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Mining Process and SAP Solution

1.   Mining industry Overview


The industrial production and economic growth drives the demand both in domestic and foreign markets. High capital costs involved in the mining industry makes it vulnerable to ponder upon the volatility. The dip in the china‘s growth rate has made the key commodities like iron ore and coal to topple into the over-supply. Despite having weaker commodity prices the government is vying for their own pie and cost escalations adding the worse to it.

Rather than cost reduction and process improvement plans the miners must embark on the sustainable business environment. They might look forward to fully integrate the production and trading operations in order to generate rich end value and better price controlling.


2.   Minining industry challenges

  1. Due vast geographical presence mining company’s process are hampered by non-integrated and disparate business systems.
  2. Problem in consolidating processes and reducing the company’s global shared service costs.
  3. System landscape optimization and bringing all the applications on single platform.
  4. Employees facing challenges in quickly sharing and retrieving up-to-the-minute information, and ability to make timely decisions, while at the same time reducing costs.
  5. Process complexity in incorporating mergers or acquisitions.
  6. Increase in Commodity Values, Cost inflation , skill shortages
  7. Resource nationalization and securing financing

3.  Various Business Process involved in Ore Processing Mining Process.png

Pictorial representation of mining process.

Reference :


(1) Mining- It all begins with the Site Survey and Geological Benchmarking, where several rounds of Chemical Tests and QA Tests are performed to make sure ore grade is commercially viable.


(2) , (3) & (4) – Once the quality of the ore is assessed Drilling and Blasting is carried out followed by transporting the ore lumps to the crushing site by using excavators and wheel loaders.


(5) & (6) Crushing and Screening: The large blocks of Ore are crushed into small lumps. The Crushing takes place in multiple stages like Primary Crushing, Secondary Crushing and Tertiary Crushing. After each Crushing Process there is Screening Process to separate the specific order from Non-specific Material and few additives like Binding Agents and Cleaning Agents are mixed in the process. In the final Stage of Screening i.e. Pre-Loading stage the Ore lumps are segregated according to their sizes.


(7) Large Conveyor Belts are used to move Crushed Ore from Screening Plants to the stockyard and stocks are being segregated based on the lump size.  And later they are transported to port stockyard for shipment.


(8), (9), (10) & (11) loading: The Reclaimer or bucket wheel excavator is used to transport the ore stacks to SILOS and then they are unloaded into freight trains.


4.  SAP Mining Solution


Mining Industry Business processes can have implementation challenges across all SAP Modules like SD, FI and CO, HR, MM, Production Planning, Quality Management, Plant Maintenance and EHS.


The following business scenarios are mapped to SAP mining solution:



Module Functions/Concerns
Sales & Distribution        With or without Contract
       Export Sale Orders involving multiple currencies &  sales revenues accounted in local currencies
  • Material Management
  • Handling Procurement of Explosives for Blasting Operation
  • Handling Licensing/Government regulations
  • Tight integration with SAP EHS
Procurement cycle
       Subcontracting Cycle, Import Purchase, Scrap Disposal
       Issue of Tools and Explosives to Subcontract/Internal Production
Production Planning        Pre-Crushing processes mapped to Mining Plant, Crushing plants, Screening Plant and Loading Plant.
       Batch Production
       Usage of Batch Management with Batch Characteristics
       Make-to-Order , Make-to-Stock
       Planning with Final Assembly
       MRP generate the PR or Production orders or Subcontract Requests
Shipping and Transportation Planning        High transportation cost
       Road transport could be EHS(Environment Health and Safety)risk
SAP TM ( Transport Management)        Plan transportation, track orders, calculate transportation charges
       Subcontracting and tendering transportation services
Master Data        Material Master and BOM (multiple levels)
Quality Management        Qualitative and Quantitative inspections
Plant Maintenance        Health checkup of off-highway  Equipment like Hydraulic Shovels, Dumpers, excavators etc
       Preventive and breakdown maintenance for all Equipment’s
Environment and Health Safety        Industrial Hygiene and Safety component
       Creating risk assessments, recording and processing accidents/minor injuries
       Handling Standard Operating Procedures and Accident Reports


5.   Business Benefits


  1. Efficient Cost Management by accurate capture of production cost across operational processes and production data.
  2. Improved sales efficiencies by automatic price calculation and capturing metal exchange price fluctuations.
  3. Improved handling and consistent information right from the procurement to plant maintenance.
  4. Efficient management of  Purchasing,  commodity sales, and transportation
  5. Increase in the profits with better asset performance &utilization
  6. Better manage operational safety/risk, and compliance



6.   References:

Mining Process.png
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