Scania’s Swedish subsidiary has entered into a long-term agreement commencing in late 2012, which will ensure safe road transportation of iron ore concentrate until 2021 from Northland Resources’ ore-mining operation at Pajala in far north Sweden. The order is worth about SEK 1.5 billion. Scania will deliver a total of about 400 complete truck-and-trailer combinations and service-related products tailored to the mining industry’s very strict demands in respect of load capacity, uptime and delivery precision. The order was placed by the mining company’s general contractor Swerock, which is a subsidiary of the Swedish construction and civil engineering company Peab.
Scania’s overall undertaking covers delivery of truck combinations with specially built trailers, driver training and coaching, vehicle monitoring, maintenance and repairs of trucks and trailers, including tires, supplies and service. The deal will be financed by the Swedish subsidiary of Scania Financial Services.
“This is the most comprehensive deal we have concluded to date with the Swedish mining industry. We have used the overall competency of the Scania organization to cater for the various parameters, which aside from the trucks and trailers themselves, are crucial for our customers’ profitability. For instance, Scania has also been involved in planning the transportation arrangements and road transport infrastructure,” says Sandro Grimpe, Service Marketing Director at Scania-Bilar Sverige AB and who is responsible for the deal with Peab’ subsidiary Swerock.
Agreement on continuous improvements
Under the agreement, Scania undertakes to meet the mining company’s requirement that it should continually reduce the cost per tonne transported over a nine-year period based on performance indicators for expenditures on fuel, tires, repairs and maintenance.
“The order represents a success for our efforts to meet the mining industry’s strict demands for comprehensive solutions. Scania not only delivers production equipment, i.e. vehicles, but also services that are optimised for cost-effective, heavy haulage round-the-clock,” says Björn Winblad, Managing Director of Scania’s Mining business unit.
To ensure vehicle uptime, Scania’s Skellefteå Bil AB dealership in northern Sweden will expand operations at its service workshop in Kiruna. In the future, it may be necessary to establish a service business in the Kaunisvaara area (near Pajala) as well.
Another part of Scania’s overall undertaking is that both trailers and the ‘dolly’ which is used to connect the truck and trailer will be fitted out with axles made by Scania.
“This means that our workshops can maintain just as high service competency and accessibility to parts for trailer axles as for Scania’s own vehicles,” says Grimpe.
Scania has initiated efforts to supply components manufactured in-house to trailer producers, for example. These operations are organised in a special business unit, Scania Components.
“We will help broaden Scania’s business and customer offering,” says the head of the newly-formed unit, Michael Sjöberg.
Long driving distances
The Scania trucks will enter into round-the-clock service with annual driving distances of 400,000 km for haulage of the concentrated ore to railway depots for reloading to the Iron Ore Line (Malmbanan), a railway that will carry the ore to the port of Narvikon the Atlantic coast of northern Norway. The rigs are optimised for gross weights of up to 90 tonnes.
When the mining operations are fully developed in 2015, some 80 trucks and 400 drivers will be responsible for ensuring road transport of the almost 5 million tonnes of iron ore concentrate which will be produced annually in the Pajala area according to current production plans.
