Top class production capacity mining company in Indonesia, KPC. Hitachi Construction Machinery's mining products are supporting that productivity. However, the beginning was not smoothly. In order to maintain a high operation rate, strengthen the support system together with KPC. Eventually, finaly built mutual trust.
Along the eastern coastline of Kalimantan, Indonesia sits the small city of Sangatta. The area surrounding this bustling industrial city, stores amounts of Thermal coal and at the heart of this resource development is PT Kaltim Prima Coal (KPC).
KPC's history goes a long way back. It started in 1970, when Conzinc Riotinto of Australia (CRA) through its subsidiary, Rio Tinto Indonesia came to an agreement with British Petroleum (BP), to collaborate in coal exploration activities in Indonesia. However it wasn't until 1982, that KPC was established. That year, KPC signed the Coal Contract of Work (CCoW) with the Indonesian government through PT Bukit Asam (PTBA). Between 1982 and 1989, KPC was involved in rigorous exploration and construction activities until commercial operations began in 1991. Now, the production has skyrocketed 9 times comparative with initial commercial operation, making KPC the 8th most productive mining company in the world and No.1 in Indonesia.
It is a combination of exceptional quality and well-formed strategies that has allowed KPC to build its excellent reputation in the market place. According to Mr. Ashok Mitra, the Chief Financial Officer of KPC, the company has focused its sales on the end-users instead of traders. "The more you meet the customers, the more you're able to explain to them that they're buying consistent high quality coal. Our main goal is to provide assurance to our customers on the security of supply and quality."
Another principle that has driven KPC's success is sustainability. For decades, KPC has implemented "Good Mining Practice", including post-mining reforestation and rehabilitation. This commitment, along with its implementation of good corporate governance, has earned KPC the recognition as Indonesia's most sustainable mining company.
Mr. Ashok Mitra
KPC started to evaluate Hitachi Construction Machinery's (HCM) machines for a commercial operation in 1989. "At that time, manufacture's of ultra-large sized hydraulic excavators were quiet limited in the Indonesia market" Mr. Untung recalled. As well as high performance based on machine specification, support services were equally of primary importance to confirm the correct chioce. Unfortunately, there was no manufacture's dealers providing in country direct service at mining sites for ultra-large hydraulic excavators with a record of maintaining a high level of equipment availability hence stable operation was an initial concern for us.
KPC proposed a 50,000-hour FMC /Full Maintenance Contract to HCM, a new concept that HCM had never tried before. In response, HCM suggested products and services such as an operational rate based on the successful UH801 in North America, highlighting the economical and efficient benefits of HCM's machines, supported by the existing after-service structure. In the end, the cost-effectiveness was accepted as HCM's advantage, Leading to orders for a total of 12 machines including EX1800 an EX3500 in Christmas that year.
The shipment for the machines started in August 1990 from HCM Tsuchiura Factory Japan with the first unit in operation by January 1991. The early days of the mine site bought several challenges starting operations in a tropical environment. For example there was no maintenance office and the rainforest climate provided temperatures reaching 40+ degrees Celsius with high humidity and sudden heavy rain showers. To mobilize each unit component, had to be disassembled further due to weight restrictions of the unpaved roads. Engineering staff from Tsuchiura Factory visited the site to take the lead and oversee assembly at site.
Mr. Untung Prihardiyanto
By the 2nd year, we became fully of the difficulty with operating fleet maintenance. Machines should operate in three shifts over 24 hours with refueling, lubrication, and condition inspections being done within 30-minute daily windows.
Although on-going training sessions were conducted for the service technicians, there were unforeseen problems such as daily maintenance overruns, service inspection oversight and other delays based on inexperience.
This caused a significant drop in equipment availability and operation rate. As a result, KPC was extremely disappointed, demanding these problems be resolved immediately.
Operation Management was furious over this customer service, exclaiming "What is HCM is doing? Do they know what the after service is?"
