa

tiona

land

com

mun

ityhe

alth

man

agem

ents

yste

mco

nsis

tent

with

reco

gnis

edqu

ality

stan

dard

sth

atin

clud

es:

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ontr

olof

haza

rds/

risk

sof

activ

ities

,pro

duct

s,an

dse

rvic

esov

erw

hich

the

orga

nisa

tion

has

cont

rol,

incl

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gth

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tiviti

es,p

rodu

cts,

and

serv

ices

ofco

ntra

ctor

san

dsu

pplie

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entifi

edm

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uctu

res,

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onsi

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ies,

reso

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aini

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war

enes

s,an

dco

mpe

tenc

ies;

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com

mun

icat

ion

syst

emth

atin

clud

esem

ploy

ees

and

othe

rin

tere

sted

part

ies,

and

prov

ides

for

the

rele

vant

and

timel

yre

port

ing

ofpe

rfor

man

ce;

•In

volv

eem

ploy

ees

and

othe

rre

leva

ntst

akeh

olde

rsin

audi

ting

man

agem

ents

yste

ms

and

inm

anag

emen

trev

iew

s.M

iner

als

Cou

ncil

ofA

ustr

alia

(MC

A)

End

urin

gV

alue

fram

ewor

k—Im

plem

enta

tion

guid

ance

for

Ele

men

t8.2

Ele

men

t8.2

:“C

ondu

ctor

supp

ortr

esea

rch

and

inno

vatio

nth

atpr

omot

esth

eus

eof

prod

ucts

and

tech

nolo

gies

that

are

safe

and

effic

ient

inth

eir

use

ofen

ergy

,nat

ural

reso

urce

san

dot

her

mat

eria

ls.”

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here

appr

opri

ate

supp

ortr

esea

rch

toim

prov

eec

o-ef

ficie

ncy

ofpr

oduc

tion

proc

esse

san

dpr

oduc

ts;

•R

evie

wan

din

nova

teto

redu

cew

aste

thro

ugh

clea

ner

prod

uctio

npr

oces

ses

recy

clin

gan

dre

use

ofm

ater

ials

;•

Rev

iew

usag

ean

din

nova

teto

impr

ove

effic

ienc

yin

the

use

ofen

ergy

and

wat

er;

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keot

her

user

s’pr

esen

tand

futu

rere

quir

emen

tsin

toac

coun

t,in

clud

ing

air

and

wat

erqu

ality

and

envi

ronm

enta

lflo

ws

ofw

ater

;•

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lve

supp

liers

inid

entif

ying

oppo

rtun

ities

tore

duce

ener

gyco

nsum

ptio

nor

use

rene

wab

leso

urce

sto

redu

cepr

oduc

tion

ofgr

eenh

ouse

gase

san

dot

her

emis

sion

s;•

Whe

refe

asib

le,c

olla

bora

tein

indu

stri

alec

olog

yac

tiviti

esto

deve

lop

syne

rgie

sin

reso

urce

usag

e.

aT

hese

wer

eob

tain

edfr

omth

eE

ndur

ing

Val

uefr

amew

ork

docu

men

tsav

aila

ble

atw

ww

.min

eral

s.or

g.au

210 T.F. Guerin

companies have experience in dealing with contractors, they are not familiar withusing their influence over suppliers. Of the 32 companies surveyed, 78 and 59%required specific environmental standards to be met by contractors and suppliers,respectively. Respondents exhibited a strong interest in ensuring that local suppli-ers are used in their operations, and 90% of respondents stated that engaging withstakeholders effectively was one of the top five economic issues of concern to theircompany (Lane and Danielson 2001).

1.1 A Definition of Sustainable Development

A challenge for mining companies is defining what sustainable development meansat an operational level (Azapagic 2004; Guerin et al. 2004). This includes theextent to which the minerals value chain is included within the scope of a min-ing and minerals processing business, and therefore to what extent suppliers are“within scope”. There are many stakeholders for any one mining operation, andalso numerous approaches available to a mining operation for assessing the impactof suppliers, one of their major stakeholder groups. In the context of this chapter,sustainable development is defined in relation to the wider business impacts of min-ing within the mining and minerals processing supply chain. Sustainable develop-ment, should, by its implication, encompass impacts throughout the supply chainboth from a product as well as an input perspective. As referred to in the previ-ous section, this has not been extensively studied in the literature. An explanationfor this is the emphasis on the direct impacts of the mining industry, which arematerial in and of itself, even without considering the wider supply chain impacts.As the triple bottom line performance of mining and minerals processing compa-nies improves, it could be expected that there will be a refocus of attention onthe inputs into the industry. This chapter focuses on this input side of the supplychain.

The working definition of sustainable development in this chapter is framed inthe concept of stewardship. It is implementing the industry’s commitment to takingdirect responsibility for its production, including inputs and processes, and a sharedresponsibility with customers, suppliers, and end users to ensure that all outputs areproduced, consumed, and disposed of in an environmentally and socially responsi-ble way.

1.2 Suppliers’ Role in Supporting Sustainable Development in theMinerals Industry

Suppliers have traditionally been viewed as integral to the normal operation ofmining companies (Enever and Robertson 1998). With the advent of heightenedstakeholder awareness of environmental and social impacts of a mine, the role ofsuppliers is coming into sharper focus as an important contributor to both a mine’s


liability and opportunity for contributing to sustainable development. There are sev-eral specific drivers emerging both from within and external to the mining industry,which are influencing suppliers to recognise and embrace their role in assisting theminerals industry to work towards sustainable development (Enever and Robertson1998; Blowfield 2000; Halme et al. 2007). These include:

• Formal recognition by the industry of a supplier’s role in assisting mining com-panies in working towards sustainable development (e.g., ICMM Principles, andMCA Framework for Sustainable Development; Tables 1 and 2);

• Enhanced recognition by the industry that extended producer responsibilityapplies to products supplied to industry as raw materials, as well as the mineralproducts purchased as a result of mining (i.e., product stewardship);

• The business need for suppliers themselves to be more competitive. This isdriving product and service differentiation in the mining industry marketplacethrough social, environmental, and financial performance;

• Recognition by responsible corporations, including both suppliers and miningcompanies, that their activities, products, and services interact with and affect thebroader environment and the communities in which they do business; and

• The business needs of the mining industry to identify materially important eco-efficiency gains across their business, and their recognition that suppliers can helpdrive these types of improvements.

There are two main mechanisms by which suppliers can affect a mining cus-tomer’s operations. These are through indirect or direct supply-chain leverage,which was highlighted in a presentation made to the forestry and timber industryin Australia (Guerin et al. 2003), but which is equally applicable to any industry.Indirect mechanisms include engaging with industry groups (common to supplierand customer) to assist in moving the entire industry forward, such as by devel-opment of industry and professional standards, frameworks, or codes of practise,and direct mechanisms through the supplier’s unique understanding of their productand/or service, their life-cycle, and nature of risks and opportunities in relation totheir customer’s business.

There are numerous suppliers for any mining company or mining operation.These include product, service, and people suppliers covering every aspect of theminerals value chain. Table 3 provides examples of generic supplier groups, suppli-ers active in the industry, and the types of products and services they can provide.It also provides a description of the niche leverage that each supplier grouping canexert in support of their mining customer’s sustainable development performance.This paper addresses these direct mechanisms.

1.3 Purpose and Scope

This chapter describes ways in which suppliers to the mining and minerals process-ing industry can support its move towards sustainable development. It also describes

212 T.F. Guerin

Tabl

e3

Rol

eof

supp

liers

inin

fluen

cing

envi

ronm

enta

lper

form

ance

ofth

em

inin

gva

lue

chai

n

Supp

lier’

sin

dust

rySe

rvic

esor

prod

uctp

rovi

ded

Nic

heva

lue-

add

tocu

stom

erE

xam

ple

ofsu

pplie

ra

Ele

ctri

city

supp

lier

Ele

ctri

city

(and

com

mon

lyna

tura

lga

s)su

pply

Prov

ide

carb

onof

fset

prog

ram

sfo

rcu

stom

ers;

rene

wab

leen

ergy

offe

ring

sO

rigi

nE

nerg

y;A

GL

(in

Aus

tral

ia)

Exp

losi

ves

Exp

losi

ves

and

rela

ted

serv

ices

Tech

nolo

gies

toin

crea

sebl

aste

ffici

ency

and

redu

ceen

viro

nmen

tali

mpa

cts;

prov

ide

expe

rtis

ein

enga

ging

with

and

man

agin

gne

ighb

our

rela

tions

hip

Ori

ca,A

kzo

Nob

el

Faci

lity

man

ager

sB

uild

ing

and

faci

lity

man

agem

ent

Iden

tify

and

inco

rpor

ate

envi

ronm

ent-

rela

ted

key

perf

orm

ance

indi

cato

rsin

tom

inin

gco

ntra

cts;

iden

tify

and

driv

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itiat

ives

tore

duce

wat

eran

den

ergy

use

Tra

nsfie

ld,S

potle

ssan

dU

nite

dG

roup

Serv

ices

(UG

S)(a

llop

erat

ing

inA

ustr

alia

)

Fuel

supp

lier

Fuel

supp

ly,d

istr

ibut

ion,

and

rela

ted

serv

ices

Prov

ide

biof

uels

,car

bon-

offs

etfu

els,

and

low

part

icul

ate/

low

emis

sion

sfu

els;

advi

ceon

fuel

effic

ient

driv

ing

Shel

l,B

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Mob

il,C

alte

x

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our

hire

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pora

ryst

aff

hire

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Prov

idin

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aff

with

envi

ronm

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ms

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fSk

illed

Gro

up(A

ustr

alia

);lo

cal

indi

geno

usla

bour

hire

rs,

Ade

cco,

Exa

lt


Tabl

e3

(con

tinue

d)

Supp

lier’

sin

dust

rySe

rvic

esor

prod

uctp

rovi

ded

Nic

heva

lue-

add

tocu

stom

erE

xam

ple

ofsu

pplie

ra

Lub

rica

ntsu

pplie

rL

ubri

cant

supp

ly,d

istr

ibut

ion,

and

rela

ted

serv

ices

Bio

degr

adab

lelu

bric

ants

alte

rnat

ives

;adv

ice

and

serv

ices

onlu

bric

antl

ife

exte

nsio

n;lif

ecy

cle

man

agem

ento

flu

bric

ants

Fuch

s,Sh

ell,

Cas

trol

Min

ing

cont

ract

ors

Min

ing

oper

atio

nsse

rvic

esId

entif

yan

din

corp

orat

een

viro

nmen

t-re

late

dke

ype

rfor

man

cein

dica

tors

into

min

ing

cont

ract

sR

oche

Bro

s.M

inin

g(A

ustr

alia

),K

aipa

ra(N

ewZ

eala

nd)

Tele

com

mun

icat

ions

Voi

ce,d

ata,

inte

rnet

acce

ss,

dedi

cate

dne

twor

ksfo

rm

inin

gop

erat

ions

Tra

vels

ubst

itutio

nsu

chas

high

defin

ition

vide

oco

nfer

enci

ng;t

elem

etry

solu

tions

for

rem

ote

real

-tim

em

onito

ring

Tels

tra,

Bel

lCan

ada,

Vod

apho

ne,

Ver

izon

Was

tem

anag

emen

tco

ntra

ctor

sTo

talw

aste

man

agem

ents

ervi

ces

Iden

tify

and

inco

rpor

ate

envi

ronm

ent-

rela

ted

key

perf

orm

ance

indi

cato

rsin

tom

inin

gco

ntra

cts;

advi

ceto

min

eon

was

tepr

even

tion

stra

tegi

es;

impl

emen

tand

driv

ew

aste

redu

ctio

nin

itiat

ives

acro

ssth

em

ine

Thi

ess;

Veo

lia;T

rans

paci

ficIn

dust

ries

(Asi

aPa

cific

regi

on)

aPr

ovis

ion

ofa

supp

lier’

sna

me

does

noti

mpl

yth

atth

eypr

ovid

eth

eni

che

valu

e-ad

ded

serv

ices

,or

that

itis

bein

gen

dors

edby

the

auth

or.

