th

The 12 Technical Meeting, 13-14 May 2013

Utilize Waste Oil Mix in ANFO

By
Arman Ismail , Yunianta Irvana 2, Preecha Mora3
1

ABSTRACT

ANFO is Ammonium Nitrate Fuel Oil, consist of ammonium nitrate 94.5% and fuel oil 5.5 %. The
process in blasting activity starting from priming, charging ANFO into blast hole, tie up and last is
the blasting activity.

In year 2011 usage of diesel fuel for blasting activities an average 99,691 Lt/Month. The other side
average production of waste oil in Kitadin site Tandung Mayang is equal to 33,676 Lt/Month. Some
examples of types of waste oil products from heavy equipment are: hydraulic oil, transmission oil,
brake fluids, motor oil, crankcase oil, gear box oil, synthetic oil.

First time we did trial to use waste oil in ANFO mixing by manual and got the result for excavator
productivity still above the management target and for the environment issues based on the results
of measurement of air ambient all complied with the standard.

We were creating the innovation by utilize waste oil to mix in ANFO by build Waste Oil Processing
Plant (WOPP). In Jan – Mar (Q1) 2012 we starting using waste oil and diesel with ratio 30 : 70,
then in Q2 the mixing ratio increased to 40 : 60, and Q3 50 : 50 until now with total use of waste oil
from Q1 until the end of Q4 2012 amounted to 423,377 liters and cost savings 437,991 USD and
excavator productivity in Q1 until end of Q4 still above management target that is 1,100 BCM/ Hour
for EX 2500 and 550 BCM/Hour for PC 1250.

We can reduce fuel consumption for Blasting about 34% or 0.010 Lt/BCM. And also we achieved
around 6 months of Return On Investment compare with target 1 year.

1
Section Chief - Drill & Blast, 2 Departement Head – Operation Data, 3 Departement Head – Drill & Blast.

Driving Competitive Advantage through Innovative Cost Optimization 1

 th
The 12 Technical Meeting, 13-14 May 2013

1.0 INTRODUCTION

PT.Kitadin site Tandung Mayang work as owner mine with concession area 2,338 Ha. For 2013 we
have production plan for OB as 49,214,574 BCM and for coal 3,105,892 ton.

The decreasing of world reserve of fossil energy and an increasing trend of fuel price as part of
blast cost has been an issue until now. So we need to create a new innovation to reduce fuel
consumption for blasting and resolve it as well as to be an environmental friendly mining company.

Before 2012, Kitadin used 100% diesel fuel to mix in ANFO. Comparison of diesel fuel mix in
ANFO about 5.5% : 94.5%. From other experience that we knew fuel oil can be mixed with waste
oil. Kitadin build team to make it happen by construct Waste Oil Processing Plant. The project
began with trial to fulfill government test standard. It start operate on January 2012 to produce mix
between waste oil and diesel oil. Many parties involves in this project include Operation as user,
QSE as controller, GS-AM as project leader.

2.0 BACKGROUND

Right now the world is facing decrease of fossil energy reserve. One of the way beside to find
another energy alternative is to reuse another material as substitution the function of oil. Cost
reduction is one of the key to company to survive during economic crisis. Fuel is the concern for
company because world price trend increase year after year. The team establishes a baseline of
original performance against which to measure improvements resulting from the topic.

However, to be sustainable and competent contractor, we need to develop cost reduction inline to
achieve good performance of production. Work of group improvement is one of the most important
key for the success.

3.0 DESCRIPTION OF PROBLEM, ISSUE, OR IN-EFFICIENCY

3.1 High fuel blast cost

Blasting is main part of mining activity process to break material to be loaded by excavator.
Previously fuel oil is used 100% for mixing with Ammonium Nitrate to max ANFO as blasting
agent. For comparison usage of fuel oil is about 5.5% from mixing beside AN 94.5%. For
2011 blast cost especially for fuel has over budget. It can be show graph below:

Driving Competitive Advantage through Innovative Cost Optimization 2

 th
The 12 Technical Meeting, 13-14 May 2013

3.2 Fuel price increase

Fuel price in the world increase has been issue time after time. For mining company which
uses fuel as mainly consumption. In company cost structure fuel takes biggest portion of
operational cost. Beside heavy equipment, in Kitadin blasting also consume fuel as part of
ANFO mixing. Company must have strategy to utilize usage of fuel in order to save cost
during trend of fuel price increase. Fuel price can be show in the graph below:

3.3 Waste oil production

Heavy equipment in mining activity beside consume fuel, it also need oil as lubricant. When
engine has spent period of life time usage oil, it will generate waste oil. In every month heavy
equipment in Kitadin produces waste oil average 33,676 Lt (2011). Some examples of types
of waste oil products from heavy equipment are: hydraulic oil, transmission oil, brake fluids,
motor oil, crankcase oil, gear box oil, synthetic oil. Below is waste oil production in 2011:

Driving Competitive Advantage through Innovative Cost Optimization 3

 th
The 12 Technical Meeting, 13-14 May 2013

3.4 Contamination hazard

Waste oil is oil that has been contaminated with substances that are not hazardous, but do
render the oil unusable for its intended purpose. Any oil contaminated with hazardous waste
is itself a hazardous waste and must be handled / disposed of by EPA standards for the
hazardous waste contaminant. Both used oil and waste oil require proper recycling or
disposal to avoid creating an environmental problem.

Waste oils are hazardous waste as they display some hazardous properties. Waste oils that
are found in rivers, lakes and streams threaten aquatic life. Indeed, a liter of waste oil can
contaminate a million liters of water. Furthermore, severe soil contamination can result from
waste oils being left on the ground. If everybody not concern about waste material it will effect
directly to environment. Company must have own standard to comply government regulation
as part of good mining practice.

3.5 Capacity storage

Waste oil can be disposed of in different ways, including sending the used oil off-site that
some facilities are permitted to handle the used oil such as local waste disposal facilities
WOSA. The second way by burning used oil as a fuel (some used oil is not regulated by
burner standards, but others that are off-specification used oil can only be burned in either
industrial furnaces, certain boilers, and permitted hazardous waste incinerators). The third
way by marketing the used oil (claims are made that the used oil is to be burned for energy
recovery, it is then shipped to a used oil burner who burns the used oil in an approved
industrial furnace or boiler).

Driving Competitive Advantage through Innovative Cost Optimization 4

 th
The 12 Technical Meeting, 13-14 May 2013

For on-site burning of used oil, the oil must be stored in tanks or containers, above or
underground. The containers must be in good condition with no leaks, the tanks/containers
must be labeled with the words “used oil”, and there must be a spill prevention plan (or a
control and countermeasures plan).

In Kitadin used to store it in WOSA (Waste Oil Storage Area) and sell it to the third party for
disposing. When heavy equipment produces more waste oil, it will become problem to
handling and store it.

4.0 DESCRIPTION OF THE SOLUTION

4.1 High blast cost

After Kitadin concern about reduced PF, further step is concern about utilize of Fuel oil in
blasting. Compare to overall fuel cost blasting 1,175,196 USD (2011), now it already reduced
to be 803,153 USD (2012) by usage waste oil while OB production increase 2,432,804 BCM
from 2011. Number of diesel blast cost can be shown on the graph below:

Total cost of Fuel (USD)
1400000

1200000

1000000 437,991 

800000

600000 1,175,196 

400000 803,153 

200000

0 2011 2012

4.2 Fuel usage composition

By construct WOPP, the composition of fuel oil is not 100 % anymore for blasting. From 100
%, may reduce to be 64%. Data can be shown below:

Driving Competitive Advantage through Innovative Cost Optimization 5

 th
The 12 Technical Meeting, 13-14 May 2013

4.3 Waste oil production

Waste oil production previously direct to WOSA and sell to the third party (CV Lilis Borneo)
with price 1 drum (200 Lt) is about 5 USD equal with 10,914 USD/year while production waste
oil monthly average 35,289 Lt in 2012. If it compares to use for blasting, Kitadin get revenue
427,077 USD in 2012. Data can be shown below:

4.4 Contamination hazard

Every 6 month Sucofindo (third party consultant) will do test to know number of air ambient
quality. It is the way to control effect of usage waste oil to environment. Data was taken before
and after blast. After that it is compare to the Government standard. From first trial on 2011

Driving Competitive Advantage through Innovative Cost Optimization 6

 th
The 12 Technical Meeting, 13-14 May 2013

Kitadin result always fulfill Government standard. Below is measurement process and number
test result:

4.5 Capacity storage

In 2011 flow chart of waste oil management is from engine that collected and continues
brought WOSA. After construct WOPP, waste oil can be kept temporary in waste oil storage
(WOSA). If the tank for waste oil in WOPP almost reach empty, waste oil will be flew in to the
tank. Management of WOSA becomes easier after construct WOPP because stock of waste
oil never exceed capacity of it.

Driving Competitive Advantage through Innovative Cost Optimization 7

 th
The 12 Technical Meeting, 13-14 May 2013

5.0 INITIAL RESULTS / EXPECTED BENEFITS

By the implementation of utilize mix waste oil in ANFO the benefits is reduced operating cost
especially in blasting. Since start implement on January 2012, usage of fuel oil become less than
year 2011, some benefit can be seen on chart below:

5.1 Return of investment:

WOPP build on middle of 2011, capital cost $ 196,907. By utilize waste oil mix in ANFO,
Kitadin reduce cost 36,499 USD/month (2012). By the end of Jul 2012 or approximately 6
month, WOPP already have return of investment. It can be show by this graph below:

Reduced percentage diesel oil consumption:

By substitute diesel oil with waste oil mix in ANFO, Kitadin reduce percentage usage oil diesel
oil each month from 100% to be 64%. The variation slightly changes because due to WOPP
maintenance & budget setting ton increase percentage from 30% – 40%. There is no different
blast result from the first implementation. It can be show by this graph below:

Driving Competitive Advantage through Innovative Cost Optimization 8

 th
The 12 Technical Meeting, 13-14 May 2013

Fuel saving of diesel oil:

Kitadin save diesel oil cost from the beginning of investment approximately 437,991 USD
(2012). It can be show by this graph below:

Consumption Fuel / OB Production:

It can be compare with OB production in 2012 for cost diesel oil for blasting reduced 0.010
Lt/BCM. It can be show by this graph below:

Consumption Fuel (Lt/BCM)
0.03

0.025

0.02 0.010 

0.015
0.026
0.01
0.016
0.005

0
2011 2012

Productivity of excavator:
The methodology of calculating the productivity of an excavator emerged together with the
first excavator machines. Essentially, excavator productivity is typically measured by the

Driving Competitive Advantage through Innovative Cost Optimization 9

 th
The 12 Technical Meeting, 13-14 May 2013

volume of loose or rock soils the machine can displace in an hour of continuous operation. In
other words, the productivity of an excavator is determined by the volume of the soil it can dig
up in a minute. The calculations for excavator productivity are straightforward and can be
simply completed on a standard calculator. One of the big issue about utilize waste oil is
productivity, but after implement we found that productivity is still above standard. It can be
show by this graph below:

Driving Competitive Advantage through Innovative Cost Optimization 10

 th
The 12 Technical Meeting, 13-14 May 2013

One of the things that must concern beside productivity is size of material. Material for vessel
fill factor is presented by progress. Progress is comparison between truck count and joint
survey. It can be seen below that joint survey is follow standar 100 %.

Air ambient quality:

Government regulation that air ambient quality must be under standard after blast. Form the
result that measured by Sucofindo, our air ambient is still comply. It can be show by this
graph below:

And Kitadin achieve award from government with category green flag

Driving Competitive Advantage through Innovative Cost Optimization 11

 th
The 12 Technical Meeting, 13-14 May 2013

6.0 BANPU SPIRIT IN ACTION

Demonstrate your project implementation activities and evident those are linked to our Banpu spirit
values:

 Innovation
1. Initiative for green mine pit about Waste Oil Storage Area (WOSA) and Waste Oil
Processing Plant (WOPP)
2. Dare to mixing waste oil and diesel fuel process developed 30 : 70 to be 50 : 50
3. Continuous collecting data and action for saving cost

