A BUSINESS CASE FOR COLLISION AVOIDANCE TECHNOLOGY

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1 SOLUTION REPORT A BUSINESS CASE FOR COLLISION AVOIDANCE TECHNOLOGY INTRODUCTION Collisions involving mining equipment are a significant concern for all mining operations. Most often these incidents result in damaged equipment and downtime for repairs. However, severe incidents can involve injuries and even loss of life. New legislation also reflects these concerns as rules are proposed in many countries that will require collision avoidance technology at mine sites. Technologies have been developed to help prevent these incidents and studies have been conducted to determine the effectiveness of existing systems, the costs associated with implementation, and the long-term benefits for mining operations.

2 This article provides a condensed analysis of implementing SAFEmine s Collision Avoidance and Traffic Awareness System at a typical surface mining operation. Today, the system is running in over 20,000 mining vehicles in more than 45 mines worldwide. Regarding a reduction of collisions, many mines report significant improvements. Maintenance Superintendent at the Premier Mine in Western Australia reported, Premier had a 53% reduction in metal-tometal contacts within the year following SAFEmine full implementation In this report, real costs (in USD) associated with collision incidents have been extracted from industry to illustrate potential returns on investment that can be realized if even a single major incident is avoided. The impact of a serious injury or fatality at a mining operation is widespread. Long after the formal investigation has been completed, the workers, families, surrounding communities, and the mining company continue to feel the effects. Thus, not all direct and indirect costs associated with an incident can be accurately quantified in this kind of analysis. Additionally, other benefits can be realized that are difficult to quantify here, such as increased productivity, competitiveness, and profitability. Despite these limitations, the following analysis illustrates clear benefits associated with implementing the SAFEmine system. Cost of Incidents: The following cases illustrate potential costs (in US dollars) associated with collision incidents. The specific incidents are hypothetical, but costs are derived from actual incidents reported to industry or governmental agencies in various countries. Case 1: A surface gold mine has an incident in which a haul truck backs into another haul truck in a parking area (dump body strikes cab). There are no injuries. One truck is down for repair for 5 days (10 shifts). This mine averages 1 incident per year. Cost of repair $200,000 Lost production $660,000 Total per incident $860,000 Total over 5 years $4,300,000 Case 2: A large surface coal mine has an incident in which a haul truck backs over a light vehicle. There is 1 fatality. Mining operations stop for 2 days for an investigation. This happens once over a 5 - year period. Loss of vehicle $40,000 Lost production $9,120,000 Cost of truck repair $120,000 Fines 1 $240,000 Cost of fatality 2 $9,500,000 Total per incident $19,020,000 Case 3: A surface coal mine in a hot climate is experiencing premature tire wear and tire failures on haul trucks. It is determined that several trucks are traveling faster than recommended, causing tires to overheat and delaminate. This occurs approx. 4 times per year and results in 2 non-injury collisions between haul trucks in a 5 year period. Tire replacement $50,000 Lost tire life $20,000 Lost production $10,500 Total per tire incident $80,500 Cost of truck repairs $400,000 Total over 5 years $2,010,000 Note: Costs were converted to USD for consistent comparison. Costs associated with injuries, fatalities, fines, and replacement equipment rental may vary between countries. 1

3 THE SAFEMINE SOLUTION: The SAFEmine Collision Avoidance and Traffic Awareness system provides vehicle and equipment operators with information concerning the location of nearby vehicles and provides an audible alarm if an approaching vehicle is on a collision course. The system monitors the full 360 around the vehicle and vehicle locations are indicated on an LED display (Fig. 2). Figure 2 SAFEmine LED display showing vehicle locations and distances (e.g. green LED indicates a vehicle to the left at 100 m, red LEDs indicate vehicles behind and to the right at 50 m). Using satellite positioning technology (GNSS), the system determines the location, speed, and heading of the vehicle in which it is installed, and transmits this information to other nearby vehicles, along with vehicle ID, using a peer-to-peer radio network. Sophisticated algorithms constantly monitor vehicle traffic to determine if a collision is likely. An audible alarm is generated only if two or more vehicles are at high risk of collision, which greatly reduces nuisance alarms. SAFEmine TRACK is an optional service that provides real-time tracking and monitoring of vehicles via a web-based interface viewable on computer, tablet or smartphone. Vehicle location and status are transmitted to a central server via a cellular (GSM) or WiFi network in the mine. Managers can receive instant messages or s concerning a vehicle s status (e.g. location or speed) and summary reports can be generated on a weekly or monthly basis. This is particularly useful for monitoring vehicle over-speed events. The standard SAFEmine system consists of: 1) an antenna unit that houses the GNSS, radio, and WiFi antenna (Fig. 3, top), 2) the main processing unit and receiver (Fig. 3, left), and 3) the remote LED display with traffic indicators (Fig. 3, right). Components can be installed on a light vehicle in 2 hours, on a heavy vehicle in 4 hours, and on a shovel in 8 hours. Contractors or visitors can temporarily install the Quick Mount Unit on their vehicle s roof in less than a minute as they enter the mine. 2

