The partnership between iron ore producer Kaunis Iron and Epiroc has produced excellent results in just a short time – and both parties now see even greater opportunities in the future.
The story of Kaunis Iron is short but eventful. The company was established in 2018, and that very same summer they launched the production of iron ore in the openpit mine of Kaunisvaara, north of Pajala. There was already a mine there, operated by Northland Resources between 2012 and 2014.
Kaunis Iron relies primarily on Epiroc’s SmartROC D65 rigs for its production drilling, and they have become an important part in what quickly became a profitable enterprise. In its very first year, Kaunis Iron exceeded its goals. Mining & Construction Magazine sat down together with Åsa Allan, Deputy CEO of Kaunis Iron, and Joakim Kemi, Sales Engineer at Epiroc, to learn more about the successful partnership and how it can grow.
How did the cooperation between Kaunis Iron and Epiroc start?
ÅSA ALLAN: “There was already a relationship before Kaunis Iron was established. Our mine manager at the time had also been manager at Northland Resources, and they used Epiroc rigs. We knew they worked well in our company. SmartROC D65 is well suited to small open-pit mines like Kaunisvaara, where flexibility is important”.
JOAKIM KEMI: “The relationships between Epiroc and Kaunis Iron are very good. Here in the far north there is a unique kind of straightforwardness. The most important thing for me is not ‘just’ selling a piece of equipment, but finding the best solution for you.”
What common challenges are there at Kaunisvaara?
ÅA: “For our part, accessibility to the rigs is number one. And getting a fast response from Epiroc in all situations where we need help. Everyone has to be on their toes to keep the entire chain moving. That is why we chose a service agreement under which Epiroc’s technicians are on site year round.”
JK: “We constantly have to draw on each other. We have six technicians in Kaunisvaara, and their job is to do everything they can to ensure that the Epiroc equipment is operating at all times. This means, for instance, performing regular service and taking care of unplanned downtime, as well as sharpening drill steel and making sure there is sufficient drilling equipment in stock at all times. If Kaunis Iron increases its rate of production, it is our job to keep up at every level.”
Is the accessibility as good as you would like?
ÅA: “It is, and the service agreement helps operations flow according to plan. Epiroc also helps train our drill operators in the rig software, so we can use it optimally.”
JK: “Kaunis Iron has four SmartROC D65 rigs, and in two of them, we have installed Certiq, Epiroc’s fleet monitoring system, which allows viewing of the accessibility at a detailed level. That lets us improve our planning and also gives us a lot of information. The plan is to install Certiq in the other two rigs, as well.”
ÅA: “We are looking forward to that. We are now hiring a planner who will focus a lot on the maintenance side. It is important that information reaches us directly, and for you, this person will be a great speaking partner.”
What is the day-to-day cooperation like otherwise?
ÅA: “It is very natural. We are in contact at all levels, but the closest contacts, of course, are on the technical side. Our technical personnel work side by side Epiroc’s staff on each shift.”
JK: “That daily contact is incredibly important, especially when it is two rather new companies that need to ‘find each other’. To work well, it has to be a team effort.”
ÅA: “Yes, and that is really what it feels like. Our employees view Epiroc’s personnel like a part of the team. They are considered colleagues and it makes no difference what company name happens to be on your work clothes.”
JK: “To enhance the cooperation, we have started having regular meetings with meeting minutes. As Åsa says, there is a lot of daily contact between staff from Kaunis Iron and Epiroc, but we want to be able to systematically pick up on important issues at all levels. And with meeting minutes, it is easier to reach a consensus and work together.”
ÅA: “This is a fantastic tool and is going to be even more important now that we are planning on investing in more rigs in order to grow the business. It is extra important that we understand each other.” There are plans to grow the business then. What demands does that make of your cooperation – and what opportunities do you see?
ÅA: “Basically we need to keep to the path we are on. As a high-cost producer, we need to be cost-effective with regard to fuel consumption, for instance. The most recent rig we purchased was a SmartROC D65 XLF, which has an extra long feed. That means we don’t have to join as many drill pipes, which translates to time-savings and lower fuel consumption.”
JK: “We know how important the cost aspect is. Epiroc has a tool for calculating TCO, Total Cost of Ownership, for our customers, and we think that may be the next step. Examining this question requires trust on both sides, and can produce excellent results.”
ÅA: “At some point we want to switch to some form of electric power in order to meet EU climate requirements. We use only windpower and hydropower in our ore dressing, so of course we are interested in electric-powered rigs.”
JK: “This is something Epiroc is working hard on. We have come quite far on the underground side of things, so the technology is there. And we already have electric powered Pit Viper rigs. This is a really important issue to us.”
KEYS TO A SUCCESSFUL PARTNERSHIP
For a relationship to blossom, it takes commitment from both sides. Kaunis Iron and Epiroc list their common factors for success.
The ceiling is high in the dialog between Kaunis Iron and Epiroc. If something is not going the way it should, the parties say so.
- Service agreement
Epiroc has staff stationed in Kaunisvaara to conduct regular service, take care of unplanned downtime, sharpen drill steel and ensure that there is sufficient drilling equipment in stock at all times.
- Regular meetings
In addition to daily contact on the technical side, regular meetings with meeting minutes are held, where issues such training, personnel, etc., are also raised. It lays the foundation for successful planning.
- Common goals
Both parties take care to ensure that the SmartROC D65 rigs have high accessibility and function optimally in the production. The fact that Epiroc’s on site staff have local anchoring strengthens the team spirit.
In focus: Kaunis Iron
Kaunis Iron was established in 2018 and operates iron ore mines in Kaunisvaara and plans to open another two mines in the near future. A business that was closed in 2014 was relaunched with new owners. The ambition is to create value for the local society and the region of Norrbotten, while securing a strong position on the global market.
- Number of employees: 330 and approximately 150 contractors
- 2019 production: 2 million metric tons of iron ore concentrate