Brazil - 2012
Juruti Mine Reduces Costs, Boosts Production since 2009 Start-up
From its September 2009 startup through June 2012, Alcoa’s Juruti Mine in the heart of the Brazilian Amazon overcame significant challenges to reduce costs by 15% and boost production volume 64.5% above initial projections—all while maintaining its commitment to sustainability and the region’s socio-economic development.
The logistical, infrastructure, and human resources challenges of mining in a remote Amazonian area combined to push Juruti Mine’s costs above benchmarked levels from start-up. Management recognized the issue early and implemented a cost-improvement initiative during the mine’s ramp-up phase.
Cross-functional teams mapped out all costs, identified hidden financial losses, uncovered cost-reduction opportunities, established cost-reduction goals, and used a structured methodology to implement the final cost reductions.
Major initiatives included:
- Implementing an efficient process to remove overburden at the mine site using bulldozers compared to the traditional process using trucks and excavators;
- Renegotiating key mining service contracts after analysis revealed that 50% of the mine’s costs related to contracted services;
- Revising the mining process and operational steps to ensure operational stability;
- Obtaining a power-generation refund from the government; and
- Debottlenecking the washing plant process to increase output 72%.
Through June 2012, the cost per ton of bauxite mined declined 31.6% from 2009 levels. In addition, production reached 4 million metric-tons-per-year compared to the 2.6 million metric tons projected before mining operations commenced.
The cross-functional teams continue to search for additional opportunities, meeting with mine leadership on a weekly basis. The cost-reduction process they established at the Juruti Mine has been shared with other Alcoa operations in Brazil and around the world.