4 The total cost of the system takes into account hardware, installation training (mine staff are typically trained to install and maintain the system), installation accessories (brackets, cables, and connectors), warranty options, and yearly support agreements. The following pricing example is for a medium-sized mine. Figure 3 SAFEmine system components Additional options for the SAFEmine system that are not included in this price example, but offer additional safety and productivity benefits, are: 1) SafetyCentre for trucks and ShovelAssist, which integrate cameras, radar, and the GNSSbased collision avoidance functions into a single touch-screen display, and 2) TRACK, a web-based service that provides real-time vehicle tracking and reporting. Total hardware, installation, and training (one time cost): $1,139,000 Total recurring costs per year (support, spare parts): $130,500 Total investment over 5 years $1,791,500 3

5 System Performance: Measuring the effectiveness of the SAFEmine system in reducing collisions is best accomplished by comparing the number of incidents before and after implementation of the system. Operator surveys can also be an effective tool for measuring system acceptance and usefulness. As an example of measuring a reduction in incidents, a large mining company in Australia reported their results at the 2014 Queensland Mining Industry Health & Safety Conference. In the 12 months that preceded the SAFEmine system, the mine experienced 14 machine-to-machine incidents. After SAFEmine was implemented, there were only 2 incidents at the mine site over the next two years. For these two incidents that occurred, the first involved a rented dozer that was not fitted with the SAFEmine system, thus, the other vehicle was not able to detect this dozer. In the second incident, the system alerted the operator but he failed to take evasive action. A mine can also use this data and the improved safety record to negotiate lower insurance premiums, further reducing cost. As an example of using operator surveys to provide feedback on system effectiveness, a major mine in South America showed that 98% of the 521 operators believed that SAFEmine CAS is a useful tool for keeping them and their colleagues safe. Moreover, 97% say that the information presented on the collision avoidance system is sufficient and easy to interpret. Finally, in operations that have implemented speed monitoring, reductions in vehicle over-speed events have decreased. Both the in-vehicle alarm and the TRACK reporting services are effective in keeping vehicle speeds under the required limits. Using area definitions, the speed limits can be adjusted for different areas of the mine, e.g. haul roads can differ from access roads. In a demonstration at a Canadian coal mine, there was a 54% reduction in all over-speed events in the mine, and a 100% reduction in events where vehicle speed was 10 kph over the speed limit. 4

6 ROI Analysis: The following analyses are based on the cases outlined previously and assume similar fleet size and implementation costs for the SAFEmine system and ongoing cost of ownership. Also, for simplicity, a short term (non-discounted) ROI calculation method was used. Case 1: If a medium-sized mine averages one non-injury backing accident per year involving two haul trucks, total cost could be $4.3M over five years. The total investment for SAFEmine technology over five years is $1.8M. Because the technology has the potential to eliminate these types of accidents, the total savings to the mine is potentially $2.5M over this period. The return on investment (ROI) is calculated as (4.3M 1.8M)/1.8M = 1.4 or 140%. Case 2: Because this accident results in a fatality, it is the most drastic of the case studies with potential costs approaching $20M. The benefits of eliminating a collision that relates in a fatality are obvious, but this serves to illustrate that the investment in a collision avoidance system makes financial as well as moral sense. Case 3: The CAS speed monitoring and alarming functions reduce over-speed events by 90% in this example. This results in a cost savings of $1.85M over five years, including two avoided collisions. With the investment in CAS, the mine breaks even in approximately 5 years (ROI=0.03), or less if other incidents are avoided. 5

7 Summary: With over 20,000 systems installed at 45 mining operations world-wide, SAFEmine s intelligent Traffic Awareness and Collision Avoidance technology significantly increases safety for operators of all types of equipment and light vehicles. Effectiveness of the system has been proven through comparison of incident rates before and after installation, along with documented changes in operator behavior. An analysis of costs of vehicle incidents versus the cost of SAFEmine implementation shows tangible benefits of protecting workers and vehicles with this technology, often with very short payoff periods. Companies committed to safer surface mining turn to SAFEmine, the leader in Collision Avoidance and Fatigue Monitoring systems, delivering extensible solutions that save lives. SAFEmine is part of Hexagon Mining, the only global provider of surface and underground smart mining solutions that integrate design, planning, and operations technologies for safer, more productive mines. Hexagon Mining unites SAFEmine with industry leaders Devex Mining, MineSight, and Leica Geosystems Mining for a global network of talented mining professionals, delivering technology, service, and support. It s the only company to solve surface and underground challenges by integrating design, planning, and operations technologies for safer, more productive mines. Hexagon Mining: Smart change for the life of your mine. For more information: info@safe-mine.com 1. United States Department of Labor, Mine Safety and Health Administration, Fact Sheet United States Department of Labor, Mine Safety and Health Administration, Federal Register Doc Learn more at hexagonmining.com all rights reserved 6