SMART is an association of mining companies that meets regularly to coordinate the technology development needed by the mining industry. Since 1995, the member companies have directed research and influenced the manufacturers and suppliers to improve surface mining technology and services. SMART actively supports learning seminars, collaborative research projects and user groups.

SMART sponsors an ongoing series of learning seminars. Each year, the seminar tackles a new topic of concern for the industry from developments in large haulage trucks to wireless communications and information technologies.

Collaborative Research and Projects

SMART also sponsors collaborative research. This is a primary goal of SMART and one of the biggest benefits to members. SMART has programs in several areas:

·Wear materials for the mining industry

·Diesel emissions evaluation

·Standard definitions for the benchmarking of availability and utilization of equipment

·Mine haul road design and construction

·Mining benchmarking database

New projects are considered at regular meetings.

User Groups

User groups have been formed to tackle specific challenges head-on and develop solid solutions that can benefit surface mining companies around the globe. These user groups illustrate the effectiveness of collaboration:

·Large Tire User Group

·Mining GPS Users Association

·Shovel - Truck Equipment User Group

Recognizing that there is strength in numbers, this newest SMART initiative provides members the opportunity to network on issues relating to trucks, shovels and other mine equipment. Operations and maintenance items are the focus. Meetings are about two times per year at mining industry conferences in North America.

Benchmarking has both a simple and advanced definition.

Simple definition is making comparisons between operating units using a set of comparable metrics.

Advanced definition is the discipline of business process improvement for an advanced improvement methodology. The concept is a search for industry best practices that leads to superior performance. This approach is more than just measuring. It was invented by Xerox in 1979 and became main stream in late 1980s. Several books have been written on the topic.

In summary, advanced benchmarking has the following steps:

1. Identify problem areas

2. Identify other places with similar processes

3. Identify leaders in the areas

4. Visit best practice organizations

5. Implement new and improved processes

The program directly supports the simple definition of benchmarking. Since the time distribution from the various participants is normalized and standardized, comparison can be made across companies.

SMART Benchmarking helps with #1 to #4 in the advanced benchmarking methodology for surface mining operations

Many times “benchmarking” is done on a sporadic, one-off basis whenever management asks how your operations compare to others. Valid data is hard to collect. The SMART Benchmarking program is continuous because participants send their data quarterly, reporting on a monthly basis.

The SMART Benchmarking Project was initiated in 2003. The SMART organization supported a graduate project by Zoli Lucas titled, “Standardization of Definitions for Benchmarking.” In 2004, the SMART benchmarking user's group chose Marston to be the third-party administrator for the program.

Tom Demorest from Syncrude volunteers as the program coordinator on behalf of the SMART organization. A SMART benchmarking user’s group meets periodically to provide guidance to the program.

·Draglines

·Cable Shovels

·Hydraulic Shovel

·Loaders

·Large, Medium and Small trucks

A principal of the program is to make it as easy as possible for participants to send data. Subsequently, there is no defined data format for submitting data. Some participants send raw dumps from their dispatch system, while others send summarized data. All that is needed is data that can be used to create monthly data totals by equipment fleet.

Data submittals are requested to be sent quarterly.

Marston takes the data you submit and processes it through an import software routine specially written to match your data submittal format.

The time is categorized into standard time categories:

·Down

·Delay

·Wait

·Net Operating Hours

·Standby

When the program was first initiated, a working group made up of SMART organization members defined the categories and created a set of both general and specific rules.

General Rules:

Specific rules have been defined to clear up ambiguity in some situations. For example, for shovels, cable moves are defined as delay. For trucks, packing and cluster is a delay. These and other special rules are applied to your data to standardize how the time is categorized in the SMART benchmarking system.

