The latest venture by South African company VR Steel, the design, development and manufacture of truck bodies essential to massive open pit mining operations, is poised to develop into a multi-billion rand international industry.
The first step in the development of the company’s truck body prototypes was a trial and testing programme, in conjunction with Anglo American and Kumba Iron Ore, at Sishen mine in the Northern Cape. “Kumba purchased two VR Steel truck bodies for this purpose,” company founder and managing director John van Reenen says. “We did 2,700 hours work, about five months of operation with the new truck bodies, and there were no fatigue or workmanship problems at all. The results of this programme will impact strongly on three major future possibilities.
The mine has a fleet of 44 heavy-duty trucks which transport iron ore from the pit to the plant. “Some 35 of these vehicles will be requiring new bodies over the next three to five years, and it stands to reason that if our current trials are successful we must stand an excellent chance of securing this business. There has also been an expression of interest from Middelburg Mines.
” The involvement of Anglo American opens a door to other future business possibilities. “If one bears in mind the size and scope of the international mining giant’s operations, the number of trucks Anglo runs in its mining activities is huge. And almost every truck will require a replacement body at some stage.”
A VR Steel truck body costs about R2.5 million, which means the replacement of 35 truck bodies at Sishen will cost some R87 million.
The VR Steel truck body has several special features.
“Firstly, every mine has a different priority, and we design specifically for that priority. We’re the only company in the world that does that,” van Reenen says. “Does the truck have to carry very abrasive overburden or soft, does the mine want savings on tyre life, does it want maximum payload, and various other options?”
Secondly, VR Steel does a very detailed soil flow analysis, the first such comprehensive study on multiple size particles. “We take samples of about 10,000 different particle sizes, put them into truck bodies and study their behaviour to make a good even flow resulting in even distribution. The ridge in the middle of our design provides even disbursement, which gives the truck stability and brings the centre of gravity down, so the vehicle is less likely to topple.”
Another benefit arises from the fact that VR Steel manufactures its truck bodies from very high- grade, abrasion-resistant and high-strength Swedish steel. “This might be more expensive,” van Reenen admits, “but it brings the weight down.
“Typically, our bodies will be 10% to 15% more expensive than our competitors’, because of their curved design and expensive steel, and our challenge is to get the customers to understand the downstream benefits. Very simply, this engineered product ensures productivity, but it comes at a price. Our challenge is to refine the work down to a level where we can drop that 10% to 15% premium to below 5%.”
Van Reenen says that in the case of the current Sishen refinements the weight of the truck body had been reduced from 42 tonnes to 34 tonnes. “And we can bring it down to 30 tonnes if necessary. A 12 tonne saving enables the mine to carry 12 more tonnes of payload. The truck carries 200 tonnes, so that 12 tonnes represents a significant 6% improvement.”
Another major benefit of the VR Steel bodies involves lifecycle costs. “We have worked out that our truck bodies, based on present-day steel prices, cost about US$0.54 per hour, whereas a typical manufacturer’s body will cost up to US$1 an hour to operate,” van Reenen explains.
“That will cost the operator US$40,000 during the truck body’s average 40,000 hour, seven-year life, whereas our body will cost around US$20,000. And the Americans have told me about prices reaching as high as US$10 per hour in the case of ultra-lightweight bodies, which have to be replaced far more frequently,” he adds.
The progress VR Steel has made with its truck bodies to date has been strictly behind the scenes. “Now, however, we are in a position to start our international marketing campaign. On the one hand we have some definitive numbers on the board from our trials and we can quote and justify definite benefits; on the other hand there is already increasing interest locally and abroad. The international launch of our truck body was at the prestigious MINExpo mining show in Las Vegas in September.”
Van Reenen points out the huge international possibilities for the VR Steel truck body. “One is the BHP Billiton iron ore operation at Pilbara in West Australia which will need to replace some 150 truck bodies in the new few years. They are interested, and we invited them to visit South Africa.”
Other significant possibilities are the Rio Tinto iron ore operation, which also runs some 150 trucks at Pilbara; the Escondita mine in Chile – the largest copper mine in the world – which has a fleet of 200 heavy-duty trucks; and other extensive mining operations in countries such as Peru, Colombia and Bolivia, the United States, and various other operations in Australia.
“Our first targets would be Western Australia, South America and China itself, followed by the United States and Canada,” van Reenen predicts.
“But where we see our biggest future is in China, both supplying the Chinese market, and exporting from our operation there. We also see the next biggest future growth opportunity as India.”
Van Reenen says that VR Steel would produce truck bodies at its Chinese facility and ship them to such markets as Australia and South America. “This remains economic because the Chinese labour rate is so much cheaper, and the shipping is much cheaper and far more frequent.
“In the longer run we would look at additional manufacturing facilities in such places as Minnesota in the United States and Pilbara in Australia.”
As far as the future market for truck bodies in South Africa is concerned, a very rough estimate by van Reenen is that 100 new truck bodies and 100 replacement bodies will be required a year, which translates to an annual market of some R250 million.
In the international market, he estimates that up to 2,000 bodies for new trucks and another 2,000 replacement bodies will be required on an annual basis. This means international spending of anything up to R10 billion a year on truck bodies. These figures reflect bodies only for trucks of between 150 and 360 tonnes.
Against the background of these statistics, van Reenen predicts that the truck body aspect of his business will grow substantially in the next five years. “As far as truck bodies and our other products are concerned we are looking at exporting about 40% of our total production. But, sadly for the South African economy, I predict that within three or four years up to 80% of our production will be exported from our Chinese operation.”