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Issue Date: June 2007

EOH Industry Solutions automates metal accounting in mining

21 June 2007

EOH Industry Solutions and partners have developed a new automated metal accounting system for mining.
Accurate metal accounting has always been essential in mining. The introduction of standardised IT solutions to automate the process is, however, an ongoing process rather than discrete event. In the past, mining companies usually maintained a record of the metal value in terms of volume and grade via a series of spreadsheets. Getting an accurate realtime view of the value of metals-in-process along the value chain remained an unresolved challenge. As a result, metal accounting occurred a posteriori most of the time.
Mike Le Plastrier, director EOH Industry Solutions, explains that estimating the amount of metal during the different stages of refinement was done using a combination of experience, skill and sample measures values. It was, however, crucial for mining companies to obtain more accurate metal estimations in order to plan ahead and adjust production accordingly. “If the final outcome differs substantially from inaccurate estimates, it has the potential to affect a company’s balance sheet significantly with all the consequences you can imagine for JSE-listed companies. It is particularly critical for companies producing high value metal such as platinum.”
EOH Industry Solutions is currently working on a metal accounting project, in collaboration with Australia-based Mincom and locally based Csense Systems. The objective of the project is to create an automated metal accounting system with a single source of input and minimal human interaction. This system evaluates metal values directly from the base instruments, using an algorithm promising 85% accuracy. It allows for a direct overview of the metal values from the SAP ERP interface. Automating metal accounting using this system allows the metal to be evaluated at each stage of processing through the plant, and enables production adjustments to be made more quickly. Companies consequently get a better picture of the value variations throughout the production stages – from when the metal is brought to the surface, crushed and smelted, to when it finally comes out of the refinery as a precious metal. Most importantly, it removes the plethora of spreadsheets traditionally associated with Metal Accounting.
Platinum producer Lonmin was one of the first companies to implement this new automated metal accounting programme in South Africa. “They have been the early leaders in this field and have shown excellent vision as to where they want this to take them in the future,” says Le Plastrier. This is clearly not an easy road as it requires very tight coordination between IT strategy and business strategy.
“The most advanced mining companies are increasingly recognising that incorporating advanced IT technology into daily practice helps them grow stronger financials,” observes Le Plastrier.

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