visibility and control over fuel costs: Fuel Management in Mining

Posted by Reza Tavassoli on 1-Mar-2019 7:31:00 AM
Reza Tavassoli

Pay Attention, Or You'll Pay!

man Texting While DrivingI was planning my budget the other day and thinking about how much gas I used for trips to and from work, to do groceries, to the gym, to go on weekend outings with friends and family, and I realized that other than the mileage on my odometer, I didn’t really track where I spent on fuel each week; much less for each month, or year. I suppose if I knew, I’d be a little shocked, and I’d also be a little more careful about what I paid for gas, how I operated my car, and how many trips I made each day. The truth was, I only had a vague idea about my gas spending behavior and I probably wouldn’t even see if my changes made any significant difference or not to my single-car usage. Then I thought about my clients. 

            What if you had 10 vehicles to gas up daily or 50? And not just your ordinary family car or SUV, but gas-guzzling mining haulers. Monster trucks weighing 400 tons or more get next to zero kilometers per liter. Many of our mining customers run the big ones that use as much as 350 liters an hour, and they run practically 24/7, 365 days a year! The numbers started running through my mind, and the statistics often quoted by many of the fully-integrated Fuel Management System suppliers became astounding, especially when considering the ever-increasing fuel cost. For customers who switched from a traditional manual data collection scenario to an automated FMS solution, some of the significant challenges around fuel were quantifying the precise level of fuel consumption, gaining visibility of fuel, mismanagement of fuel and reconciling between fuel slips and fuel usage. 

That Money of Mine!

            Haulage can be the single most extensive energy-using activity for a mining operation, accounting for about 30% of a site’s total energy consumption. Consider the Canadian average for diesel is currently $1.22/l, so a mining fleet of 100 trucks could spend about $374 million annually. Diesel fuel typically accounts for between 3% and 10% of a mine’s total operating expenditures. Keeping the percentage as low as possible means big bucks, and knowing where your fuel goes is necessary for profitable operations. The adage “you can’t manage what you don’t measure” seems to be an appropriate summary of the challenges when trying to control fuel costs. 

            Fortunately, single-car drivers don’t have this dilemma, but that’s precisely what mining operators must contend with. As hard as it might be for me to track and control my personal fuel costs, imagine how difficult it must be on the scale of a busy, highly complex, fully operational mine. Thankfully, there are solutions to the problem that will shed a clear light on the situation and show where to cut fuel costs. With a well-designed fuel and fleet management system (FMS), you can squeeze meaningful savings out of every drop of diesel fuel you pump into your monster trucks and other fuel-guzzling assets. From advanced telemetry and RFID technology to identify who, when and where fuel is being used; to software applications and user-friendly dashboards that facilitate your data analysis, there’s no reason to stay in the dark and let that precious commodity go unaccounted for or be used inefficiently. 

Spend Money to Save Money

Piggy Bank with a sign saying - Spend Save            FMS Solutions are widely used across industrial and mining sites to alleviate errors inherent in manual processes, security issues and inefficient operations in refuelling, all of which lead to reduced profitability. According to fuel and energy giant British Petroleum: “There are several advantages of using electronic fuel management systems over manual systems, as they increase the accuracy of data collection, reduce labor costs, and increase the security of fuel access.” Integrated FMSs provide greater accuracy when tracking fuel usage per vehicle or driver, giving fleet managers a better understanding of where & how their fuel is being used and if it’s being used optimally. Fully integrated systems, like SM2, also allow for the production of reports, including asset fuel transaction reports; site fuel usage reports; tank inventory reports; fuel stock reconciliation reports; and preventive maintenance analyses. An added bonus is a reduced environmental footprint because the electronic systems monitor fuel loss through leakage and aid operators in recognizing the potential problem and halting the leak before fuel is lost and environmental damage is caused. This has a direct impact on insurance costs, labor and health expenses, as well as giving potential extra access to green funding. 

            Heavy industries worldwide are at a turning point, competing against decreasing demand, declining commodity prices, and evaporating capital project budgets. Industry players are faced with choosing smarter, cost-effective ways of running operations while gaining a competitive advantage. Asset-reliant industries, like mining, construction, manufacturing and logistics, inherently rely on heavy industrial fleets that run on diesel. Fossil fuel consumption puts significant pressure on the bottom line. Furthermore, health, safety and environmental (HSE) regulations, irrespective of industries, are increasingly stringent, putting diesel-powered vehicles under the regulatory microscope. An integrated FMS, like Coencorp’s SM2, provides possibilities for reducing diesel consumption using various dedicated hardware peripheral devices and an integrated end-to-end modular platform that provides the tool for optimizing equipment operations and reducing instances of pilferage and carbon footprint.

Keep Your Eye On The Ball: Here's The Eye! 

Binary Data Eye            Our systems capture the essential information for tracking the equipment, its health and operating conditions, and fuel consumption. While GPS is used for locating an asset in the field, sensors embedded in the asset can:

  •     Monitor engine on/off status, odometer reading, and so on for field equipment, including remote generators
  •     Capture equipment health and operating parameters such as engine temperature, tire pressure, payload, speedometer reading, road-slope
  •     Accurately gauge fuel levels

Data captured from the sensors is collected in real time through gateway devices and is filtered, processed, and stored on a user-friendly platform. Analytics runs on fully integrated modules correlating various data points to provide meaningful insight. For instance, if a vehicle is stationary for 10 minutes, its GPS coordinates have not been updated. At the same time, if the engine status is also on, it means that a machine is running idle and wasting fuel. The dashboard gives the visual for real-time operations, where various KPIs are monitored, and accordingly, actions, such as sending out alerts or communicating with the equipment operator, can be triggered. Moreover, the system can generate various reports, such as:

  •     Production vs. fuel consumption
  •     By operator and vehicle
  •     By shift (summed up for all equipment to measure any shift-wise variance)
  •     Fuel consumption factors analysis (for discovering whether high fuel consumption is dependent on equipment, operator, and other factors)
  •     Pattern analysis and daily refilling, consumption and pilferage records


Using a fully integrated FMS is more than common sense; it is the difference between profit and loss. Diesel is one of the most significant operating expenses for heavy machinery industries. As fuel prices increase, profit margins for these industries continue to erode. While hope and gradual implementation of more environmentally friendly electric equipment is being adopted, it is still far from replacing diesel-powered equipment. The current reality demands efficient solutions for managing diesel-run fleet assets. Innovative fleets using a combination of adaptive digital technologies that are well suited for remote and rough environments, integrated GPS, cloud, and real-time analytics that aid fleet managers and operators in making efficient decisions will benefit from solid and scalable solutions and become the industry's leaders. 

            For more information on the benefits of a fuel management system, please read our various articles on Coencorp’s Blog and feel free to leave any questions there or reach out directly to our support team. We'd love to chat!

Topics: fuel management, fleet management, mining