214 T.F. Guerin

the perceived barriers within mining companies to harnessing the opportunitiespresented by their suppliers, and how these barriers may be overcome. The chapterhas been prepared to help mine personnel and procurement and operations managersto leverage greater value from a mine’s relationship with its suppliers, particularlythose supplying petroleum hydrocarbons (fuels and lubricants). The chapter doesnot address the issues of suppliers engaging the services of people from communi-ties in which their mining customers are operating.

2 A Qualitative Survey of Sustainability and the MineralsIndustry Supply Chain

2.1 Background

Australia is a major player in the global mining industry. The expansion of the indus-try over the past 5–10 years has led to a large investment to support this growth,particularly in Western Australia, the nation’s richest source of minerals. The flow-on effect from this expansion has been widespread across the Australian economyand society, with large increases in wages (in the mining sector) and house pricesin Western Australia. In 2006/2007, mining contributed to 8% of Australia’s GDP,employed 127,500 people directly, and 200,000 people indirectly (including sup-pliers). It also represented 26% of Australia’s total capital investment, and con-tributed exports totalling A$91.3 Bn. Suppliers have been major stakeholders inand beneficiaries of this industry’s wealth, and therefore have had an importantrole in influencing and shaping the Australian industry’s transition to sustainabledevelopment.

2.2 Survey Purpose

During 2006, a qualitative survey was conducted by the author of a segment of theAustralian mining industry to identify views, opinions, and examples of the types ofsuppliers providing products and services to the mining industry. The purposes ofthe survey were to investigate what mining companies perceive the role of suppli-ers to be in their supply chain, and to identify any barriers that suppliers should beaware of that could negatively affect the role that they play. It was also conducted toestablish a baseline of the wider minerals industry to understand the potential lever-age that exists among suppliers to help meet its own objectives for environmentalperformance, and to work towards sustainable development goals. Specifically, itwas anticipated that the survey would generate qualitative data and anecdotal evi-dence that suppliers contribute to the sustainability of the minerals supply chain andhow they make this contribution.


2.3 Survey Method

The survey asked a series of multiple-choice and open-ended response questions.To develop the questions, the author engaged several marketing managers fromsupplier organisations and procurement managers from mining companies, as wellas other corporate environmental managers. Twenty two professionals in the Aus-tralian mining industry and their suppliers, were surveyed using an online surveydelivery program. These individuals were colleagues known to the author. Althoughthis was a relatively small sample, the major industry sectors represented in thesurvey included diversified mining and minerals processing companies, metal pro-ducers, exploration, and energy companies (51% of respondents). The majority ofthe respondents (65%) were mining and minerals processing and consulting compa-nies. Other respondents included researchers, academics, government organisations,and suppliers to the mining and minerals processing companies. Suppliers and othersupport organisations to the mining sector were also represented. The majority ofroles represented were consultants, contracting and procurement, and communityengagement staff.

2.4 Survey Findings

Energy, chemicals, telecommunications, and equipment were, not surprisingly, themost important supplied products and services to the mining industry (Fig. 1).

The most important finding was that when mining companies engaged with sup-pliers, greater than 50% of the respondents indicated that the most effective interac-tions occurred when:

• The supplier understood the needs of the business and tailored its approachaccordingly;

• The supplier could demonstrate how its own commitment to environmental man-agement and sustainable development would benefit the mining operation;

• The supplier created value for the mining operation by reducing costs and pro-viding an improved solution (compared to existing solutions); and

• The supplier knew the life-cycle impacts of its own goods and/or services on themining operation’s business.

These findings show the high expectations that mining operations have of theirsuppliers, and they provide useful guidance for suppliers aspiring to work for themining industry.

Secondly, the survey explored the major barriers identified to maximising therole of suppliers in, and leveraging their contribution and influence to, enhancinga mining company’s strategy for working towards sustainable development. Thesebarriers include limited engagement between a mining company’s contracting and

216 T.F. Guerin

0 2 4 6 8 10 12

Facilities management services

Waste management service providers

General contractors incl. labour hire

Speciality chemical suppliers

Logistics and transport

Lubricant suppliers

Consultants

Mining contractor

Water utilities

Spare parts suppliers

Fuel suppliers

Explosives suppliers

Tyre suppliers

Telecommunications services providers

Equipment manufacturers

Electricity suppliers

No. of responses

Extremely Important & Important Somewhat or Minor Importance Not Important at All

Fig. 1 Importance of suppliers to the normal running of business

procurement staff and environmental teams, and suppliers having limited under-standing of their mining company customers’ operations and business needs. Othersbarriers included mining companies having limited financial and human resourcesfor engaging with suppliers, and the hurdles presented by preferred vendor status orsimilar programs in effect at mining operations (Fig. 2).

Respondents indicated that the most important action a supplier could take toimprove a mining company’s drive towards a more sustainable future was demon-strating the supplier’s own commitment in these areas. These are described inTable 4.

These findings reflect the largely cultural issues of maximising the value obtainedfrom supplier relationships and in particular resistance to change. These findingsunderscore the importance of effective relationships between suppliers and miningcompanies such that there is fruitful exchange of ideas, innovations and relevantinformation to address problems or to identify opportunities for improvement. Pre-ferred vendor status can work well, though less so when prices start to increase(without corresponding value increase). Such programs can also promote the


0 2 4 6 8 10 12 14

Policies preclude assessment of supplier's potential contribution tosustainable development

A transactional approach to procuring goods and services fromsuppliers

Engaging with suppliers is a relatively low priority for the business

Absence of strong competition (among suppliers)

Limited contractor management skills in the business

No long term plan for ongoing engagement with suppliers

Lack of trust that suppliers can enhance performance and respond tobusiness' needs

Absence of industry drivers to change the status quo

Suppliers are not seen by the business as strategically important

There is little or no incentive for suppliers to provide exceedinglyhigh levels of service

Preferred vendor status and programs

Insufficient time and resources to dedicate to managing supplierseffectively

Suppliers have a limited understanding of your business

Limited interaction between contracting and procurement and theenvironmental teams in the business

No. of responses

Extremely important & important Somewhat and minor importance Not important

Fig. 2 Barriers to maximising suppliers’ influence

Table 4 What is the most important action that a supplier to your business could do to improveyour organisation’s commitment and transition to sustainable development?

Improve their own sustainability performanceUnderstand the business of their customersMake sustainable development part of the selling proposition and ensure the proposition is cast at

the customer audience as they may not be experts in the fieldProvide products that are energy efficient, have a limited impact on the environment, and are

socially responsibleBe proactive in promoting to customers the sustainability aspects of their products and services

as awareness is a key issueDemonstrate their commitment to customers and an understanding and alignment with

customer’s needs and aspirations

status quo and limit innovation (such as increasing environmental performance) incontracts.

The third major finding identified from the survey was the barriers that limitedmining companies from further engaging with their suppliers. These were a lackof time (for this particular activity), absence of commitment from senior mine man-agement to such engagement, uncertainty of outcomes from such engagement, and a

218 T.F. Guerin

lack of interest from suppliers to such an engagement. Other barriers include the per-ceived increase in cost from such engagement, and that such engagement is unusual(i.e., not standard business practise or part of management culture) for mining oper-ations (Fig. 3).

When respondents were asked what made their interaction with suppliers effec-tive (using examples), 86% of respondents indicated that it was extremely importantor important to them that the suppliers understood the needs of the business and tai-lored their approach accordingly, and that the suppliers could demonstrate how theirown commitment to environmental management and sustainable development couldbenefit the business (Fig. 4).

For each of the following statements, approximately three quarters of respon-dents stated it was extremely important or important that the supplier:

0 2 4 6 8 10 12

If we engage with one supplier we will have to engage withtheir competitors too

Supplier not a signatory to the Minerals Council of Australia"Enduring Value" framework for sustainable development

Supplier may gain access to knowledge that should be keptby the business only

No policy to engage with suppliers

Not been done before by our business

Potential increased cost of supplied goods and/or services(over the long term)

Supplier is set in its ways and is unlikely to change the way itdelivers its goods or service

Lack of interest from suppliers in undertaking furtherengagement with the business

Uncertain outcomes (from further investment of time inengagement)

Absence of senior management commitment to engagementwith suppliers

Lack of time (for further engagement with suppliers)

No. of responses

Extremely Important & important Somewhat & Minor Importance Not Important at All

t

Fig. 3 Barriers to engaging with suppliers


0 1 2 3 4 5 6 7

The supplier was a signatory tothe Minerals Council of

Australia "EnduringValue"framework for sustainable

development or at leastdemonstrated an awareness

of this framwork'ssignificance to the business

The supplier provided the servicesrequired but then went beyond

what was expected of them

The supplier provided thegoods and/or services required

and at a competitive price

The supplier helped reduceprocurement costs (i.e., the

process of procurement)

The supplier created value forthe business by reducingcosts and providing an

improved solution(compared to that existing)

The supplier knew the life-cycleimpacts of its goods and/or

services on the business

The supplier understood theneeds of the business and

tailored their approachaccordingly

The supplier could demonstratehow its own commitment to

environmental management andsustainable development could

benefit the business

No. of responses

Extremely important & important Somewhat or minor importance

Fig. 4 Importance of engaging with suppliers

• Provided the services required but then went beyond what was expected of them(in terms of delivering their products and services);

• Provided the goods and/or services required and at a competitive price;• Helped reduce procurement costs (i.e., the process of procurement);• Created value for the business by reducing costs and providing an improved solu-

tion (compared to that existing); and• Knew the life-cycle impacts of its goods and/or services on the business.

220 T.F. Guerin

These characteristics provide useful criteria for how to select suppliers or sup-ply chain partners. They are aspirational attributes for any supplier to the mineralsindustry.

This survey indicated fuel suppliers were perceived as important to the miningand minerals industry, and the remainder of this paper focuses on their role, alongwith that of lubricant suppliers, in providing a life-cycle examination of how a sup-plier impacts a customer’s business.

