HITACHI CONSTRUCTION MACHINERY

Hitachi is making a huge impact on the mining industry in South Africa. This is being driven by Hitachi Construction Machinery Southern Africa (HCSA) and the quality and growing reputation of the manufacturer’s rigid dump trucks and large excavators. We dig deep into the country’s coalfields to find out how Hitachi has accumulated such vast reserves of market knowledge and expertise.

Coal is the most widely used primary fuel in the world. South Africa is a typical example with 77 per cent of its primary energy needs provided by “black gold”. The country has the world’s seventh largest output of recoverable coal reserves (286 billion tonnes in 2005).

This huge demand is unlikely to change with the lack of suitable alternative energy resources. Many of the coal deposits in South Africa are relatively shallow with thick seams, which make them easier and less expensive to mine. Stripping ratios are also high and the cost of mining is controlled by good mining practice. As a result, a large coal mining industry has developed and this has been a major stimulus to the country’s economic growth and industrialisation.

South Africa’s coal is obtained from over 60 collieries which range from the largest in the world to small-scale producers. There are an equal proportion of open-cast and underground mines, but with a high concentration on the six largest companies (and 11 largest mines) which account for around 90 (and 70) per cent of total coal production.

The coalfields in the country are spread over an area of 700km (north to south) and 500km (east to west). Almost 90 per cent of this is mined in the Mpumalanga province, where it is usually classified as bituminous and occurring in seams up to several metres thick.

In 2005, mines in South Africa produced 245 million tonnes of coal, and at the present production rate, there should be more than 50 years of coal supply remaining. The industry is fortunate to be supported by a large domestic market as well as having a strong international position.

In fact, approximately 30 per cent of the coal in South Africa is exported, primarily to Europe and Asia. The vast majority of exports are shipped through Richards Bay Coal Terminal – the world’s largest coal export
facility – ranking South Africa as the fourth largest coal-exporting country in the world.

Hitachi construction machinery is prevalent in open-cast mines, of which some have recovery rates approaching 90 per cent. Coal lying less than 70 metres below the surface is extracted from a progressive series of parallel, long, narrow trenches.

Overburden rock and soil lying above the coal seams are blasted using explosives. Draglines and excavators then carry out the stripping operation, with dump trucks tipping the spoil into previously mined trenches. Once the stripping process has been completed, the exposed underlying coal seams are drilled and blasted loose. The excavators and dump trucks are then involved in the process of hauling the coal out of the pit.

The rehabilitation process begins when all of the coal has been removed and the spoil from the next trench has been deposited in the void. The overburden is flattened, the previously-stored top soil is spread over the top and the area is seeded with a mixture of grasses to return the landscape to its ecological balance.

Hitachi has captured a significant proportion of the South African mining equipment market thanks to local knowledge, technical expertise and a high level of service. It is no coincidence that HCSA’s largest depot is situated at Middelburg in Mpumalanga, close to the major coal mines.

Middelburg Branch Manager Jan Steyn and Service Manager Neels Haasbroek have spent their working lives in the area and possess a vast knowledge of the coalfields, mining companies and their specific machinery requirements. Two examples are: the former privately-owned Graspan Colliery on the outskirts of Middelburg; and the huge expanse of Anglo Coal’s Kleinkopje Colliery close to the neighbouring city of Witbank.

HCSA’s Middelburg branch was opened in 1980, but Jan didn’t take over the reins until 1996. Since then, he has been instrumental in Hitachi driving market demand. “The business has changed a lot during my time with HCSA,” he explains.

“Rigid dump trucks have been slowly phased into our customers’ mining operations. We have proved to them over time that Hitachi supplies products which are safer, last longer, cheaper to run and more productive than articulated dump trucks.

“In contrast, excavators have always been popular. The Hitachi EX and ZX ranges have been highly competitive and this has been proved in tests against other machines. The trend has seen the demand for large excavators increase from 40 and 50-tonne models to 80-tonne and above. The ZX850 has traditionally been our best-performing machine, but the EX1200 has also made a positive impression on the market and we are currently assessing demand for the EX1900.