See table below

SMART Benchmarking

Calculated Metrics Definitions

benchmarking.smartmines.com

Scheduled Hours

Calendar time equipment is in service

DOWN + DELAY + STANDBY + WOH

DELAY%

Percentage of hours in a year spent in DELAY

(DELAY / Scheduled Hours) * 100

DOWN%

Percentage of hours in a year spent in DOWN

(DOWN / Scheduled Hours) * 100

GOH

(Gross Operating Hours)

Total time spent in operation

NOH + WAIT + DELAY

GOH%

Percentage of hours in a year spent in operation

(GOH / Scheduled Hours) * 100

GOH = NOH + WAIT + DELAY

STANDBY%

Percentage of hours in a year spent in STANDBY

(STANDBY / Scheduled Hours) * 100

Tonnage per GOH

Tonnes of material hauled per Gross Operating Hour

Tonnes / GOH

GOH = NOH + WAIT + DELAY

Tonnage per WOH

Tonnes of material hauled per Work Operating Hour

Tonnes / WOH

WOH = NOH + WAIT

WAIT%

Percentage of hours in a year spent in WAIT

(WAIT / Scheduled Hours) * 100

WOH

(Work Operating Hours)

Productive operating hours and WAIT

NOH + WAIT

WOH%

Percentage of hours in a year spent in Work Operating Hours

(WOH / Scheduled Hours) * 100

Efficiency Categories

Capital Efficiency

The ratio of Net Operating Hours (NOH) to Scheduled Hours (hours in a year).

NOH / Scheduled Hours

Operating Efficiency

Ratio of work operating hours to actual operating hours

WOH / GOH

GOH = NOH + WAIT + DELAY

Availability Categories

Mechanical Availability

Ratio of time in operation to time in operation plus DOWN

GOH / (GOH + DOWN)

GOH = NOH + WAIT + DELAY

Physical

Availability

Ratio of Scheduled Hours minus Down to Scheduled Hours

(Scheduled Hours – DOWN) / (Scheduled Hours)

Use of Availability

Ratio of total operating hours to total operating hours plus STANDBY

The efficient utilization of the equipment

GOH / (GOH + STANDBY)

GOH = NOH + WAIT + DELAY

Your raw data is never placed on the reporting web server or database. The custom import routine takes your raw data and summarizes it into the time categories. Only the monthly totals of the time categories are stored in the database.

Each participant can view their summarized data on the reporting web site. You can only see your own summarized data.

The reporting web site is password protected. Only individual logins are provided, not company-wide logins. The web site is built using Microsoft technology and uses standard and tested security components from Microsoft’s .NET Framework.

No, mines are only identified by a letter (A, B, C …). The web site tell you what letters is assigned to your mines. Occasionally the letters are scrambled up and reassigned.

First, the SMART organization is not set up to execute contracts and legal agreements. Marston contracts with participants through a standard subscriber agreement.

Second, participants want to keep their data confidential. As a third-party to all participants, Marston maintains that confidentiality.

1. Processes the data submitted quarterly by participants

2. Contracts with participants through the subscriber agreement

3. Owns and maintains the web site

4. Facilitates contact between participants

5. Takes part in SMART benchmarking user group meetings

6. Promotes the program

The Service Fees, as established by the SMART Benchmarking User Group, effective 06 May 2008, are as follows. The currency of all fees on this Schedule is Canadian dollars.

For United States and Australia mining companies Marston can set the fees to be paid in equivalent local currency.

The fees are set by the SMART benchmarking user group at a level where Marston will recover its cost.

Typically, it takes 24 to 40 hours of programmer time to create an import routine and test it. The work is done on a time and materials bases at Marston’s normal fee schedule and will typically run $3,000 to $6,000. Because the programming has begun, Marston will give new participants a cost estimate to the work.

This fee is charged whenever a participant changes the format of their data submittal.

The legal agreements are summarized as follows:

The intent of the Subscriber Agreement is summarized below with the following diagram as a guide.

First, sign the Subscriber Agreement and pay the annual subscription and set up fees

Second, work with Marston to define your data submittal format and pay Marston to create the data import routine.

Third, start sending data.

Contact Marston

Mollie Whitacre at SMART@golder.com, 314-984-8800.

You will send Marston an example of the data submittal and a breakdown of your own time codes. Marston will correlate your time codes into the SMART time categories with input from you. Marston will estimate the cost of creating the import routine and get your permission to proceed with that work.