3 Overview of the Supplied Petroleum Hydrocarbon Life-Cycle

The downstream oil industry is a major supplier to the mining and minerals industryglobally as demonstrated in the survey described in the previous section and alsoin other industry reports (Guerin et al. 2004; Guerin 2006a, b). Suppliers in thisindustry interface with many parts of the mining and minerals production process.

A useful way of understanding the inter-connections between a supplier and amining or minerals processing operation (customer) is through the supplied productand service life-cycle across the mine operation. The life-cycle approach enablespetroleum hydrocarbons for example to be tracked from the point of supply throughto their end-of-life (Fig. 5).

Petroleum hydrocarbons are used through the entire mining and minerals pro-duction process and can generate impacts along the minerals processing value chain.

Storage & Internal DistributionUse & Servicing (Advice)

Terminal Disposal

End-of-Life Management(Collection/Transportation)

Supply

Well Head

Reprocessing & Recovery

Fig. 5 Lubricant life-cycle


Typically, the most recognised impacts of petroleum hydrocarbon usage are negative(Table 5), often associated with pollution.

A life-cycle analysis approach enables the full benefits of closer engagement withpetroleum hydrocarbon suppliers to be identified. It also facilitates development ofsubsequent joint action plans to address problems and explore opportunities. Manyof the opportunities can be positive, and the minerals industry can reap the benefitsif they are aware of and invest in the relationships with their petroleum hydrocarbonsupplier(s). Similarly, credible and professional suppliers can add depth to the levelof services or quantity and range of products they supply to a mine, including thosethat bring environmental and social as well as financial benefits.

The life-cycle approach provides a useful model for mapping supplier-customerrelationships and therefore marketing opportunities across the range of businessesin the minerals industry. Engagement between suppliers and their customers shouldstart at the tendering stage, continue during contract management, and remain inongoing interactions. Suppliers can also be a catalyst in other parts of the miningoperation, in addition to product supply and procurement, such as health, safety,and the environment (HS & E), to initiate activities in the customer organisation toenhance environmental performance of the mine.

The following four areas of a mining company’s business (in relation topetroleum hydrocarbons) are affected by and need to be considered by mining oper-ations for effective petroleum hydrocarbon management. These are also stages ofthe petroleum hydrocarbon life-cycle, and illustrate where a mining operation willneed to proactively manage hydrocarbons (Fig. 5):

• Supply and procurement;• Storage and internal distribution;• Product use and servicing; and• End-of-life management.

These stages are discussed in order. Selected examples of how suppliers ofpetroleum hydrocarbon can interact with mining companies are provided at eachof the stages of the life-cycle.

3.1 Supply and Procurement

During procurement and supply of petroleum hydrocarbons, there is an opportunityfor the supplier to consider supply transaction options, and understand the typesof products and/or related services needed at the mine. There is also the opportu-nity to review existing supply arrangements, that will help improve delivery, andreduce costs, and to provide environmentally-preferred products where these areavailable. This stage is critical in driving change in the mining and minerals indus-try. In the future, there will also be increasing pressure on suppliers as well as lubri-cant users as to the types of products used in particular applications. At this stage of

222 T.F. Guerin

Tabl

e5

Env

iron

men

tali

mpa

cts

asa

cons

eque

nce

ofeq

uipm

entm

aint

enan

cean

dsu

pplie

dpe

trol

eum

hydr

ocar

bons

toth

em

inin

gin

dust

ry

Asp

ecto

fm

aint

enan

cepr

ogra

ma

Des

crip

tion

ofim

pact

orpo

tent

iali

mpa

ctb

Liq

uid

petr

oleu

mhy

droc

arbo

nsc

Gro

undw

ater

cont

amin

atio

nfr

omsp

illag

esan

dle

aksd

Soil

and

surf

ace

wat

erco

ntam

inat

ion

from

spill

ages

and

leak

sd

Air

pollu

tion

(fro

mun

cont

aine

dvo

latil

eco

mpo

nent

sif

pres

ent)

Dis

posa

lwith

outr

euse

oren

ergy

reco

very

isun

sust

aina

ble

Solv

ents

Air

pollu

tion—

unco

ntai

ned

vapo

urs

coul

dad

vers

ely

affe

cthu

man

heal

thD

ispo

salw

ithou

treu

seor

ener

gyre

cove

ryis

unsu

stai

nabl

eG

roun

dwat

erco

ntam

inat

ion

from

spill

ages

and

leak

sd

Was

tegr

ease

Surf

ace

soil

cont

amin

atio

nfr

omsp

illag

esan

dle

aksd

Soil

and

grou

ndw

ater

cont

amin

atio

nfr

ompe

trol

eum

hydr

ocar

bons

and

met

als

impr

egna

ted

ingr

ease

d

Dis

posa

lwith

outr

euse

oren

ergy

reco

very

isun

sust

aina

ble.

Det

erge

nts

Toxi

city

tonu

mer

ous

aqua

ticor

gani

sms;

emul

sific

atio

nof

petr

oleu

mhy

droc

arbo

ns(a

ndre

duce

dw

aste

oil

reco

very

)Se

dim

ent(

susp

ende

dso

lids)

Surf

ace

wat

erco

ntam

inat

ion

from

spill

ages

and

leak

sd;b

lock

ages

caus

eflo

w-o

nef

fect

sin

oily

was

tew

ater

man

agem

ents

yste

ms


Tabl

e5

(con

tinue

d)

Asp

ecto

fm

aint

enan

cepr

ogra

ma

Des

crip

tion

ofim

pact

orpo

tent

iali

mpa

ctb

Con

tam

inat

edra

gs,p

aper

,pro

tect

ive

equi

pmen

t,an

dga

sket

seE

xces

sive

use

and

was

tage

isun

sust

aina

ble

Use

doi

lfilte

rs,b

urst

hydr

aulic

hose

s,em

pty

fuel

,oil

and

grea

seco

ntai

ners

(e.g

.,dr

ums)

Oft

enla

ndfil

led

whi

chis

unsu

stai

nabl

e.Pe

trol

eum

hydr

ocar

bons

with

inth

ese

mat

eria

lsha

veth

epo

tent

ialt

oim

pact

soil

and

grou

ndw

ater

(i.e

.,ac

tas

cont

amin

atio

nso

urce

s)

Ene

rgy

usag

e(p

ower

edeq

uipm

ent)

Hig

hle

vels

ofus

eca

nbe

unsu

stai

nabl

eif

notl

inke

din

toan

ener

gyge

nera

tion

syst

emon

site

Wat

erus

age

(for

was

hing

vehi

cles

prio

rto

mai

nten

ance

)H

igh

leve

lsof

use

are

unsu

stai

nabl

e(m

ayre

duce

quan

tity

and

qual

ityof

wat

ersu

pplie

sfo

rot

her

uses

,e.g

.,av

aila

bilit

yfo

rlo

calc

omm

uniti

esne

arm

ine)

a Incl

udin

gco

ntam

inan

ts,c

o-co

ntam

inan

ts,o

rw

aste

type

s.bN

ote

that

thes

ear

equ

alifi

edas

“pot

entia

l”im

pact

sbe

caus

eth

ese

was

tes

will

nota

lway

sha

vea

nega

tive

impa

cton

the

envi

ronm

ent(

i.e.,

ifth

eyar

em

anag

edan

ddi

spos

edof

prop

erly

).c T

hese

incl

ude

fuel

san

den

gine

,hyd

raul

ic,g

earb

ox,d

iffe

rent

ial,

and

stee

ring

oils

,off

-spe

cific

atio

nfu

els

and

oils

,cut

ting

fluid

s,an

doi

lyw

aste

wat

er.

dSo

ilan

dgr

ound

wat

erco

ntam

inat

ion

can

add

sign

ifica

ntly

toth

een

viro

nmen

tall

iabi

lity

ofa

min

ing

oper

atio

n,an

dsi

tein

vest

igat

ions

,ris

kas

sess

men

tsan

dre

med

iatio

npr

ogra

ms

may

bere

quir

edto

addr

ess

thes

eat

clos

ure

oras

part

ofth

edi

vest

men

tof

the

oper

atio

n.e A

lso

incl

ude

oil-

cont

amin

ated

plas

tics,

spec

ialit

ych

emic

als,

leat

her

and

clot

h(e

.g.,

glov

es).

224 T.F. Guerin

the life-cycle suppliers can help mining companies achieve their sustainable devel-opment goals through:

• Product design and development, supporting research and optimisation ofproduct selection, and offering product options and alternatives to conventionalproducts;

• Product procurement transactions and supply chain leverage.

3.1.1 Product Design and Development, and Offering Product Optionsand Alternatives

Petroleum hydrocarbon suppliers invest resources into developing and producingnew products for their customers. This is reflected in the financial commitmentsmade by large oil companies into product research. Examples of this includethe manufacturing and supply of low emission fuel products. Low sulphur diesel(50 ppm) is now being produced at refineries in Australia, and benzene reductionunits are currently being installed at Australian refineries to produce low benzenepetrol (1 ppm). These required maximum concentrations for sulphur and benzenewill be reduced even further as fuel regulations continue to become more stringent.Biofuels development will be of increasing importance as the price of crude oil con-tinues to increase and the demand for these products increase from larger users suchas mining and other heavy industries. Formulations that allow for longer storage lifeand that do not cause engine power to be significantly reduced are also needed bythe mining industry.

Petroleum hydrocarbon suppliers can provide alternatives to the conventionalrange of products currently being offered to the mining industry. Though cost iscritical, customers of lubricants increasingly want to exercise their ability to chooseoptions when purchasing products, including options related to environmental per-formance. For example, biodegradable lubricants are preferable for applicationswhere there are acute risks from mining or operations in environmentally-sensitiveareas such as during exploration and at ship-loading facilities (Battersby et al. 2003).

3.1.2 Product Procurement Transactions

Petroleum hydrocarbon suppliers can use their purchasing power to secure supplyarrangements with specialised chemical manufacturers or suppliers. This includesthird party supply of specialist products which can be procured at lower cost thancan be achieved by the end user (mine), such as specialist greases, fluids, coolants,and solvents. The benefits of this also include reduced administration to the mine,and the fact that it places responsibility for security of supply of these specialistproducts with the petroleum hydrocarbon supplier.

Suppliers can also assist a mining operation’s overall environmental program inthe development of environmental management plans (EMPs) for supplied products,which can be negotiated at the contract stage of the procurement process. Some of


the larger mining operations in Australia are now stipulating that EMPs be preparedby major fuel suppliers that are supplying product to their operations. EMPs shouldhighlight the risks and controls in place in relation to the supplied product or service(including its transport, storage, and handling); this increases the assurances that themining company has identified and is controlling these risks.

3.2 Storage and Internal Distribution

The second stage of the life cycle relates to facility design and layout, which influ-ences the placement of supplied product in relation to the operational needs of themine. Storage and internal distribution issues can have a significant impact on thepotential or likelihood of environmental contamination from products such as fromleaks, particularly those undetected, which can result in additional costs to the mine.These costs can be incurred during the normal life of the mine, or will be realised atmine closure if no action is taken during normal operations. Strategic capital invest-ment in appropriate storage and internal distribution facilities ultimately reduces thelong-term financial liability for a mine, because it can eliminate or reduce environ-mental contamination from product losses.

