Tag Archives: SmartCyclone

FLSmidth looks for sustainable gains with thyssenkrupp mining buy

The subtleties behind FLSmidth’s acquisition of thyssenkrupp’s mining business appear to have got lost within the financial community.

The company’s Denmark-listed shares, since announcing the transaction in late July, lost 16% of their value to August 20.

This downward move is hardly surprising when focusing on pure financials: FLSmidth is looking to acquire a company for an enterprise value of $325 million that is only expected to return to profitability two years after financial close.

Yet, this narrow train of thought discounts the well-timed strategy behind the move.

A combination of the two companies will undoubtedly create a leading global mining technology provider with operations from pit to plant. It will also see FLSmidth re-geared towards a mining sector on the up at a time when the cement business it serves is exhibiting flattish demand.

While this won’t be lost on analysts, most of them will only be able to factor in short-term profitability projections into their financial models, meaning, as far as they’re concerned, FLSmidth will be weighed down by the transaction until 2024.

Yet, for FLSmidth and mining, 2024 is practically ‘just around the corner’.

In FLSmidth’s recently released June quarter results it registered an order backlog of DKK16.7 billion ($2.6 billion), the majority of which was associated with mining orders. Of the backlog amount attributable to the mining sector, 16% would not be realised until 2023 and beyond.

This could mean many of the orders FLSmidth registered in the most recent June quarter will only be realised (read: delivered) in 2024, the year thyssenkrupp’s mining business is expected to be back in the black.

This is just one of the subtleties that may have got lost by shareholders fixated on the short term.

The second is how the transaction sets the company up as a mining sustainability leader at a time when the industry is calling out for one.

At the top end of the mining industry, the ability to decarbonise operations is becoming as – if not more – important as returning cash to shareholders. Every tonne of copper extracted and processed, and every ounce of gold mined and refined is likely to come with an associated carbon content/price in future years. The battery materials supply chain tied to the likes of lithium, cobalt and nickel will come under even more scrutiny.

Blockchain-type traceability platforms will mean investors and any interested party can interrogate where the raw materials came from and how they were produced.

These same miners will also be judged on how they use water, with freshwater use being rationalised in many regions where such resources are scarce.

FLSmidth, should the acquisition complete next year, is arming itself to compete in this brave new sustainable world.

The company started this journey all the way back in November 2019 when it announced its MissionZero program at its Capital Markets Day in Copenhagen.

Central to MissionZero is FLSmidth’s focus on enabling its customers in cement and mining to move towards zero emissions operations in 2030.

The OEM planned to do this by leveraging the development of digital and innovative solutions tied to sustainable productivity, offering its customers in the mining sector the technological solutions to manage zero emissions mining processes by 2030 – with a specific focus on water management.

For the latter, dry-stack tailings was the order of the day, with FLSmidth’s EcoTails® solution expected to reduce water costs, tailings dam risks and minimise environmental footprint. The development of the largest filter press plate ever built, the 5 m x 3 m AFP, was a signal of just how confident FLSmidth was on this emerging market trend becoming fully embedded across the globe.

Digital products such as SAGwise™, SmartCyclone™, BulkExpert™ and Advanced Process Control would, in the meantime, allow miners to become that more efficient with every resource (water, energy, etc) they used, again, improving their sustainability credentials.

Close to two years after making the MissionZero declaration, Thomas Schulz, CEO of FLSmidth, says the company has been seeing the program’s effects come through in its order book.

“Actually, this has been translated in orders for a few years already,” he told IM.

“When we look into sustainability, we define it as making productivity improvements. If you don’t adopt these sustainability solutions, you effectively have to pay more to keep operating at the same levels, or you have to stop operating – there is a productivity element to it, and quite a big one.

“For us, as a lifecycle provider, it is important that we offer to our customers at any point in time and any point of our offering, the right solution to make more money. That can be with dry-stacked tailings, tailings management, IPCC (in-pit crushing and conveying) systems, electrification of the pit, reducing emissions or dust, etc.”

Many of these solutions will enable companies to produce the same amount of product, or more, with the same input costs and energy draw, according to Schulz.

Coping with further restrictions on the industry’s access to freshwater will require more than step-change initiatives, and that is why the company is working on how its equipment can use “different types of water” and technologies that use less freshwater to ensure operations can abide by incoming legislation.

The company has been working on providing these zero-emission and resource-efficient solutions since 2019 to enable its customers to become sustainable operators by 2030.

“For many people, that sounds very long,” Schulz said. “In the mining industry, it’s not.”

Factor in the two-to-three years to build a pilot plant to prove such technology, two-to-three years to get a full-scale plant approved and the associated construction time, and a decade has passed.
Sustainability represents the ‘long game’ for mining OEMs, and technology is the key to achieving that sustainability, Schulz said.

