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Sustainable Development Report for the year ended 30 September 2012

03/People, Planet, Profit

Case study:
(n) a detailed account giving information about the development of a person,
group or thing, especially in order to show general principles

Case study: Counting every drop – Lonmin introduces fuel management system

Pooling our resources to keep the Greater Lonmin Community clean

Diesel fuel is one of the largest operational costs to our mining operations. Even a small percentage of fuel saving can add direct value to the bottom line and is closely aligned with Lonmin’s objective of improving operating and environmental efficiencies. Fuel consumption is therefore worth monitoring and measuring.

Lonmin recognised the opportunity to reduce our diesel consumption by introducing a fuel management system in June 2011. This system is used to electronically monitor and control the receipt, despatch and reporting of fuel consumption. Typically used for fleets of vehicles, the system provides detailed daily reports of fuel consumption per individual transaction (driver and vehicle), giving us an accurate indication of how much fuel is stored in our on-site tanks, how much has been used and how much we need. All our vehicles and contractor vehicles that use our fuel have been registered and fitted with electronic vehicle identification systems and each of our on-site fuel tanks has been fitted with probes to facilitate the system. The system alerts us to any leaks or spills, allowing us to minimise waste, and prevent or rehabilitate ground contamination. In addition, monthly inspections of diesel tank facilities enhance continual improvement on environmental management at these facilities.

The fuel management system cost R8.1 million (US$1 million) to install and in just one year has saved the company R15 million (US$1.8 million). It is estimated that the system will reduce our fuel costs by 15% per annum, which in turn will reduce energy usage and carbon emissions.

A further benefit is that the system prevents vehicles with outstanding traffic fines, missed services or due for tyre rotation from filling up. Vehicles that are using too much fuel can also be called in for efficiency checks.