CASE STUDY – Over the past four years, by developing its kaizen capabilities and crafting a better approach to maintenance, a Turkish gold mine has significantly reduced its extraction costs.
Words: Selçuk Turan, Process Superintendent at Tüprag’s Efemçukuru gold mine, and Hüsrev Yaman, Senior Lean Coach at Lean Institute Turkey.
In 2011, with the economic crisis still biting, the price of gold peaked at nearly $1,900 per ounce. At the time, Tüprag (the Turkish subsidiary of Eldorado Gold) was commissioning the Efemçukuru site, hoping to start production as soon as possible. The first two years of operation were rather chaotic for us, with production performance dwindling and safety risks increasing. We didn’t even have enough space to move around quickly and safely, neither underground nor on the surface workplaces. By the time 2013 came, we knew we couldn’t keep working like that.
In that same year, the price of gold dropped to around $1,280, putting a strain on mining investments and mineral exploration budgets around the world. It was around that time that we turned to Lean Institute of Turkey for help to initiate a lean transformation.
Our goal quickly became clear: because no mining company is immune to the fluctuations in the price of gold, the only way for us to achieve continuous profitability would be to deploy precise, planned and disciplined cost control. Knowing this is a matter of life or death in our business, we decided to become a more robust mining enterprise by basing our culture and processes on the idea of continuous improvement. We wanted to become a model mine that ensures the health and safety of its workers and cares for the natural environment.
The foundations for lean at Tüprag were laid with 5S and visual management, which greatly supported our initial maintenance and kaizen activities as gold prices kept dropping. (We’d have the definitive confirmation of how good an idea lean was in 2015, when the price of gold went down to $1,050.)
As expected, the first Lean Awareness training sessions were met with suspicion and resistance. We got responses like: “We are Turkish miners, not Japanese carmakers”, “Mines are different, unique environments” or “You can’t apply 5S underground”.
Six months later, however, pilot projects and kaizen had begun to bear fruit and people started to realize that the philosophy they were resisting could actually help us to solve our problems. The application of 5S and visual management, for instance, resulted in a better-organized underground work area. In the meantime, the concept of “standard work” became part of the way miners talk every day. Upon seeing the first positive results, we decided to spread 5S across the whole site and to all departments: today, 5S audits are performed in 95 locations across Efemçukuru, both underground and on the surface.
Shortly afterwards, it occurred to us that becoming a “model mine” would take some time and that the journey would prove harder than we had envisaged. We realized that if we were to sustain our results and continue to improve, we’d need a fundamental shift in culture, habits and behaviors. In turn, we learned that this could only be achieved if our people bought into this change.
Bringing order to our processes and standardizing our work were important steps at this stage of our evolution as a lean company, as was our focus on comprehensively developing our people. If our mine was to be ready for whatever the market might throw at it, our people would have to be ready, too.
The value stream of gold can be illustrated with a circle. The process begins with drilling to detect gold ores, which are then scheduled for excavation based on the estimated “life” of the mine (in our case, the opening of galleries for each gold seam, 600 meters below the surface, were planned with precision around 10 years ago). Once the underground ore deposit is reached, the most value-adding part of the job begins, with different teams and equipment surveying, drilling, blasting, and transporting the precious metal to the surface in a cycle that continuously repeats itself. The ore extracted is then conveyed to a plant for beneficiation, a process by which its economic value is increased. Such facilities are closed-circuit plants that run 24/7 and perform crushing, grinding, classification, froth flotation, thickening and dewatering – all of this resulting in a final product called gold concentrate.
We can, therefore, identify two main phases of the mining process: labor- and equipment-intensive underground production and process- and energy-intensive ore beneficiation. At Efemçukuru, we decided to use TPM (total predictive maintenance) and early equipment management to solve our underground problems, while in the beneficiation plant we focused on autonomous maintenance, reliability, energy efficiency and management.
Underground, our Jumbo machines drill holes in the ore face, in which we then insert and blast the explosive. The blasted ore and mine rock is then transported to designated areas, while cement is used to fill the void created by the explosion and to allow the next drilling cycle to take place. As far as this process goes, we were mainly experiencing two types of waste:
The equipment used underground tends to be at least three times as expensive as the machines deployed on the surface, with maintenance costs also much higher. However, this isn’t to say that production at the ore beneficiation plant didn’t need our attention. It is very important that all equipment in the plant is reliable and that it operates at a high OEE, but let’s just say that our initial situation wasn’t exactly like this. Up until then, our response to our maintenance problem had been to have a lot of spare parts available at all times (high inventory) and to deploy trouble-shooting crews who acted like firefighters running all over the place.
After lean was introduced, however, our approached changed dramatically:
Kaizen was instrumental in tackling Tüprag’s challenges, but it’s certainly not the only element of a lean transformation we have been relying upon. To ensure the creation of teams well-versed in problem solving, we focused on the developing of lean leaders in our internal Academy. Our team leaders can now manage both normal and abnormal situations in health and safety, production, quality and cost during the daily asakai meeting. These days, A3s are routinely used at every level in the organization, while our full-time online production control and monitoring system helps us see production parameters instantaneously, detect problems and quickly adopt correcting (or preventive) measures.
The transformation that took place at Tüprag in the past four years is nothing short of a revolution. It is much more than just the sum of a few innovations, technologies and investments, however: what we have witnessed is a structured, purpose-driven effort to unleash the creativity of our people and develop their capabilities.
Lean wouldn’t be lean if it didn’t benefit everyone involved, including the community around us. This is why our improvement work has not been limited to the mine. Indeed, we have been supporting good farming practices in neighboring villages, vineyards, fruit gardens and agricultural enterprises. We are also supporting cultural activities provided in schools in our area (like painting contests and excursions). Much like we extract gold from rocks, we are tapping into our people’s potential to create a better future for everyone in and around Efemçukuru.
Selçuk Turan is Process Superintendent at Tüprag Efemçukuru Gold Mine (a subsidiary of Eldorado Gold), working as a Lean Management Coordinator for the past four years.
Hüsrev Yaman is a Senior Lean Coach at Lean Institute Turkey. He has supported the lean transformation at Tüprag for four years.