Pipelines are great alternatives for carrying suitable bulk mineral products. When buried these pipelines have low environmental and visual impact along their routes.
There are several components that make up pipeline operational costs. Generally the main operational cost of a mineral or tailings slurry pipeline is the pumping energy. This component is followed by spare parts and then labor costs.
Both the initial CAPEX deployment and OPEX costs must be considered in selecting the transportation means.
The total pipeline energy consumption is dependent on product lift or fall and the frictional loss within the pipe.
Depending on the pipeline route much of this transport energy may be provided by gravity, that is, without any pumping energy demand. In Brazil a combination of pumping and gravity are most common. In the Andes region of South America, where transport begins at 3,000 to 4,000 meters and flows to the coastal regions, very little or no pumping power is necessary.
In terrain like that found in Minas Gerais, Brazil, the energy consumption usually represents between 60 and 70% of the system operating cost, thus illustrating the importance of having an adequate control of this input.
Generally much of the supply of electrical energy for mineral concentrate pipeline transportation in Brazil comes from lower cost renewable hydroelectric sources; possibly making it a more environmentally friendly alternative when compared to other means of transportation.
Spare Parts and Labor
As pipeline equipment has a high operational factor, spare parts consumption is relatively low, being below the mineral sector’s normal 3% of equipment cost. Currently, most parts are nationally available yielding no great international demand.
Another important cost factor to consider is that the necessary pipeline operational staff is reduced relative to other transportation modes, yielding a significant cost savings. Pipelines do not require a large labor pool. A very large 500 km pipeline with two pump stations for example only requires about 120 workers for operation.
However, some specialty staff members are needed including technicians, which must have good hydraulics and pumps knowledge. The equipment in general is differentiated, mainly positive displacement pumps which demand specialised maintenance labor training. With well-structured and well-planned maintenance, the pipelines can have an operating availability of around 98%.
The pipeline operational risks are well below the other competing transportation modes such as rail and truck. It should be noted that slurry pipelines have been operating in Brazil for more than 35 years and have a record of very few personal injuries.
Let’s look at a practical energy consumption example for a hypothetical iron concentrate pipeline, leaving Minais Gerais iron quadrilateral for the southeast coast of Brazil. What would be the energy consumption per ton transported?
Of course the answer depends on several factors. However, taking into account a transport capacity of 20 million tons per year, the energy consumption represents approximately US$ 0.55 per ton transported – or less than a dollar a ton.
The operational cost is a very important factor when deciding on the most suitable product transportation means.
The financial risk of choosing a relatively low capital cost transportation system, but with high operating costs which can heavily escalate over time can be costly to the business in the future.
Carefully selecting a specialised company with know-how, a good project track record and successful projects is undoubtedly the main way to mitigate risk. Sometimes an economy in engineering that normally costs about 4 to 5% of the total project value can cost much more later. Choosing an unskilled company will certainly lead to some learning-curve project costs during this process and the impact will be directly felt on the project's financial return.
Engineering costs do not represent a significant final investment cost, but good engineering partner may represent an excellent result for the project economic-financial model.