Vulcan Mozambique - 90 Day TOC Turnaround

Case Summary

• 01

  Challenges

  1. Losing about $12 million every month, with roughly three months to turn the operation around before the risk of shutdown became real.
  2. Operating system stretched from the pit at Moatize to washing, stockyards, a rail corridor of roughly 900 kilometres, port unloading and customer shipment.
  3. Only about 34 to 40 of 77 mining trucks available, a shortage of giant tyres having immobilised much of the fleet.
  4. Working trucks operating only about 14 hours in a 24-hour mine.
  5. Giant tyres at roughly $50,000 each against normal lead times exceeding six months.
  6. Metallurgical coal yield at the 50 MTPA wash plant at about 11 percent.
  7. Twenty-one trains circulating, yet a round trip taking about 100 to 110 hours.
• 02

  Our Work

  1. Made cash generation the immediate goal, evaluating actions by their effect on throughput, inventory and operating expense while keeping capital expenditure separate.
  2. Chose to increase throughput before cutting the organisation, with no mass layoff programme used as the turnaround lever.
  3. Linked the production plan to customer demand, making customer orders the reference for what should be mined, blended, washed and shipped.
  4. Concentrated executive attention on one constraint at a time, with weekly reviews on the single issue with the highest effect on flow and cash.
  5. Measured the complete rail circuit, which showed loading required about 58 hours against about 105 hours consumed at unloading.
  6. Reduced the active train fleet from 21 to 18 and positioned three rakes as buffers near unloading.
  7. Introduced predefined departure and arrival slots, detached engines where appropriate to create maintenance windows, and linked incentives to reliable train journeys rather than isolated speed.
• 03

  Results

  1. Monthly performance moved from a $12 million loss in February to a $54 million profit in April, reaching approximately $60 million in May.
  2. Train cycle time fell from about 110 hours to about 60 hours per round trip.
  3. Coal haulage increased 55 percent.
  4. Run-of-mine production rose from 2.2 to 2.7 MTPM.
  5. Metallurgical coal yield improved from 11 to 17 percent, against metallurgical coal carrying 3 to 4 times the value of thermal coal.