“This is a 24/7 job due to the nature of the industry and our customers’ working hours. They are very busy and they want to be in contact with us all the time. Our aim at HCSA is to make the customer feel comfortable by delivering every aspect of the Hitachi service offering on time. We have to show a high level of commitment to build a serious, trustworthy and even enjoyable business relationship.

“This of course isn’t down to one person – it’s a team effort. Our job is made easier due to the superior quality of Hitachi products, but this has to be combined with good communication. The new generation of Zaxis-3 excavators is already making a strong impact in the marketplace and we must capitalise upon this with a high level of sales and service.”

The output of 173.3 million tonnes of coal (in 2004) from Witbank is three times greater than the next biggest coalfield. With four Anglo Coal mines situated in this area, it is no surprise that it was the second biggest producer of coal in South Africa in 2005, holding a 22 per cent share of the market. While Graspan only registered around one per cent share, both collieries have an ever-increasing need for reliable and productive excavators and dump trucks.

Anglo Coal is a wholly-owned subsidiary of Anglo American – a global leader in mining and natural resources – and one of the world’s largest private sector coal producers and exporters. The Kleinkopje Colliery started operating in 1971 and it now produces coal for export and the domestic market, including the local steel industry. It used to be an underground mine, but is now open-cast and operates around the clock.

The 2,500 employees have a target of producing 26,000 tonnes of coal per day. HCSA has worked closely with Anglo Coal to maximise the efficiency of this operation to reach the required level of productivity. There is a fleet of large Hitachi excavators and dump trucks working on the site and Anglo Coal is considering a new EX3600 or similar machine.

Graspan Colliery was established in 1995 by the Heyns family and was one of the few remaining privately-owned mining companies in the country. The former owner and Managing Director Bernhard Heyns started the colliery when a coal deposit was discovered beneath clay that was being mined for the company’s brick factory.

The Shanduka Group teamed up with the Swiss company Glencore International to purchase Graspan in 2006 as part of a drive to expand its coal business. They targeted junior coal companies due to the prospects of the South African market and the expansion of the Richards Bay Coal Terminal, which opened up the export route to smaller firms.

Bernhard had a long-standing relationship with HCSA via Jan and his team at Middelburg. “We used Hitachi machinery for a long time,” explains Bernhard, “because they deliver the most favourable cost of ownership. Large excavators such as the EX550/EX800 and ZX850 did particularly well for us over the period of ownership.

“HCSA also played a major part in changing our fleet of dump trucks. We decided to move away from articulated to Hitachi EH1700 rigid units and our vision included increasing the size of our excavators to EX1200s at the same time. This is why I believe that you can’t separate the dealer from the products – HCSA always provided an excellent level of support.”

This strategy has also been carried on by the new owners. The significant level of investment and expansion developed by the management team has resulted in the purchase of an EX1900 and four EH1700s to accompany the ZX850s and EX1200s. Hitachi has helped to make a huge impact on the colliery with a tenfold increase in productivity and output over the past decade.

Graspan is an open-cast operation with 340 employees. The average depth of the coal is 35 metres and it is sold to the domestic market as well as being exported to Europe. It also still produces clay.

Neels has daily contact with Graspan’s Workshop Foreman Assistant, Henko Coetzee, who organises any services relating to breakdowns and warranties on the site. “Our Hitachi fleet is very good,” Henko says, “and the move to the bigger machines, such as the ZX850s, has certainly paid off. The EX1200s are also much better than other products in its class.

“Hitachi machines are ultra-reliable and that is crucial to our operation in the mine. The durability of the excavators and dump trucks is vital as they have to work virtually non-stop under the most challenging of conditions.

“The availability and cost of parts are critical, but this is also a strong point of the service provided by HCSA. We are very happy with the help we receive from Neels and his team – they are always available and will come to our assistance at a moment’s notice.”

HCSA has kept pace with the rapid growth and development of the South African coal mining industry. It has promoted the range of Hitachi construction machinery in tandem with the relevant benefits of ownership to an appreciative customer base. In doing so, Hitachi has helped to increase productivity and profitability in the continued quest for the black gold rush in collieries such as Kleinkopje and Graspan.