Embarrassed we had to concede our inexperience in the scale of service support and resources but vowed to turn the situation around."
After that, the customer was supportive of HCM efforts to restructure site support through employing experienced Australian technicians to mentor national staff as well as investing in additional infrastructure,training, and equipment.
We worked diligently to secure a professional after service structure by reviewing and expanding the product training process, implementing better planning & increasing local staff to adequately cover a three-panel work roster establishing dedicated service, breakdown & overhaul crews. Thanks to the strong relationship and continuous support from KPC, we exceeded the target operating rate in 1993 and 1999, further receiving a customer letter of appreciation for the efforts made.
Moving forward, the service contract has been renewed for 100,000 operating hours. Mr.Untung says, "We can address any problem may that occur on site, fully understand each other, and maintain excellent communication". HCM's early model ultra-large sized hydraulic excavators are recognized by KPC for high operating rate and exceptional service quality. This has led to additional excavator orders and now a substantial Hitachi Mining Truck fleet on-site.
maintenance on site
The term "sustainability" and coal mining maybe an odd pairing. But here at KPC, we are committed to operating responsibly, hence our product – coal, can pave the way for renewable energy to flourish and society to sustain their way of life. We believe when coal mining is conducted responsibly, it can provide positive benefits to all stakeholders, moreover, the electricity generates for us to live in life and do our daily activities.
Due to the environmental problems such as global warming and CO2 emissions, now is the time to change globally how power plants should operate from using coal to the new fuel materials. At the turn of the changing era, we should lead an environmentally friendly procedure. Coal could be transformed into a wide range of purposes. For instance, Coal will be a gas, and the gas could become plastic. Just not providing coal for the power plants, but for something else. This new business model will move our industry forward.
On the other hand, as a mining operation, we must maintain both the living environment and the social environment. As part of KPC's post-mining procedure, we have zoning systems, such as a buffer zone, reforestation zone, economic-use zone, cultural zone. An appropriate zoning system enables us to use the mining site for economic activities such as aquaculture, cattle farming, or chicken farming even after development drilling. Our priority is to make sure that KPC maintains the highest corporate governance and to achieve the goal of 100% sustainability. In fact, KPC has awarded as one of the best sustainability companies in the mining sector.
As technology drastically becomes more advanced, KPC has been focusing on optimizing the whole operation process. Therefore, KPC believes that HCM and PT Hexindo Adiperkasa Tbk (HAP) should meet customers' demands by actively contributing to their business process.
Mr.Untung says, "In order to support the optimization for the whole operation, HCM should engage further in advanced digital technology. Specifically, expand the areas where service is covered by solution based programs such as Fleet Management System: FMS. We have 16 mines operating in different locations overall, if we could monitor each machine in operation in real-time matter via interactive networks, it would be beneficial to better to predict failure on major devices and effect replacement before break down. By doing so, we can reduce the Life Cycle Cost: LCC. In the future, what we expect from HCM/HAP, not only providing new machine models and parts but also an "integrated system" utilizing digital technology & interoperability to connect all machine networks and operating systems, without falling behind customers' change in business model and environment management.
Additionally, he says, "We'd like to continue our great relationship with HCM/HAP for further growth and mutual benefit KPC has high expectations for the next level of HCM solution services "Solution Linkage".
KPC won 10 ISDA 2019 Awards
|Operating weight||328 t|
|Engine rated power (Ps/rpm)||842/1800×2|
|Feature||EX3500-1 loading shovel is developed to adapt 100-150 ton rigid dump haulers which are quite popular at mining sites. In order to achieve large production volume, it applied "twin high powered engines", and "newly developed high-pressure and large volume hydraulic components. This model adopted triple roller tye swing bearing. For under carriage, it has shovel-type under carriage and induction-hardened cast steel track shoes which could extend its lifetime. Equipped with auto lubrication system and centralized lubrication system, serviceability was improved.|
EX3500 operated over 100,000 hours is waiting for re-work at mine site
[Location of Sangatta]