 Integrity
1. All actual data are transparent those can cross check with field and Fleet
Management System (FMS)
2. Process building WOPP follow up contract agreement TDM site as Trustworthy and
reliable

 Care
1. Good environment so healthy respectful employees
2. Add value and save fuel reserve for kind and generous company

 Synergy
1. Good supporting and sharing by TDM management
2. Be able to adapt team to good networking in diverse situation

Driving Competitive Advantage through Innovative Cost Optimization 12

 th
The 12 Technical Meeting, 13-14 May 2013

3. Good work and communication with other department (Cross Functional Team in
Strive for win-win)

7.0 CONCLUSIONS AND RECOMMENDATIONS

We believed, having these WOPP can bring and help TDM to reduce cost, however we still have to
continuously learn, analyze and review how to maximize utilize this system.

7.1 Conclusion:
1. Using Waste Oil for blasting is one of the energy conservation.
2. Using Waste Oil for blasting does not impact to fragmentation.
3. Using Waste Oil for blasting does not impact to environment.
4. Fuel consumption reduction about 34% or 0.011 USD/BCM.

7.2 Recommendation for further improvement:

1. Considering to test VOD (Velocity of Detonation) of blasting agent ANFO
2. To study mixing ratio of waste oil and fuel to be 80:20
3. To study waste oil to mix with emulsion

Driving Competitive Advantage through Innovative Cost Optimization 13

 th
The 12 Technical Meeting, 13-14 May 2013

APPENDICES
Appendix provide nonessential but support information or disruptively long information.

Driving Competitive Advantage through Innovative Cost Optimization 14

 th
The 12 Technical Meeting, 13-14 May 2013

REFERENCES

Driving Competitive Advantage through Innovative Cost Optimization 15

 th
The 12 Technical Meeting, 13-14 May 2013

Curriculum Vitae
Name Mr. Arman Ismail

Job Position Mining Engineer, Kitadin Tandung Mayang

In Banpu/ITM
2009
since

2003 - Mineral Technology Faculty in National

Education
Development University “veteran” Jogjakarta

Feb 2009 – Present :Mining Engineer, PT.Kitadin site Tandung

Mayang
Experience
Apr 2008 – 2009 :Mining Engineer, PT.BUMA

About Myself - Simple and Religious

- Software and Discussion of technical issue

- Fleet Management System
Technical Areas of Interest
- Blasting computerized
- Mine plan integrated

Driving Competitive Advantage through Innovative Cost Optimization 16

 th
The 12 Technical Meeting, 13-14 May 2013

Curriculum Vitae
Name Mr. Yunianta Irvana

Operation Dept. Head, PT. Kitadin site Tandung

Job Position
Mayang
In Banpu/ITM
Oct 2005
since

1998 - Mineral Technology Faculty in National

Education
Development University “Veteran” Jogjakarta

2012 – Present :Operation Hept Head, PT. Kitadin site Tandung

Mayang

2010 – 2011 :Operation Superintendent, PT. Kitadin site

Tandung Mayang
Experience
2007 – 2009 :Field Coordinator, PT. Kitadin site Tandung
Mayang

2005 – 2006 :Mine Planner, PT. Kitadin site Tandung Mayang

About Myself - Hard working and Religious
- Fleet Management System
Technical Areas of Interest
- DrillNav System

Driving Competitive Advantage through Innovative Cost Optimization 17

 th
The 12 Technical Meeting, 13-14 May 2013

Curriculum Vitae
Name Mr. Preecha Mora
Job Position Department Head Drill & Blast
In Banpu/ITM
1995
since

Mining engineering technician professional

Education
Phuket Technical College, Thailand

Aug 2006 – Present :Drill & Blast Department head, ITM Kitadin
Tandung Mayang, Indonesia
Experience
Mar 1995 – Jul 2006 :Coal & OB Operation Supervisor, Banpu
Public Company – Lampang mine, Thailand

- Hard working
About Myself
- Enthusiastic on new technology

- Drill & Blast Technology

Technical Areas of Interest
- Drill Nav system

Driving Competitive Advantage through Innovative Cost Optimization 18