For the aficionado of mining case histories, there is a venerable cornucopia on the Proudfoot Consulting website. Here is an edited version of one they recently sent us:

When you next grab a stainless steel fork or recharge your cell-phone battery, there's a reasonable chance that the nickel content in these everyday items originates from the Indonesian island province of Sulawesi, an hour's flight north of Bali. Sorowako, Indonesia, is home to the world's largest open cast Nickel mine, operated by Canada-based Inco Ltd, a Proudfoot Consulting client.

"Sorowako is more than just the world's largest mine of its type, it's also a processing operation for Nickel laterite. There are four electric arc furnaces, a hydro-electric power plant, sixty 100-tonne trucks and a whole host of other mechanical equipment that we depend on to keep production moving. " says Mike Sylvestre, President, Manitoba Operations at Inco.

With several thousand regular employees, including 350 supervisors, and another couple of thousand contract workers, Proudfoot's Jon Wylie started by working with supervisors, equipping them with skills in 'active' management. It costs Inco about USD 400 million per year to run the large-scale operation so naturally there were many areas where expenses piled up. Jon and his team picked a few of the biggest cost areas and worked out ways to reduce them.

The results have delighted Inco, with record production levels achieved successively for the last three years. Nickel production in 2004 was 154 million pounds. A year later it leapt to 168 - each man-shift producing 25% more than before. A major expense for Inco was the cost of heavy fuel oil, which leapt from USD 29 to 50+ a barrel in just one year. The oil is used as fuel in giant drying furnaces, which in turn are used to remove moisture from the mined ore.

"One of our focus areas is to reduce the moisture content of the ore before it enters the furnaces," explains Proudfoot's Arnold Orlina. "The ore going in can have up to 40% moisture content and we aim to get that down significantly to save on furnace heating costs. With oil at record prices, just a small reduction in use translates into a big cost saving. We've also ensured that furnaces are fully loaded on a consistent basis, so all fuel is used efficiently; it's all about managing consumption and reducing variability in this and all other activities at the mine."

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