Investigating the financial impact of energy losses due to pump efficiency degradation in South African deep mines

MBA, North-West University, Potchefstroom CampusThe high operational cost associated with electricity consumption is a growing concern for deep-level mines in South Africa. The mines use high-demand equipment like pumps, compressors, ventilation fans and refrigeration plants to maintain safe working conditions in the mine. One of the key operational components of deep-level mines is the pumping system. Due to the extreme depths of these mines, high-performance pumps are required to dewater the mines. The high volumes of water being pumped from these extreme depths make the pumping systems one of the largest electricity consumers in the mines. Due to the high reliability of the multistage pumps used in the mining industry, little attention is given to the efficiency degradation of these pumps. The degradation rate of pumps is dependent on multiple factors and is therefore nearly impossible to predict. The degradation of pumps increases the electricity consumption of the pumps since the conversion from electrical energy to hydraulic energy becomes less efficient. More electricity consumption leads to higher operational costs for the pumps. Improving the effectiveness of water and energy use is a key objective for the mining industry in a time of high energy costs and growing sustainability concerns. The need to investigate the financial losses that occurred as a result of pump efficiency degradation becomes clear. A quantitive technical financial research study was conducted to determine the financial losses that occurred as a result of pump efficiency degradation. Primary pump performance data was gathered from the mine over a period of three years. A data-driven time series forecasting model was developed to determine the baseline operational cost of a pump station in a well-known deep-level gold mine in South Africa. The prediction model was developed from the information gathered from the baseline model, to predict the operational cost of the pump station, had the pumps been refurbished to the original efficiency. The two models were compared, to determine the financial losses incurred due to pump efficiency degradation. A total of R 3 million was lost over three years as a result of pump efficiency degradation of the nine pumps within the analysed pump station. From the results, it is clear that it is beneficial for companies to do condition monitoring on pumps, not only just for failure prediction, but also for monitoring financial losses. The least efficient pump in the pump station accumulated 50% of the refurbishment cost in only three years. The pump has been in operation for 18 years and was only utilised 7% in the three years. Therefore it can be estimated with a high level of confidence that the pump’s energy losses have far exceeded the refurbishment cost of the pump. It is recommended that deep-level mines implement performance measurement strategies on pumping stations, as significant financial losses can go unnoticed. The results from performance measurement can be used to improve maintenance strategies and pump scheduling. The financial losses relating to pump efficiency degradation will only become more significant with time, as efficiency decrease over time, and energy tariffs increase.Master