Which brings us back to the thyssenkrupp mining business acquisition.

One of the big pillars

FLSmidth, in adding thyssenkrupp mining to its portfolio, is providing a whole host of decarbonised options for its mining customers to consider in their own sustainability drive.

It is adding mine planning expertise to its portfolio, ensuring that the IPCC and continuous surface mining technologies it puts forward are optimised for the operation at hand. These technologies are further complemented by semi-continuous and mobile crushing options from thyssenkrupp mining, adapted to the pit profile at hand.

Heavy-duty overland conveyors from thyssenkrupp mining complement other bulk handling solutions FLSmidth might be providing at stockyards or ports to reduce truck haulage and shift the transport dynamic to ‘green’ grid power.

“The culture in project service companies is you are the hero if you come to the table with the next big project,” Thomas Schulz says. “In product service companies, you are the hero if you come with the next big profit”

Then, when it comes to comminution, a crushing (including primary jaw crushers) and screening portfolio, plus smaller milling options and expertise in high pressure grinding rolls (HPGRs) through the globally renowned Polysius business, is bolted onto FLSmidth’s own crushing and grinding (including vertical roll milling technology) portfolio. This puts the combined offering up there with any global OEM around, while also providing the potential ‘dry grinding’ technologies the industry has been on the lookout for.

All these solutions come with sustainability benefits that can be felt throughout the mining value chain.

They also provide options and flexibility to an industry that cannot just suddenly retire a fleet of ultra-class haul trucks at a deep open-pit operation in favour of a fixed IPCC solution, or build a new process plant fitted with HPGRs to replace a typical SAG and ball mill grinding circuit.

Schulz said as much to IM.

“One of the big pillars of the whole acquisition lies in sustainability,” he said. “Normally, the process plants where we play big are all electrified, so if the energy resource coming into these plants is a green one, the process is already sustainable.

“When we look into the pit, in-pit crushing and transporting of material is where we can focus a lot.

“I’m not saying you can replace every truck, but some of the surface mines and the ones underground can be made significantly more continuous and sustainable from a transport perspective.

“thyssenkrupp is leading in that. They are quite big in the pit; we are quite big in the processing plant. Both, together, are complementary.

“If we can integrate the offering – and we will do – and make it more sustainable, that is a big step towards the 2030 MissionZero target.”

This increased spread of solutions will also provide FLSmidth with more opportunities to refine the entire flowsheet, providing further sustainability benefits to its customers.

“When we design solutions, or offer replacement equipment or a new process, we can now rely on expanded competences to look at what the best overall system for the entire flowsheet is,” Schulz said. “For instance, if we change the gyratory on a mine site and then look into the pit, we know how to size the equipment in the pit and the concentrator upstream.”

This increasing flowsheet focus must be complemented by an aftermarket approach that ensures the process remains efficient and sustainable throughout a product’s, solution’s or mine’s lifetime.

This was one of the obvious disparities between the two companies when the announcement was made in late July. It is also one of the biggest opportunities that comes with the planned transaction, according to FLSmidth.

Whereas capital business represented 37% of mining revenue in 2020 for FLSmidth, it was 66% of revenue for thyssenkrupp’s mining business. Services represented 63% and 34% of the two businesses’ 2020 revenue total, respectively.

Schulz has seen such a contrast – and opportunity – before, referencing his arrival at FLSmidth in 2013.

“When I came here to FLSmidth, it was actually quite similar,” he said. “I was at Sandvik for 16 years where the aftermarket was actually seen as the most important. They realised the importance of the customer relationship: the capital equipment sales team may meet the customer for a few hours per year, but the service technician has that interaction over weeks and months in terms of aftermarket.”

He also recognises the cultural shift needed to capture many of the profitable aftermarket dollars that the company is forecasting with the planned acquisition.

“The culture in project service companies is you are the hero if you come to the table with the next big project,” he said. “In product service companies, you are the hero if you come with the next big profit.

“You need both – we need profit, and our customers need profit to invest, while you need the projects to spur these aftermarket opportunities.

“We calculated what the aftermarket potential of the thyssenkrupp mining business is and understood it was not covered as they were all looking for the next big project, which we understand.

“But this is not what we will accept in the future. We have to have a strong aftermarket and strong customer link.”

Which all comes back to MissionZero.

“If you focus on MissionZero, then you invest there where you can impact MissionZero. Wherever you have aftermarket, you impact MissionZero. Where you don’t have aftermarket, you don’t impact MissionZero.”

At the same time, Schulz is not losing sight of the company’s end goal with all the business it coordinates in the mining sector.