Elements of the product storage and internal distribution stage of the life-cycle,where suppliers can help mining companies achieve their goals for sustainabledevelopment, include the following:

• Ensuring facility design meets construction standards appropriate for thepetroleum hydrocarbon and chemical tanks and infrastructure present at the mine.

• Optimising fuel and lubricant delivery across an operation to ensure the lowestcost and safest way of keeping the mobile (i.e., portable or transportable) plantrunning.

• Identifying and assessing compliance of chemical storage areas to dangerousgoods standards (for packaged products).

• Stock reconciliation to account for product flows into and across a mine or aseries of mines.

• Testing of infrastructure (asset) integrity to prevent and minimise stored productlosses.

3.2.1 Meeting Design Standards

Fuel and lubricant storage distribution, and dispensing facilities must be designedand built to meet minimum engineering standards. There are standards that coverissues such as materials, tank and pipe configurations, electrical, safety, and envi-ronmental issues. In Australia, one of the main standards is Australia Standard (AS)1940:2004, that describes the requirements for storage of non-flammable liquidssuch as diesel and lubricants. Petroleum hydrocarbon suppliers have expertise inauditing and redesigning, rebuilding and/or repairing such facilities because they

226 T.F. Guerin

are continually working with fuel and lubricant infrastructure at their own facilities.They also have extensive experience in applying these standards because they auditand manage their own facilities. Suppliers are in a position to offer focused audit-ing capabilities to their customers, and to know which fuel and lubricants standardswill be applicable to the mine. There are a range of other industry standards as wellas those for handling flammable goods, and for construction of fuel and lubricantstorage and dispensing facilities.

3.2.2 Optimising Product Delivery

As a mine expands, and the location of the mined ore body changes relative tothe mine’s fixed infrastructure, so does the mining operation’s need for the sup-ply and dispensing of fuels and lubricants. For a mine to optimise the delivery offuels and lubricants in the mine, it requires extensive knowledge of transport anddistribution logistics. This will ensure that capital is not wasted on infrastructurethat could become redundant as a result of inappropriate placement of fuel or lubri-cant delivery infrastructure. Minimising the amount of time required for refuellingand maintenance ensures loss of productivity is kept as low as possible as well asenvironmental impacts.

3.2.3 Stock Reconciliation Solutions

Fuel and lubricant stock reconciliation systems include, for example, simplemechanical measurement (i.e., dipping) of tanks, reconciliation of flow meters ona regular basis across a single mine, and more complex network-level (i.e., acrossmultiple sites) leak detection systems that have data collection, statistical analyses,and red-flag reporting mechanisms. Reporting from stock reconciliation systemsidentifies where stock control practices are inadequate, and identifies tanks, or usersof mobile and fixed mechanical plant (i.e., machinery), that have or contribute tounusually high product losses. Such systems are particularly important for under-ground product storage facilities. Inventory control and monitoring systems are arelatively small investment that can reduce environmental testing and remediationcosts in the long-term, and are the only effective and preventative mechanisms formonitoring leaking underground storage systems. Stock reconciliation systems canalso enable better control of fuel management data for more effective reporting andreconciliation of greenhouse gas emissions.

3.2.4 Asset Integrity Testing

Asset integrity testing is the assessment of petroleum storage, distribution and dis-pensing equipment, and other facilities for product leaks. Mining operations andother facilities that handle fuel and lubricants are required to conduct integrity test-ing on their assets at specified time intervals. Ten-year test intervals are common inmany jurisdictions. Asset testing can include positive and negative pressure testingsystems, which can measure the loss of pressure or vacuum in the product storageor distribution system over time to determine the presence and extent of leaks. Asset


integrity testing should form the first stage of assessing the risks associated with thestorage and dispensing of fuel at a mine site. It is not uncommon to find that assetintegrity testing reveals that a proportion of underground storage structures (pipesand tanks) are leaking at a facility. A recent study of a commercial fuel networksupplying the road transport industry revealed that there were approximately 10%of sites that reported failures using vacuum testing of all underground storage anddistribution assets across the network. The presence of a failure from asset integritytesting, when using the common vacuum testing approach, indicates that there isair ingress and/or a crack or hole in the infrastructure. Where an asset failure hasoccurred, the concrete or surface overlying the underground asset will have to beremoved to examine and identify the reason for failure. Apparent asset failures (i.e.,reporting false positives during the vacuum test) may simply be a loose collar on apipe or loose pipe fittings, and not necessarily a hole in a tank or pipe.

3.3 Product Use and Servicing

Petroleum hydrocarbon products can and should be managed, during their workinglife, to ensure that they do what they are supposed to do during this time. The thirdstage of the life-cycle examines the impacts of the supplied petroleum hydrocar-bon product(s) on fixed and mobile mine plant components and how these productscan be best serviced to extend their own as well as the plant’s life. Fluids selec-tion across a mine’s fixed and mobile plant can include consolidating the range ofgrades of lubricants being used. Consolidation itself can reduce the range of prod-ucts and containers stored (and ultimately disposed of) at a mine site, which canenhance waste management. But more importantly, fluid selection can have a dra-matic impact on the eco-efficiency of mining equipment. Suppliers can work withmining companies in the product use and servicing stage to achieve the mine’s goalsfor sustainable development, in the following ways:

• Reviewing the mine’s maintenance strategy to enhance reliability of mobile andfixed mine plant.

• Recommending the use of energy efficient-lubricants for high-friction applica-tions.

• Managing lubricant cleanliness to maximise lubricant and plant life.• Developing lubricant laundering (i.e., cleaning) as an option to extend the useful

life of lubricants.

3.3.1 Reviewing the Mine’s Maintenance Strategy to Enhance Reliability ofMobile and Fixed Mine Plant

Further examples from this stage of the life-cycle are the contributions supplierscan make to maintenance strategies. These should include planning for mainte-nance activities, monitoring and analysing maintenance costs, establishing targetsfor maintenance performance (in particular percentage downtime) and establishing

228 T.F. Guerin

preventative maintenance programs. Preventative maintenance is an area where con-siderable cost savings may exist for a mine, particularly because the numbers andsizes of fixed and mobile plants can be large. An important part of any preventativemaintenance program is to have predictive tools to define equipment defects as earlyas possible. Early detection of a defect allows for better failure analysis to improvethe equipment’s service life performance. It also assists in identifying the true prob-lem rather than a symptom of the problem. In many cases, what we see as the failedcomponent is a symptom of what the true cause of the failure was. To determine thecauses of failure, fuel and lubricant suppliers can provide preventative maintenanceservices as a means of extending both product and plant life at customer sites usingthermographic techniques and condition monitoring programs that involve lubri-cant analysis and diagnosis. Such programs help prevent plant breakdowns, while atthe same time delivering business and environmental benefits through lower oper-ating and capital costs, and reducing rates of waste oil generation (Pearson 2004;Mercer 2005; Garvey 2006; West 2006). For example, infrared thermography hasbeen found to be a valuable tool in the mining industry. It can survey equipment ata mine, including electrical distribution systems, pumping systems, piping systems,exchangers, process fired heaters, and many other types of equipment. Infrared ther-mography can assist in finding the underlying true cause of failure. It is seen as apredictive tool that supports other predictive technologies, such as vibration analysisand compression analysis. One primary advantage is that it is faster than many of theexisting techniques in identifying and detecting a problem. It has the ability to finddefects before a secondary catastrophic failure occurs. A technician can view manypieces of mechanical equipment very quickly to determine if a possible problemexists. Various petroleum hydrocarbon suppliers are providing preventative mainte-nance strategies, that often package the solutions together for clients (Messenger etal. 2004a, b).

3.3.2 Recommending the Use of Energy-Efficient Lubricants forHigh-Friction Applications

Energy-efficient lubricants have a niche role in enhancing plant performance. Byswitching to synthetic lubricants, the most common examples of energy-efficientlubricants, a mine can improve both efficiency of plant energy use, and environmen-tal performance. For example, synthetic lubricants have long been recognised fortheir benefits compared to conventional mineral oil-based lubricants for increasingoil service life, reducing wear, system deposits, and improved viscosity/temperaturebehaviour. They are not used widely and this is primarily because of their cost.

One benefit that has been largely overlooked is that of energy savings. Becausethe mining industry must focus on reducing CO2 emissions, there is great bene-fit to using products, that contribute to reduced energy consumption, even thoughthe drop in CO2 emissions may be minor compared with emissions generated by amine. One application is the lubrication of worm gears, which have unique require-ments relative to lubrication of standard helical or spur gears. In particular, the highdegree of sliding contact in worm gears generates considerable friction. These types


68

72

76

80

84

88

Shell Mineral Oil Shell Synthetic PAOOil

Shell Omala EPB 320

% Efficiency GainFig. 6 Energy efficiencygains over conventionalmineral oil from applicationof selected syntheticlubricants in high frictionenvironments

of gears have numerous applications across processing plants, and in particular, ingear boxes and stationary equipment. Efficiencies with worm gearboxes are oftenas low as 70% which is a result of the high loads and high friction in transferringenergy through such gear configurations. Highly polar polyalkylene glycol (PAG)-based worm gear lubricants, such as Shell Tivela S oils, are ideal for lubricationof steel-on-bronze worm gears, because they can lower the friction in boundarylubrication and thereby reduce inefficiency. Maximising efficiency also means thatless power is lost in friction and converted into heat. In the David Brown Radiconefficiency worm gear test, in which the input and output torque of the gearbox isused to determine the efficiency, the PAG-based Shell Tivela S demonstrated 15.8%improvement in energy efficiency relative to a mineral oil based product. Based onnew PAG-technology, the Shell Tivela S offers benefits of 9% energy savings rela-tive to older PAG-based worm gear lubricants. Relative to a polyalphaolefin (PAO)-based fluid, the energy saving is 11%. In terms of cost savings, for an operationrunning 50 gearboxes for 168 h/week (50 weeks per annum), with an average poweroutput of 7.4 kW and electricity at a cost of $AUD0.14/kW/h, the savings relativeto a mineral oil (with gearbox efficiency 74.1%), in using a PAG based lubricantamounts to $AUD82K per annum (Guerin et al. 2004). These savings will increaseas the price of electricity continues to rise at the current high rates (10% per annum,or more).

In the same worm gear test, the benefits of energy efficiency for a biodegradablegear oil, Shell Omala EPB, are shown (Fig. 6). For the gearbox running on ShellOmala EPB, a 12% efficiency gain over a mineral oil-based gear oil (of the sameviscosity grade) and 7% over a PAO-based gear oil were obtained. The switch toShell Omala EPB in such an application would also bring the additional environ-mental benefits of a biodegradable lubricant (Battersby et al. 2003; Guerin et al.2004) and could be considered for any environmentally-sensitive application suchas on a wharf, jetty, or ship loader.

