The mining industry “nirvana” of fully integrated production and maintenance planning, and an “industry step change” that “[redefines] mining execution”, is what RungePincockMinarco chief Richard Mathews is seeing in the company’s union with respected asset maintenance software specialist iSolutions.
One of a number of smallish Australian mining technology firms with genuine claims to a global niche-market leadership position, 19-year-old iSolutions impressed giant mining machine maker Caterpillar early with its Dynamic Lifecycle Costing (DLCC) engine and AMT software. Now large Cat equipment dealers in Canada, Indonesia, South Africa and Australia use the software.
Other big OEMs (original equipment manufacturers) such as Atlas Copco, Komatsu and Hitachi were sold on the equipment maintenance planning and cost control software, along with miners such as Glencore, Newmont and Anglo American, and some large contract miners.
RPM’s A$20 million (US$14.65 million) cash and scrip acquisition of iSolutions is expected to net it A$10 million of annual revenues and fiscal 2017 EBITDA of $4.8 million (including $1.8 million of synergies). Mathews said future growth opportunities of the combined product suites were significant, and RPM’s current share price (and market cap of about $57 million) “substantially undervalues” the business.
“iSolutions is another great example of innovation emanating from Australia,” he told Mining Journal.
“Like RPM, they have understood if mining companies are to achieve the next-level of productivity they need to fundamentally change the way in which they operate their businesses. Incremental change has, and can, only get them so far. They now require a paradigm shift in their thinking to give them complete visibility of their entire mining value chain.
“Bespoke, point solutions will not deliver this value.
“Only enterprise solutions from vendors who think outside the box can deliver this next level.”
Mathews said the combined RPM and iSolutions offerings created the only single-vendor production and maintenance enterprise execution system in the market. The system would reduce the cost of mining as both production and maintenance teams could work off the same software platform to optimise mobile fleet efficiency and productivity. RPM’s enterprise mine scheduling, planning and simulation products complemented iSolutions’ asset management software.
“The value proposition for [RPM’s] XERAS Enterprise will also be significantly strengthened now that maintenance managers will be able to accurately predict the capital and operational saving of different maintenance options and strategies, as well as utilising the latest condition-based monitoring technologies,” Mathews said.
Development of new enterprise capabilities during one of the mining industry’s worst downturns distinguished the pair among their peers, he said.
“We have both invested in R&D at a time when most mining vendors are contracting their investment. This vision, partnered with innovation, has delivered a complementary product partnership that redefines mining ecosystem planning.”
iSolutions’ DLCC is posited as a significant differentiator.
“A common challenge with most life cycle models is that they are static,” Mathews said.
“They are correct at the start of the equipment’s life but deviate from this model as the equipment begins to operate. AMT, on the other hand, maintains a dynamic life cycle cost model for each item of equipment. It unlocks the benefits of having this information live and available using inputs from your existing ERP.
“It puts a structure around work order costs and allows you to drill down and understand the major cost drivers and their impact on the life cycle cost. Most importantly it allows you to be proactive about asset management, control maintenance costs, reduce unplanned down time and understand the drivers of equipment performance.
“Consequently, AMT enhances the investment in ERP systems that any organisation has made.
“ERP systems will focus on specific jobs and not the asset lifecycle however by focusing on the lifecycle approach using the data from the ERP, customers are able to really understand the true cost of the equipment maintenance over its lifetime.
“This is why our joint offering is complementary to Enterprise Resource Planning (ERP) systems and provides our customers with the opportunity to enhance their investment in ERP as information is delivered above and below the line in mining.
“This complete visibility provides management with the tools and resources to make informed decisions that ultimately affect the bottom line.
“Rather than doing this in the dark, as they have previously, we can now do this quicker and with accuracy.”
Richard Roberts, Mining Journal