“Whatever we do with the customer, they have to be more efficient, more productive and make more money.”

It just so happens that in doing this, the mining sector will become that much more sustainable.

FLSmidth’s digital R&D bearing fruit at the right time

As miners look for more digital solutions to ensure they can cope with the challenges that come with operating through exceptional circumstances like COVID-19, FLSmidth is leveraging decades of research and development to help them make this transition.

Terence Osborn, FLSmidth’s Director of Product and Account Management for sub-Saharan Africa and the Middle East, highlights that R&D is the lifeblood of the company’s new technologies. So much so, that it has some 80 projects underway to improve its mining-related offerings.

“The power of digital technology is certainly a key element of these efforts,” Osborn says. “Together with our Blue Box digital concept, based on our ECS/ControlCenter™, which is a cybersecure interface between our equipment and cloud data storage, we use our SiteConnect™ mobile app to monitor the performance of equipment and process plants in real time. The ECS/ControlCenter V8 process control platform sits at the heart of our digital vision, a key component in our growing portfolio of digital solutions and services that we call ENABLR.”

An example of this applied capability is an FLSmidth REFLUX® Classifier modular plant operating on a South Africa mine. Using SiteConnect, operations managers can have real-time access to over a hundred operational parameters on the plant. Data analytics linked to the cloud data can also generate time-based trends for instant viewing on the app.

“We have also developed SmartCyclone™ technology for our hydrocyclones,” Osborn noted. “This innovation uses sensors to detect wear and roping, a condition that reduces separation efficiency. By sending an alert when certain operating parameters are breached, the system ensures optimal efficiency is maintained, even as slurry conditions in the circuit vary.”

He highlights that the company’s machine-level solutions are offered as part of plant and process packages. At both plant and process level, there is also FLSmidth’s advanced ECS/ProcessExpert® solutions, which facilitate not just monitoring and control, but advanced optimisation enabled by state-of-the-art artificial intelligence technologies.

“It is important to remember that control systems need to be flexible, so that they adapt to customers’ needs and to their existing systems,” Osborn says. “With FLSmidth’s depth of expertise in software engineering and machine control, we can ensure that our machine-level systems connect with all market leading control systems – to seamlessly deliver the data that mines need for effective decision making.”

The company’s R&D pushes the boundaries of performance in a range of mineral processing fields. These include advancing its lamella plate technology in mineral separation applications, adapting its vertical roller mill for dry grinding in mining, and extending wear life of pumps with new polymers.

FLSmidth to boost plant efficiency with SmartCyclone system

With process plant optimisation techniques becoming a necessity for mines looking to maximise their operating performance by keeping costs low, throughput high and downtime to a minimum, FLSmidth has devised an automated monitoring and control solution for reducing cyclone-related process deviations.

The SmartCyclone™ system delivers in all three areas for cyclone circuits, according to the company, improving cyclone overflow particle size distribution, predicting and controling cyclone maintenance schedules, and optimising closed-circuit grinding processes.

FLSmidth said: “This equates to monitoring the performance of individual cyclones within a circuit in real time, preventing unplanned breakdowns from occurring and monitoring wear rates while ensuring the cyclones are operating optimally at all times. This translates into higher efficiencies in the plant and ultimately, higher profitability.”

The SmartCyclone closed circuit grinding optimisation system combines a variety of FLSmidth patented technologies, including the FLSmidth Krebs SmartCyclone wear detection sensor technology and the Krebs’ patented roping sensor technology (with patent-pending wireless controller system). This technology immediately identifies if a cyclone is malfunctioning, the company said.

The closed circuit grinding optimisation system also incorporates FLSmidth’s ECS/ProcessExpert® process control software with a new patent-pending SmartWear™ cyclone maintenance algorithm.

One of the largest benefits associated with this software is the ability to develop a uniform operation strategy that outlines the best way to run the plant, according to FLSmidth. “Once this strategy has been established, the necessity to train new operators is reduced.”

Reducing or eliminating manual operation, which decreases the potential for human error, is also one of the overarching benefits of SmartCyclone, the company says.

FLSmidth has more recently enhanced its Krebs SmartCyclone system with wireless technology that
enhances installation by eliminating the need for individual nodes and the interconnecting cables between the sensors and nodes and associated controllers.

It uses a central wireless controller that can handle up to 16 sensors per unit; providing real-time wireless detection and communication of roping and/or wear data. The new wireless controller unit is a handheld device that can be removed from its docking/charging station to sync the individual sensors. Once removed, it goes into battery-power mode and the user can walk to a desired sensor, activate it with a magnet, trigger and set the necessary operating parameters.