3.3.3 Managing Lubricant Cleanliness to Maximise Lubricant and Plant Life

Another example of product use and servicing is managing lubricant contamina-tion. The impact on heavy vehicles from contaminated lubricants can be extremely

230 T.F. Guerin

costly due to lost productivity, increased maintenance, and spare parts costs. Thereare many risks associated with lubricant contamination, especially where dirt, roadgrime, and dust are abundant. As far as particulate matter is concerned, how muchis considered too much, and how will this contaminant impact on a machine’slife? The impact of lubricant contamination will depend on the hardness, volume,and size of the contaminating material. Harder materials such as silica, bauxite,and iron ore will cause accelerated abrasive wear, whereas softer materials suchas talc and coal can cause build-up in oil ways and tooth roots that can lead tofailure (Carlin et al. 2003). Any size and number of particles in a lubricant cancause problems; however, larger particles tend to fall to the base of the plant’sfluid reservoir. The smaller particles remain suspended and are pumped into bear-ings and other critical working components. To prevent this problem, rather thanrelying entirely on oil filters, it is critical that plant and product container breathersare kept clean (Fig. 7).

The most common lubricant and fluids (including brake, hydraulic, steering flu-ids) contamination sources and causes include:

• The mechanical seal on metal drums working loose during abnormal transporta-tion conditions, releasing metal particulates and causing drum varnish to flakeinto the oil.

• Bulky plastic product containers having breathers that allow the product tobreathe, but that leave it exposed to atmospheric contamination.

• Bulk lubricant transport systems, which are used to administer lubricant productsto equipment in the field and can contain residue from previous loads and/or dustparticles.

• On-site practices designed to make life “easier” for on-site personnel who handlelubricants. For example, such as leaving a grease hopper lid open so that truckdrivers can monitor grease levels also leaves the product open to the elements andincreases risk of product contamination from dust.

Several studies have dealt with this issue in greater detail (e.g., Huth 1975; Pavlat1984; Rakic 2004).

3.3.4 Developing Lubricant Laundering as an Option to Extend the UsefulLife of Lubricants

A final example is a technology called lubricant laundering, which brings the benefitof reduced costs in purchase of new lubricants (Messenger et al. 2004a, b). Lubricantlaundering is the refurbishing or cleaning of a lubricant so it can be reused as alubricant. This process can also result in fewer oil changes which means less usedoil to manage. Applications of this technology in the Oceania region are limitedat the current time because of the relatively high capital cost for the equipment,and the labour required to handle and manage the laundering operation. Lubricantlaundering offers the potential for a mine to reduce its lubricant purchase costs;however, it should be viewed as only one of a number of strategies to help extend


Fig

.7U

ncov

ered

(top

left

),co

ntam

inat

ed(t

opri

ght)

,ope

n(b

otto

mle

ft)

brea

ther

s,an

dsl

oppy

disp

ensi

ngac

tiviti

esca

nle

adto

lubr

ican

tcon

tam

inat

ion

232 T.F. Guerin

the life of the supplied petroleum hydrocarbon at a mine (Neadle 1994; Messengeret al. 2004a, b)

3.4 End-of-Life Management

The final stage of the petroleum hydrocarbon life-cycle is managing the suppliedproduct at the end of its useful life. Although various technologies and strategiescan extend the life of supplied product, lubricants eventually become ineffective andneed to be managed as either wastes or a feedstock for energy recovery purposes.Suppliers can help mining companies achieve their goals for sustainability duringthe end-of-life management stage of the life-cycle, including the following:

• Product packaging and stewardship;• Used oil collection and management;• Management of maintenance wastes;• Fuel and lubricant infrastructure management; and• Fuel and lubricant disaster and spill management.

3.4.1 Product Packaging and Stewardship

Providing an outlet for off-site removal of used oil and oil containers is an ongoingchallenge for both mining operations and packed product fluid suppliers. Consoli-dation of supplied pack sizes into a single size, e.g., 18 L (where packed product isrequired at a mine) and switching to bulk lubricants (where possible), are ways inwhich suppliers can assist a mining operation. In Australia, an environmental andeconomic review of lubricant pack size consolidation in the 10–20 L pack size rangewas conducted by the author in 2003 (unpublished). The results demonstrated thatthe plastics recycling industry in Australia, while technically able to reprocess thevolume of containers produced as a result of the mining industry’s consumption, isat the stage of maturity such that the costs for reprocessing of used oil containerplastic is too high to provide a cost-effective and an equitable take-back service forall mining and/or industry customers. In Australia, the introduction of a NationalPackaging Covenant may help provide an incentive for the lubricant and specialistchemical supply industry to provide the most environmentally-preferred and costeffective packaging solutions for their industry to supply the mining industry. TheNational Packaging Covenant puts the onus on suppliers of products with containersand packaging to demonstrate how they will reduce the environmental burden of theproduct packaging they supply, and particularly so as this covenant is now legislatedat the state-level across Australia.

There is no consistent enforcement of pollution laws in the Australian miningindustry to drive the prevention of disposal of used oil containers at mining oper-ations. Hence, pollution continues to occur at mining operations from empty fluidcontainers and from other operational wastes.


3.4.2 Used Oil Collection and Management

The used oil management industry benefits greatly from the mining industry becauseof the large used oil volumes generated by mining and mineral processing. Forexample, the volume of used oil collected in Australia is approximately 500 MLannually. Of this volume, approximately 50 ML is generated by the mining industry.Used oil handlers provide a network of collection services reaching most locationsin Australia, including remote mining areas. These suppliers often work with eachother; as sub-contractors to other used oil handlers, depending on the region. Thereare however, a wide range of quality standards to which these suppliers work to,and this has meant there are varying levels of service quality provided to the miningindustry. There are no specific legislated standards to which these suppliers haveto work, with the exception of AS 1940:2004; this standard regulates the storageand handling of dangerous goods and has been enforced in many Australia jurisdic-tions by state governments. The author recently reviewed and audited all major usedoil handling facilities in Australia (unpublished report). Some facilities are certifiedto ISO 14001, but many of the facilities have poor housekeeping practises. Over-all, these facilities are improving due to the increased levels of competition, largelydue to the Australian federal government’s initiative to implement legislation thatmaximises the value of the used oil resource. Used oils are reprocessed back intobase oils at various reprocessing facilities across Australia, including most capitalcities.

3.4.3 Management of Maintenance Wastes

A further example is the management of maintenance wastes (Table 6).Such waste, which includes used petroleum hydrocarbons, poses a significant

challenge to the mining industry (Guerin 2002). If maintenance activities are notconducted effectively so as to minimise losses of petroleum hydrocarbon wastesto the environment, they can lead to significant long-term environmental liabilitiesfrom soil and ground water contamination. Typically, many older mining operations(i.e., those established for >20 years) do not manage their maintenance wastes effec-tively, based on a survey previously published by the author (Guerin 2002). Goodhousekeeping in maintenance areas is critical to prevent soil and groundwater con-tamination; such house keeping includes for example proper waste segregation andstorage of drums and wastes (Fig. 8).

Petroleum hydrocarbon suppliers often have the capability or the supply chaininfluence to provide wide-ranging services that improve management of mainte-nance activities at a mine. Petroleum hydrocarbon suppliers can assist by:

• Auditing maintenance waste streams;• Advising on process improvements to reduce volumes and types of maintenance

wastes; and• Advising on life-cycle management of maintenance wastes from prevention

through to treatment.

234 T.F. Guerin

Tabl

e6

Sour

ces

ofw

aste

sfr

omm

aint

enan

ceop

erat

ions

inth

em

iner

als

indu

stry

a

Stag

eof

min

ing

proc

ess

Prac

tice

orsp

ecifi

csi

telo

catio

nTy

pean

dso

urce

ofw

aste

Exp

lora

tion

Dri

llm

aint

enan

cear

eas

Spill

ages

and

leak

ages

ofoi

ls,g

reas

e,an

dde

grea

sers

duri

ngm

aint

enan

ceto

drill

ing

rigs

Dri

llm

astm

aint

enan

cear

eas

Gre

ase

and

oils

and

blas

ted

from

mas

tfra

me

befo

reov

erha

ulm

aint

enan

cean

dre

-pai

ntin

gis

carr

ied

out

Dri

lling

oper

atio

nsD

rilli

ngm

uds

with

ores

cont

aini

nghy

droc

arbo

nsM

ine

Shov

els,

exca

vato

rs,s

crap

ers,

back

hoes

,whe

ello

ader

s,an

dbu

cket

load

ers

Was

teoi

lfro

moi

lcha

nges

tom

ine

equi

pmen

t,sp

illag

esfr

ombr

eakd

own

mai

nten

ance

,blo

wn

hydr

aulic

hose

s,sp

illag

esfr

omre

fuel

ling,

mai

ntai

ning

oila

ndgr

ease

leve

lson

field

equi

pmen

t;em

pty

drum

san

dus

edpr

otec

tive

clot

hing

Mai

nten

ance

Was

hdo

wn

area

sW

ash

dow

nof

mob

ileeq

uipm

ent,

efflu

entc

onta

inin

goi

ls,d

iese

l,gr

ease

,det

erge

nts

and

soil

Hea

vyve

hicl

eeq

uipm

ent

serv

icin

gO

ilan

dfil

ter

chan

ges

onm

obile

equi

pmen

t,w

aste

grea

seco

ntai

ners

,blo

wn

hydr

aulic

hose

s,us

edpr

otec

tive

clot

hing

and

lead

acid

batte

ries

;was

tety

res;

wor

nbr

ake

pads

;sol

vent

for

engi

nepa

rts

clea

ner;

plas

ticdr

ums;

was

teco

olan

t,br

ake

and

tran

smis

sion

fluid

Lig

htve

hicl

ese

rvic

ing

Oil

and

filte

rch

ange

son

mob

ileeq

uipm

ent,

was

tegr

ease

cont

aine

rsan

dle

adac

idba

tteri

es;t

yre

bay

was

tes;

gene

ralw

aste

arou

ndca

rra

mps

;wor

nbr

ake

pads

;sol

vent

brak

ecl

eane

r;so

lven

tfo

ren

gine

part

scl

eane

r;pl

astic

drum

s;w

aste

cool

ant,

brak

eflu

idan

dtr

ansm

issi

onflu

idSe

rvic

ing

pits

Spill

age

duri

ngve

hicl

ese

rvic

ing,

regu

lar

grea

sing

and

clea

ning

outo

fsl

udge

pits

;use

dpr

otec

tive

clot

hing

Wor

ksho

pflo

ors

Spill

age

onto

wor

ksho

pflo

ordu

ring

mai

nten

ance

and

repa

irs,

and

leak

age

and

spill

age

from

oil

stor

age

area

and

from

was

hdo

wn

prac

tices

Oily

was

tew

ater

sepa

rato

rsIn

corr

ectly

desi

gned

orpo

orly

mai

ntai

ned

equi

pmen

tO

ilfil

ter

drai

ning

Spill

ages

arou

ndco

llect

ion

vess

el


Tabl

e6

(con

tinue

d)

Stag

eof

min

ing

proc

ess

Prac

tice

orsp

ecifi

csi

telo

catio

nTy

pean

dso

urce

ofw

aste

Was

teoi

lsto

rage

Spill

ages

duri

ngst

orag

ean

dtr

ansf

ers

Wor

ksho

pdr

ain

clea

ning

Slud

ge(f

rom

build

-up)

