Why mining is turning its focus to end-to-end providers

Mining companies increasingly want to develop wide-ranging partnerships with suppliers and services companies to improve their operational performance. Australian Mining writes.

The ability to provide a broad end-to-end solution as a supplier or mining services company has come to the fore in the years since the commodities downturn.

Mining companies responded to these challenging conditions by changing their approach from the historical norm where they were more inclined to operate with a variety of industry providers.

Collaboration had not traditionally been a trusted strategy, meaning strong relationships with suppliers and mining services companies across a range of disciplines were often rare.

Encouragingly for the companies that support the miners, this attitude has gradually transitioned as operational strategies have focused on improving productivity.

Results of this shift are now being conveyed by the miners, particularly the major companies as they reveal outcomes to stakeholders.

Diversified miner Rio Tinto has identified more than $2 billion in productivity improvements in recent years through optimisation of maintenance strategies, partnerships with suppliers and improvements in mine processes.

As the industry moves further into a collaborative direction, many supplier and services companies have enhanced their offering to satisfy this demand.

Kal Tire’s Mining Tire Group, for example, has expanded in Australia through a focus on building a market position beyond the typical on-site tyre services business.

The Canadian company targets long-term partnerships with mining companies where improving their maintenance strategies and tyre management processes complements the traditional supply model.

As a recognised specialist in the tyre industry, Kal Tire has the advantage of being able to offer a range of products and brands for all wheel, tyre and supporting system requirements by tapping into a network of suppliers it partners with.

Kal Tire vice president, Australia, Darren Wilson says this network gives the company a unique level of independence to provide an end-to-end solution tailored for the specific needs of each mine site.

“By working closely with mining companies in more of a partnership relationship we are able to identify which product, or which brand, works best for them,” Wilson explains.

“It may be a product that the company might not otherwise know about or have access to. We think this independent approach adds value opposed to them being locked in to one supplier that provides a particular tyre, or wheel rim for that matter.”

Kal Tire balances this position as a supplier with growing on-site tyre services and tyre management presence, tyre repair facilities, training offering (registered training organisation) and various other options around operational consultation and support that adds further value to the end user.

Kal Tire has established a collaborative partnership with a leading iron ore miner in the Pilbara, Western Australia that incorporates several of these initiatives.

Four years after starting at the mine with just a small team providing on-site services, Kal Tire’s presence has grown significantly.

Aside from providing the on-site tyre services and management capability, they also are completing tyre repairs, sourcing new products and providing on-site consultation to the mine to help continually improve their tyre and wheel performance.

Kal Tire has not only improved the performance of the iron ore miner’s tyres, but has also maintained a strong safety record at the mine, with no lost time injuries since it started at the operation.

Wilson believes mining companies are increasingly looking to introduce collaborative partnerships like this at their operations.

“If you look at the rationalisation of this approach, they want to reduce the number of suppliers and services companies because there is an efficiency gain in doing that,” Wilson says.

“There is a lot of movement in the mining industry and companies want to maintain a relationship with fewer suppliers.”

Kal Tire also benefits from its international presence in Australia. Through its established network, the company communicates on issues affecting its mining clients.

The transparent nature of this globalised network provides a platform where multi-national customers in South America, Canada or Africa can share experiences with their Australian counterparts.

Kal Tire hopes to grow this collaborative approach by integrating its services even further, according to Wilson.

“We want to continue move away from the traditional, transactional type of relationship that doesn’t really value the benefits of collaboration,” Wilson says.

“As we become entrenched with customers and that relationship builds we gain the trust of that particular customer and we become part of that operation. Our aspiration is to be an extension for their operation and provide a value that is reflective of the miner’s qualities.”

If the growth of Kal Tire’s offering on an international scale is any guide then the company is on track to achieve this goal in Australia.

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