While the Australian mining industry continues to take steady steps towards recovery moving into 2017 and beyond, companies are beginning to change their strategies to adopt more cost effective methods to maximise their use of machinery during peak and off peak periods.
With rising capital and maintenance costs, mining companies have moved towards a culture of flexibility and agility to survive in a very competitive market.
Technovia’s Global Mining Equipment Rental Market 2016-2020 report demonstrates how the high cost of capital, overhead costs, and maintenance costs attached with the ownership of mining equipment have led end-users to rent mining equipment.
According to the report, it is a shielding strategy that companies adopt, where they go slow on new explorations, cut down expenditure, and run tighter operations in order to maximise the potential of current projects. Such strategies protect them from the impact of declining commodity prices, expensive operations, and increased energy bills.
For companies, the option of renting mining equipment is a cost-effective alternative to owning such equipment, especially for short duration projects. Many successful companies balance their core fleet with rental equipment that is needed for specialised projects or for a short duration.
Companies with limited capital but a growing number of projects can use rental equipment in order to capture new business to protect their available working capital.
There are also other options to improve efficiencies and control costs such as supplier consolidation, outsourcing work to contractors, preference to casual employment contracts vs full time contracts, collaboration with competitors and suppliers in similar industries, collaborative consumption and the sharing of resources.
Indirect costs should be considered when calculating the Total Cost of Ownership (TCO). Some of these include the cost of capital (money tied up, reduced financial flexibility), maintenance planning and scheduling, training and development of personnel, equipment warehousing and office facilities (equipment – warehouse, personnel – office, vehicles, IT infrastructure).
However, it is important to be able to have a complete and holistic grasp of the savings potentials in a business and consultants such as Dräger who provide services that include spotting and calculating all indirect factors into the TCO, making a company see potentially better methods to reduce TCO – through renting or hiring.
In addition, Dräger’s rental and safety service helps businesses meet their changing staffing and equipment needs while giving sound TCO advice to manage their processes from start to finish.
They deploy highly trained staff in accordance with client needs; provide safety equipment that can satisfy any business requirement; and provide training for employees once the company has finished their asset hire which means less downtime, lower costs or loss of productivity.
Furthermore, Dräger prides itself in having employees that have extensive experience in the relevant industries and thus able to bring learnings and best practices from their specialised fields to offer organisations the best in current and efficient safety compliance.