Com

pres

sor

shed

sO

ilch

ange

s,le

akag

es,c

ompr

esso

rcl

ean

dow

n,w

ater

/oil

drai

nage

from

filte

rsan

dai

rre

ceiv

er,

was

hdo

wn

ofco

ncre

teflo

orD

rum

stor

age

area

sL

eaks

/spi

llsfr

omdr

ums,

was

hdo

wn

ofco

ncre

teflo

ors

and

drum

clea

ning

Fuel

supp

lyde

pots

and

infr

astr

uctu

reL

eaks

ofdi

esel

and

gaso

line

(on-

orof

f-si

te),

som

etim

esfr

omun

derg

roun

dsu

pply

pipe

wor

k;re

fuel

ling

leak

s,(o

verfl

ows

and

brok

ense

als)

;sur

face

wat

erru

n-of

fO

ilsu

pply

bays

Spill

sdu

ring

fillin

gof

stor

age

tank

s,fil

ling

ofve

hicl

esan

dm

obile

tank

ers

Equ

ipm

entr

efue

lling

Spill

age

(ove

rfilli

ng)

duri

ngre

fuel

ling

ofeq

uipm

enta

ndse

rvic

ing

truc

ks,l

eaki

ngpu

mps

and

blow

nho

ses

Ups

trea

m(o

rpr

imar

y)pr

oces

sing

Proc

essi

ngpl

ants

Oil

chan

ges

onsc

rubb

ers,

scre

ens

and

conv

eyor

belts

;gre

ase

Cru

sher

area

sD

usts

uppr

essi

onfo

am;g

reas

ean

doi

lsO

resh

ip-

men

t/tra

nspo

rtSt

acke

rs,r

ecla

imer

s,co

nvey

ors,

trai

nlo

adou

tare

asG

reas

ean

dle

aked

oil,

part

icul

arly

hydr

aulic

fluid

Dow

nstr

eam

proc

essi

ngM

illin

g,sm

eltin

g,re

finin

g,pr

epar

atio

nfo

rsa

leM

etal

san

dm

iner

als;

petr

oleu

mhy

droc

arbo

nssp

ills,

soil

and

grou

ndw

ater

cont

amin

atio

nin

part

icul

arfr

omlu

bric

ants

,cut

ting

fluid

s,an

dhy

drau

licflu

ids

a Thi

sis

aco

mpr

ehen

sive

listin

gof

pote

ntia

lsou

rces

and

type

sof

was

tes

obse

rved

atm

inin

gop

erat

ions

duri

ngsi

tevi

sits

byth

eau

thor

.

236 T.F. Guerin

Fig

.8Pe

trol

eum

hydr

ocar

bon

was

tes

incl

udin

gus

edfil

ters

(top

left

)sho

uld

bese

greg

ated

from

othe

rtyp

esof

was

tes.

Unb

unde

dst

orag

eor

inef

fect

ualb

undi

ng(t

opri

ght)

shou

ldbe

rect

ified

tom

eet

appr

opri

ate

indu

stry

stan

dard

s.Sp

illab

sorb

ent

isap

plie

dto

aw

orks

hop

oil

loss

(bot

tom

left

)an

dim

prop

erst

orag

eof

used

oilc

onta

iner

sat

alu

beba

y(b

otto

mri

ght)


These areas have been dealt with extensively elsewhere and are not discussedfurther in this chapter (Guerin et al. 1994; Guerin 2002).

3.4.4 Fuel and Lubricant Infrastructure Management

A further example of end-of-life management of petroleum hydrocarbons is man-aging aging fuel and lubricant infrastructure and assets. This stage of the life-cycleposes the single biggest financial risk to mining companies from petroleum hydro-carbons. Therefore, the procurement of cost effective and technically proficient envi-ronmental consultants and civil contractors to adequately delineate and remediatecontaminated soil and groundwater, is critical. Furthermore, to minimise the amountof remediation needed, asset integrity testing should also be carried out. Petroleumhydrocarbon suppliers in Australia and the wider Asia Pacific (Oceania) regionhave developed testing specifications that consultants and contractors are requiredto use for soil and groundwater assessment and remediation. Such an approachspecifies the expected outcome or objective of each phase of the assessment is forthe mining operation, enables standardised consultant and contractor performance,produces consistent results across operations and countries, and minimises wastedefforts in ineffective environmental assessments. Petroleum hydrocarbon suppliers,specifically their environmental and remediation teams, therefore have expertisethat may help mining companies ensure that any work done by external partiesto delineate contamination for improved environmental management and closureplanning is effective, and properly estimated and executed. These resources can bedrawn upon by the mine procurement staff as part of the fuel and lubricant supplyagreements.

3.4.5 Fuel and Lubricant Spill Management

Fuel and lubricant suppliers usually have specialised expertise and dedicatedresources for the management of petroleum hydrocarbon spills. Mining operationscan harness this expertise by having their suppliers review on-site spill or disastermanagement plans, purchasing spill kits or related products, and engaging them forco-ordinated disaster management training. These services can be included in sup-ply agreements or procured out of scope of the supply agreement. Suppliers canalso assist audits, develop schedules for testing disaster management programs, andidentify resources that are needed to ensure effective planning.

3.5 An Example of Engagement Between a Fuel and LubricantSupplier and an Australian Mining Company

3.5.1 Background and Rationale

Incorporating environmental considerations into the minerals supply chain, such asthose opportunities described in the preceding sections, requires a willingness for

238 T.F. Guerin

deliberate engagement between the supplier and the mine through focused planningsessions. These planning sessions need to be a collaborative effort by both parties;otherwise, if driven by the supplier only, they could be perceived as simply a moveby the supplier to elicit the provision of more product purchases or services into themine. This section reports an example of how the life-cycle approach was success-fully used by a coal mining company to engage with their fuel and lubricant supplierand improve the environmental performance of its operations.

The mine produces approximately 10 Mt of coal annually and is located in thecentral coastal region of eastern Australia. It has approximately 10 satellite mineswithin approximately 200 km from the mine’s head offices, and is of strategicimportance to the electricity generation industry on the east coast of Australia. Themine’s diesel fuel consumption is approximately 50 ML per year. Lubricant usage isestimated at approximately 2 ML per year.

3.5.2 Engagement Process

Both the supplier and mining operations agreed that there could be value in run-ning an engagement session to systematically identify ways to improve the valueeach party would obtain from the relationship. The existing contract did notpreclude such an engagement process. A half day engagement session was co-ordinated by the supplier on the mine’s site. Participants in the engagement sessionwere the:

• Procurement Manager from mine• Two Operations Personnel from mine• Environmental Officer from mine• Key Account Manager from supplier• Environmental Adviser from supplier• Alternative Fuels Manager from supplier• National Mining Marketing Co-ordinator from supplier

Approximately half an hour was dedicated to brainstorming each of the 4 stagesof the supplied lubricant and fuel product life-cycle (Fig. 5). The remaining 2 h wereused to review and clarify each of the ideas raised and prioritise these as actions.Actions were ranked according to whether they were high, medium or low prior-ity (as agreed by both parties), and accountabilities for the high priority actionswere set.

3.5.3 Engagement Outcomes

Table 7 lists the outcomes from the engagement session.For each of the stages of the life-cycle, the most important issues were captured

and key actions to address these issues were identified. For the supply stages of thelife-cycle, alternative fuels and guaranteed supply of existing fuels were of mostconcern. For storage and distribution, checking compliance to relevant standards


Tabl

e7

Out

com

esfr

oman

enga

gem

ents

essi

onbe

twee

na

petr

oleu

mhy

droc

arbo

nsu

pplie

ran

da

min

ing

cust

omer

inA

ustr

alia

Stag

eof

hydr

ocar

bon

life-

cycl

eIs

sue

Des

crip

tion

ofid

eas

and

issu

esra

ised

inen

gage

men

tse

ssio

nPr

iori

ty(L

/M/H

)So

lutio

nop

tion/

actio

ns:(

C)=

Cus

tom

eran

d(S

)=

Supp

lier

toac

tion

1.Su

pply

and

proc

urem

ent

Alte

rnat

ive

fuel

The

reis

ane

edto

iden

tify

bio-

dies

elso

urce

sav

aila

ble

toth

em

ine

and

whe

ther

itis

feas

ible

for

the

min

e.T

hefo

llow

ing

issu

esw

ere

rais

ed:

•Im

pact

onpo

wer

,odo

ur,i

mpa

cton

emis

sion

s(l

evel

san

dqu

ality

),co

mpl

ianc

eto

evol

ving

law

s/re

gula

tions

.•

Impa

cton

emis

sion

sis

criti

cali

ssue

.•

Part

icul

ates

wer

eid

entifi

edas

criti

cali

ssue

s.•

Whe

ther

orno

talte

rnat

ive

fuel

sw

ould

low

eren

gine

life.

H•

Con

duct

tria

lson

biof

uels

(C).

•R

egul

ator

ych

ange

sto

bem

onito

red

(C).

•A

nyne

wal

tern

ativ

efu

els

toha

vete

stin

gpr

ior

tosu

pply

toas

sess

the

impa

cton

emis

sion

s(S

)as

wel

las

perf

orm

ance

impa

ctas

sess

ed(S

).

Gua

rant

eeof

supp

lySe

curi

tyof

supp

ly/a

vaila

bilit

yof

prod

uct:

The

follo

win

gis

sues

wer

era

ised

:•

Con

solid

atin

gth

epu

rcha

sing

ofot

her

chem

ical

sw

ithpe

trol

eum

hydr

ocar

bons

.•

Iden

tified

the

impo

rtan

ceof

unde

rsta

ndin

gw

hatb

ack-

uppl

ans

are

ther

eto

ensu

rese

curi

tyof

fuel

and

lubr

ican

tsup

ply

toth

ecu

stom

erin

futu

re.

HPr

iori

tyof

this

issu

eno

ted

Del

iver

yT

hefo

llow

ing

issu

esw

ere

rais

ed:

•Id

entif

yif

road

tran

spor

tis

the

best

/onl

yw

ayof

supp

lyin

gpr

oduc

tto

the

site

s•

Asc

erta

inth

esu

pply

foot

prin

t(i.e

.,to

tal

envi

ronm

enta

lcos

tof

supp

lyin

gof

prod

uct)

.•

Ack

now

ledg

edth

atda

mag

eddr

ums

wer

ele

adin

gto

envi

ronm

enta

lris

ksac

ross

the

site

s.•

Iden

tified

need

toas

cert

ain

iffu

elun

load

ing

isA

S19

40:2

004

com

plia

nt.

MN

oted

.Can

dS

agre

edth

atth

ese

wou

ldre

quir

eat

tent

ion

inth

eco

ntra

ct

240 T.F. Guerin

Tabl

e7

(con

tinue

d)

Stag

eof

hydr

ocar

bon

life-

cycl

eIs

sue

Des

crip

tion

ofid

eas

and

issu

esra

ised

inen

gage

men

tse

ssio

nPr

iori

ty(L

/M/H

)So

lutio

nop

tion/

actio

ns:(

C)=

Cus

tom

eran

d(S

)=

Supp

lier

toac

tion

Proc

urem

ent

proc

ess

Min

eac

know

ledg

edth

ene

edto

influ

ence

supp

liers

(usi

ngne

wsa

fety

,env

iron

men

talr

egul

atio

nsan

dco

ntro

ls).

The

follo

win

gis

sues

wer

era

ised

:•

Min

imis

epa

per

(req

uire

dto

have

fuel

san

dlu

bes

deliv

ered

).•

Com

plex

ityof

proc

urem

entp

roce

ss(e

lect

roni

cda

tain

terf

ace—

Qua

drem

).

MIn

vest

igat

ein

trod

uctio

nof

Qua

drem

—an

elec

tron

ictr

adin

gm

ediu

m(C

&S)

2.St

orag

ean

din

tern

aldi

stri

butio

nC

ompl

ianc

eT

hem

ine

iden

tified

the

need

toas

cert

ain

if:

•th

ere

was

scop

ew

ithin

the

fuel

supp

lyco

ntra

ctfo

rco

nduc

ting

inte

grity

test

ing

ofta

nker

and

chec

king

com

plia

nce

AS

1940

:200

4.•

the

supp

lier

was

audi

ting

the

fuel

faci

litie

sat

the

min

e(w

asno

tkno

wn

byth

em

ine

ifth

isw

asth

eca

se).

H•

Supp

lier

has

anad

viso

ryro

le(S

).•

Ext

erna

laud

itsre

quir

edev

ery

3ye

ars

acco

rdin

gto

the

min

e’s

own

audi

ting

requ

irem

ents

(C).

•In

tern

alen

viro

nmen

talc

ompl

ianc

e,in

clud

ing

late

stve

rsio

nof

AS

1940

:200

4(C

).

Prod

uct

hand

ling

Safe

tyan

dE

nvir

onm

enta

lris

kof

mov

ing

prod

uct:

Aso

lutio

nco

uld

bein

pipi

ngpr

oduc

t•

Min

imal

hand

ling

ofpr

oduc

tssh

ould

bea

goal

atth

em

ine.

•H

SEco

mpl

ianc

ew

ithre

gard

sto

mov

ing

prod

uct(

e.g.

,haz

ardo

us).

•T

here

isa

need

topr

ovid

etr

aini

ngfo

rke

ype

rson

nela

tmin

esi

tes

onda

nger

ous

good

sm

anag

emen

t.•

Pipi

nglo

ngw

allfl

uid

toth

eun

derg

roun

dm

ine

(i.e

.,ge

tting

prod

uctt

om

ine

face

)co

uld

redu

cem

anua

lhan

dlin

gof

20L

cont

aine

rs.

H•

20L

oilc

onta

iner

sto

betr

ansp

orte

din

self

-bun

ded

palle

ts(C

&S)

.•

Mov

eto

bulk

(to

deve

lop

pay

back

scen

ario

,nee

dto

unde

rtak

ea

bene

fitco

stan

alys

is(C

&S)

.•

Inve

stig

ate

trai

ning

optio

nsfo

rm

achi

neop

erat

ors

(C&

S).


Tabl

e7

(con

tinue

d)

Stag

eof

hydr

ocar

bon

life-

cycl

eIs

sue

Des

crip

tion

ofid

eas

and

issu

esra

ised

inen

gage

men

tse

ssio

nPr

iori

ty(L

/M/H

)So

lutio

nop

tion/

actio

ns:(

C)=

Cus

tom

eran

d(S

)=

Supp

lier

toac

tion

Stor

age

faci

litie

sM

ine

requ

este

din

form

atio

non

best

met

hods

for

stor

age

incl

udin

gbu

lkta

nks,

effic

ienc

yof

prod

uct

use

onsi

te,u

nder

grou

ndst

orag

efo

rbu

lklu

bric

ants

,por

tabl

eun

derg

roun

ddi

esel

tank

s,an

din

crea

sed

avai

labi

lity

offle

et

MN

oted

.Sup

plie

rto

prov

ide

best

prac

tise

info

rmat

ion

(S)

3.U

sean

dse

rvic

ing

Env

iron

men

tal

cont

ami-

natio

n

Con

tam

inat

ion

ofth

een

viro

nmen

tfro

mpe

trol

eum

hydr

ocar

bons

•M

inim

isin

gsp

ills

and

was

tage

.•

Spill

ages

from

use

and

hand

ling

onsi

te.

•D

uedi

ligen

cean

dco

ntam

inat

edgr

ound

wat

er/s

oil.

•L

iabi

lity

aris

ing

from

cont

amin

atio

n.•

Em

ulsi

on:W

here

does

itgo

?C

ould

goto

grou

ndw

ater

and

soil.

•H

owm

uch

soil

and

grou

ndw

ater

cont

amin

atio

nis

atth

ecu

stom

ersi

tes?

M-H

Not

ed

242 T.F. Guerin

Tabl

e7

(con

tinue

d)

Stag

eof

hydr

ocar

bon

life-

cycl

eIs

sue

Des

crip

tion

ofid

eas

and

issu

esra

ised

inen

gage

men

tse

ssio

nPr

iori

ty(L

/M/H

)So

lutio

nop

tion/

actio

ns:(

C)=

Cus

tom

eran

d(S

)=

Supp

lier

toac

tion

Prod

uctc

on-

tam

inat

ion

On

site

cont

amin

atio

nof

lubr

ican

tsan

dot

her

fluid

s•

Wro

ngpr

oduc

tgoi

ngin

toa

mac

hine

.•

Coa

lcon

tam

inat

ion

inlu

bric

ants

.•

Prod

uctc

lean

lines

sis

ahi

ghpr

iori

tyin

cons

tric

ted

unde

rgro

und

envi

ronm

ent.

•H

ave

lubr

ican

tcle

anlin

ess

asse

ssm

entb

een

cond

ucte

d?•

Bre

athe

rson

bulk

and

1,00

0L

stor

age—

have

they

been

asse

ssed

?

M-H

•U

pgra

dew

orks

hops

tobu

lk(C

).•

Tra

inin

gfo

rm

ine

staf

fin

min

imis

ing

lubr

ican

tcon

tam

inat

ion

(C&

S).

•M

inim

ise

the

num

ber

oflu

bric

ant

grad

es(C

&S)

.•

Red

uce

lubr

icat

ion

cont

amin

atio

npo

ints

(e.g

.,br

eath

ers)

.•

Stor

age

faci

litie

sup

grad

e(u

sebe

stpr

actis

e)(C

).•

Dru

ms

colo

urs

shou

ldbe

such

that

itis

mor

edi

fficu

ltfo

rop

erat

ors

tous

ein

corr

ectfl

uids

(C&

S).

•M

ine

wan

ted

tokn

owif

lubr

ican

tsco

uld

bela

unde

red

(S).

•H

owca

nw

ater

bepr

even

ted

from

ente

ring

into

oili

nm

achi

nes

(S)?

Prod

uct

ratio

nali-

satio

n

Red

ucin

gnu

mbe

rof

prod

ucts

onsi

te•

Lub

rica

ntsu

rvey

tode

term

ine

best

fitof

prod

ucts

topl

ant.

•C

annu

mbe

rof

prod

ucts

used

best

ream

lined

?•

Prod

ucti

dent

ifica

tion:

wid

era

nge

ofoi

lsan

dlu

bric

ants

onsi

te—

need

mat

eria

lsan

dM

SDS

regi

ster

upda

tes

•D

oes

cust

omer

have

ast

rate

gic

mai

nten

ance

prog

ram

and

does

itin

clud

elu

bric

antt

ypes

,lub

elo

ngev

ityst

udie

s,an

doi

lch

ange

outf

requ

ency

asse

ssm

ent?

MSu

pplie

rlu

bric

ante

ngin

eer

toup

date

and/

orco

mpl

ete

site

lube

surv

eys

and

iden

tify

oppo

rtun

ities

tora

tiona

lise

grad

es(S

)

Environmental Performance in the Minerals Supply Chain 243Ta

ble

7(c

ontin

ued)

Stag

eof

hydr

ocar

bon

life-

cycl

eIs

sue

Des

crip

tion

ofid

eas

and

issu

esra

ised

inen

gage

men

tse

ssio

nPr

iori

ty(L

/M/H

)So

lutio

nop

tion/

actio

ns:(

C)=

Cus

tom

eran

d(S

)=

Supp

lier

toac

tion

4.E

ndof

life

man

agem

ent

Use

doi

l•

The

min

edo

esno

thav

ean

yre

conc

iliat

ion

proc

ess

for

dete

rmin

ing

the

mas

sba

lanc

eof

lubr

ican

tsac

ross

the

min

e.•

Asi

ngle

was

tem

anag

emen

tcon

trac

tor

for

colle

ctio

nan

ddi

spos

alof

was

teoi

ls,d

rum

s,sp

illed

fuel

,filte

rs,o

ilra

gs,h

ydro

carb

onw

aste

,an

dgr

ease

shou

ldbe

cons

ider

ed.

HT

his

link

sto

was

tere

mov

alan

dst

orag

e(b

elow

)

Dru

man

dco

ntai

ner

disp

osal

(was

tere

mov

al)

Rem

oval

and

man

agem

ento

fco

ntai

ners

:seg

rega

tion

ofhy

droc

arbo

nw

aste

and

gene

ralw

aste

•D

ispo

salo

fus

edfil

ters

.•

Sepa

ratio

n/so

rtin

gof

was

tepr

oduc

tsis

anis

sue

for

the

min

e.•

Dru

mdi

spos

alis

anis

sue

(con

solid

atio

nto

bulk

pods

coul

dre

duce

this

prob

lem

).•

Dru

mcr

ushe

rha

spo

tent

ialf

orsa

fety

issu

esat

the

min

e.•

20L

drum

and

filte

rdr

aini

ngin

wor

ksho

pca

usin

gco

ntam

inat

ion

ofoi

l.

M•

Mas

sba

lanc

eas

sess

men

tand

repo

rtin

gne

eded

atm

ine

(C&

S).

•Su

pplie

rto

cons

ider

cert

ifyi

ngus

edoi

lhan

dlin

gco

ntra

ctor

s(S

).•

Oil

wat

erse

para

tor

atm

ine:

inve

stig

ate

upgr

adin

g(C

).•

Hav

ea

sing

lew

aste

rem

oval

cont

ract

or(C

)•

Dru

ms:

Segr

egat

eus

eddr

ums

from

gene

ralw

aste

,rem

ove

drum

crus

her,

redu

cedr

ums

bygo

ing

tobu

lk(C

)•

Dru

ms:

Supp

lier

tosu

pply

cont

act

deta

ilsfo

rre

cycl

ers:

Sim

sM

etal

(S).

•U

sed

oilfi

lters

requ

ires

disp

osal

(C&

S).

•H

ascu

stom

erdo

nea

was

tem

anag

emen

taud

it(C

)?W

aste

stor

age

Ded

icat

edus

edoi

lsto

rage

•M

ixin

gof

oilc

onta

min

ated

was

tew

ithot

her

was

tes.

•U

sed

hydr

ocar

bon

tank

sth

atca

nbe

used

toco

llect

was

teoi

lspi

llson

site

usin

gcu

stom

erpe

rson

nel.

MN

oted

244 T.F. Guerin

and laws and product handling were the most important issues. For the use andservicing stage of the life-cycle, contamination of the environment and of product(i.e., of lubricants) was the most important issue, and for the end-of-life managementstage, waste oil was the most important issue. There were several issues that wereraised by the mine that related to the operation of the fuel and lubricants contract.These included: the mine inquiring as to which party was responsible for auditingthe fuel and lubricant facilities; discussion regarding improving manual handling of20 L drums at the mine; and the need for training of operators particularly in relationto product handing and cleanliness. In summary, the outcomes were identification ofa range of actions, by both the supplier and the mine, to address the highest priorityissues. Actions were followed through as part of normal engagement between themine and supplier.

4 Barriers to Optimising the Contribution of Suppliers

The chapter highlights opportunities where petroleum hydrocarbon suppliers canwork with mining companies to help them work towards a sustainable developmentagenda, including the provision of specific products and services that add significantenvironmental value (Table 8).

However, there are barriers to getting such initiatives embedded at mining oper-ations as has been identified earlier in the chapter. There are technical barriers toimplementing supplier-driven environmental improvements in the mining supplychain. However, the most difficult barriers, are those relating to changing culturein both the supplier and mining customer businesses. Mining companies need toappreciate and value suppliers, products, and/or services that will or can contributematerially to the achievement of their goals for long-term, sustainable operationof their mines. Such an appreciation is reflected in collaboration between suppli-ers and contractors that includes the engagement planning sessions described pre-viously. While collaboration can be considered the driving force behind effectivesupply chain management, there is still limited evidence that companies have trulycapitalised on its potential. This is a challenge for the mining industry, which inthis regard is considerably behind other industries such as the food, automotive, andelectronics industries.

There are other barriers that will limit the implementation of examples describedin the preceding sections of this chapter. The lack of an understanding by suppliersthat their long term commitment to a mining operation is critical. Such commitmentwill require ongoing relationship management and a 2-way commitment to improvethe value provided back to the supplier and through to the mining operation. Thechallenge is for the supplier to remain engaged and not lose interest or margin. Alsothe perceived benefits of stakeholder engagement along the supplied product life-cycle can be intangible, with only limited direct evidence of impact on financialperformance. The challenge for suppliers is to demonstrate the financial value in allthe offerings provided to the mining company, in addition to the benefits that helpthe mining company become more sustainable.


Tabl

e8

Spec

ific

oppo

rtun

ities

toen

hanc

een

d-of

-lif

em

anag

emen

tof

petr

oleu

mhy

droc

arbo

nw

aste

sat

min

esi

tesa

Stra

tegy

Exa

mpl

esof

tech

nolo

gies

,inn

ovat

ions

orpr

actis

e(s)

whi

chca

nbe

prov

ided

bysu

pplie

rs

Prev

entio

nSt

rate

gies

toim

prov

em

aint

enan

cepl

anni

ngan

dsc

hedu

ling

(e.g

.,pr

even

tativ

em

aint

enan

ceto

enha

nce

oill

ife

inpl

anta

ndre

duce

wea

r)Se

greg

atio

nof

was

tes

ascl

ose

toth

epo

into

for

igin

aspo

ssib

le(e

.g.,

keep

ing

cont

amin

ated

was

teoi

lsse

para

tean

dco

ntam

inat

edgr

ease

from

unco

ntam

inat

edgr

ease

)Q

uick

rele

ase

coup

lings

onst

orag

eve

ssel

sfo

rfa

cilit

atin

glo

adin

gan

dun

load

ing

Use

ofva

cuum

pum

psto

evac

uate

engi

nes,

gear

boxe

s,di

ffer

entia

ls,a

ndfix

edpl

antt

hrou

ghac

cess

(dra

in)

poin

tsSp

illco

ntai

nmen

tpal

lets

that

hold

2×

205

Lor

4×

205

Ldr

ums

for

tem

pora

ryst

orag

eH

andl

ing

equi

pmen

tfor

empt

yan

dfu

ll20

5L

drum

sfo

rim

prov

eder

gono

mic

s/ef

ficie

ncy

Use

prod

uctt

anks

that

have

inte

gral

seco

ndar

yco

ntai

nmen

t,va

cuum

gene

rato

rpu

mp

syst

em,v

acuu

mga

uges

(for

tran

sfer

sto

colle

ctio

nve

ssel

),bu

ndin

g(i

.e.,

toca

ptur

ele

aks

orsp

illag

es),

and

colo

urco

ding

tom

inim

ise

mix

ing

prod

ucts

Kee

ping

prod

ucts

tora

gear

eas

away

from

wat

erru

noff

Effi

cien

t(m

anua

l)re

fillin

gof

engi

nes

with

oilt

om

inim

ise

was

tage

from

spill

ages

Red

uctio

nan

dA

utom

atic

disp

ensi

ngof

grea

seto

spec

ified

lubr

icat

ion

poin

tson

plan

tto

min

imis

elo

sses

and

incr

ease

effic

ienc

yof

use

min

imis

atio

nU

seof

bulk

cont

aine

rsfo

rpu

rcha

seof

chem

ical

san

dpe

trol

eum

hydr

ocar

bons

Mob

ileoi

ldra

inin

gsy

stem

s(i

.e.,

tank

son

whe

els)

for

wor

ksho

ps20

5L

drum

funn

els

for

impr

ovin

gha

ndlin

gof

was

teoi

lsto

min

imis

esp

lash

ing

incl

udin

glo

ckab

lefu

nnel

sfo

rim

prov

edse

curi

tyfo

ren

suri

ngse

greg

atio

nO

iltr

ansf

ers

usin

gpu

mps

e.g.

,vac

uum

pum

pson

truc

ksto

avoi

dm

anua

lhan

dlin

g

246 T.F. Guerin

Tabl

e8

(con

tinue

d)

Stra

tegy

Exa

mpl

esof

tech

nolo

gies

,inn

ovat

ions

orpr

actis

e(s)

whi

chca

nbe

prov

ided

bysu

pplie

rs

Reu

se,r

ecyc

ling

and

reco

very

On-

site

oilfi

lteri

ngan

doi

llau

nder

ing

Reu

seof

was

teoi

lin

expl

osiv

espr

oduc

tion

(e.g

.,am

mon

ium

nitr

ate

fuel

oilo

rA

NFO

)R

euse

ofw

aste

gear

oili

nlo

wer

valu

eap

plic

atio

nssu

chas

chai

noi

lB

lend

ing

used

oili

nto

fuel

(e.g

.,us

ing

was

teoi

las

adi

esel

exte

nder

for

use

inbu

rner

sor

indi

esel

engi

nes

and

indu

stri

alan

dsp

ace

heat

ers,

whe

reap

prop

riat

e/al

low

able

)R

epro

cess

ing

(off

-site

)of

used

oilt

opr

oduc

eba

seoi

l(hy

drau

lican

dge

aroi

ls)

Tre

atm

enta

nddi

spos

alSe

para

tion

and

reco

very

ofoi

lfro

moi

lyw

aste

wat

erT

reat

men

tof

oily

was

tew

ater

usin

gbi

otre

ator

sU

seof

com

post

ing

for

trea

tmen

tof

biod

egra

dabl

eso

lidan

dse

mi-

solid

was

tes

cont

aini

ngpe

trol

eum

hydr

ocar

bons

(suc

has

slud

ges)

Use

ofbi

odeg

rada

ble

cellu

lose

fibre

for

abso

rbin

gsp

ills

aT

hese

tech

nolo

gies

are

now

avai

labl

eco

mm

erci

ally

and

are

com

mon

lyus

edin

Aus

tral

iaan

dot

her

deve

lope

dco

untr

ies.


Integrating life-cycle considerations into the purchasing process at a minerequires a commercial decision by the supplier to provide the necessary resourcesand linkages with its mining customer to ensure the value of both products andservices is delivered. This should involve sharing of information between environ-mental managers or their equivalent between each organisation.

Corporate and or mine procurement groups and other critical decision mak-ers within mining companies may not recognise their role in implementing theenvironmental and sustainable development goals of their company in a commer-cial context. Procurement staff require training and awareness of these issues. Keyperformance indicators need to be set by senior mine management to emphasisethe importance of environmental or sustainable development concerns or values inpurchasing decisions.

It is this last point that presents a challenge to the conventional negotiation pro-cess, and is currently the major hurdle to mining companies obtaining potentialvalue from petroleum hydrocarbon suppliers. It is also this point where there areconsiderable opportunities for improvement. Much work is yet to be done to edu-cate supply and procurement staff to the business value of close engagement withsuppliers. Both suppliers and mine staff need to take time to broaden the relation-ship between their organisations so that opportunities to improve the environmentalperformance of the supply chain can be explored more comprehensively for theirparticular mining operation.

5 Conclusions and Recommendations

In relation to sustainable development in the mining industry, suppliers have a piv-otal, though often unrecognised role in enabling mining industries to achieve theirgoals. Suppliers can enhance sustainable mining practises by helping operationsbecome more efficient in their use of supplied products and input resources; thisleads to improved business as well as environmental performance. In particular,petroleum hydrocarbon suppliers can help drive mining company performance toreduce fuel and lubricant use and therefore costs, to optimise the value gained fromthe supplied products, and to extend the life of products, and to ensure used productsare recycled or reprocessed efficiently. Suppliers have specialised knowledge, andthere are numerous examples of how they can assist mining customers throughoutthe life of the supplied petroleum hydrocarbons. A survey we conducted under-scores the important perceived role of suppliers to the mining industry in relation tosustainable development and corporate responsibility objectives.

Opportunities for improving petroleum hydrocarbon management at each stageof the life-cycle will require close interaction between the supplier and the respon-sible mining operations and corporate personnel. To ascertain the potential benefitsfrom any or all of the above stages of the petroleum hydrocarbon life-cycle at a mine,focused assessment across a mine is the first step. While there are numerous oppor-tunities for a mining operation to enhance its own move towards sustainable devel-opment in relation to petroleum hydrocarbons, there are real barriers entrenched in

248 T.F. Guerin

the way in which suppliers are currently engaged. These barriers will need to beovercome before the benefits of closer engagement with suppliers, to sustainabledevelopment will be realised.

The author’s recommendations for overcoming these barriers are:

• Increase the time planned for and dedicated to engagement between suppliersand mining companies. This should be linked with a focused engagement sessionbetween each major supplier and mining company to identify opportunities.

• Establish key performance indicators for supply and procurement personnel toensure they are systematically exploring opportunities to incorporate environ-mental improvements into purchasing decisions.

• Proactive engagement needs to be undertaken by suppliers to ensure that miningcompanies are aware of the opportunities for improving environmental perfor-mance of their supply chain.

A relatively small investment in time and resources to engage with suppliersthrough engagement and planning sessions can provide a useful platform for identi-fying, discussing, and developing joint actions to address issues that directly affecta mining operation’s objectives for sustainable development and corporate respon-sibility.

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