Is It More Cost-Effective To Treat Steel Structures Than To Replace Them?

In tough times, companies sometimes do not spend money on surface protection of steel structures. Corrosion occurs gradually over time, but when it is let go too far, the costs to repair are extensive.

We recently created a generic life cycle cost model and Net Present Cost (NPC), based on an assumed quantity of steel and surface area, to quantify whether it’s more cost effective to invest the resources cleaning and painting structures, than to replace such assets when corrosion becomes irreparable. Based on our analysis of the life cycle costs and NPC, we found that mining plant maintenance costs will be significantly lower when operations implement proactive maintenance strategies such as surface protection.

Surface treatment case

We calculated surface treatment costs by allowing for labour and $8,000 for preparing and coating over four days. The analysis assumed a surface treatment program duration of 30 years (between 2016 and 2045).

Over a two-year period, alternate structural and corrosion audits were allowed for in both cases. After Year Three, we allowed for surface protection repairs, and then every six years we allowed for sand-blasting of the steel works and surface protection replacement.

In addition, we estimated costs for each of the following tasks:

  • Structural audits: $20,000
  • Corrosion audits: $8,000
  • Two rounds of cleaning (one every six months): $4,880
  • Re-surfacing: $19,520
  • Sand blasting and re-surfacing: $39,040

The total cost of a replacement program exceeds $2 million.

Overall, the net present cost (NPC) of the proactive surface treatment option was $246,000, while total expenses over the 30 years of the program amounted to $810,400.

 

 

Replacement case 

In regards to the steelwork replacement case, we assumed the same costs for corrosion and structural audits over an 11-year period. During Year 12, we assumed that two principal structural engineers would need to conduct an engineering assessment valued at $40,000 every two years.

Starting from Year 15, we assumed a replacement of approximately 80 tonnes of steelwork and then 40 tonnes every four years to Year 26. The assumed costs of this reactive strategy are listed below:

  • Structural audits: $20,000
  • Corrosion audits: $8,000
  • Procurement of steel at Year 16: $480,000
  • Installation at Year 16: $101,440
  • Ongoing reactive repair costs: $318,720 over a four-year period after year 16

The reactive structure replacement case expenses total $2,373,600 over the 30 year period, and the NPC would amount to $467,000.

Why does it cost more to replace?

Maintaining steelwork condition reduces the corrosion and chances of failures. Structural and corrosion audits inform personnel of the risks, allowing them to target repairs.

Surface treatment programs incur lower expenses than replacement plans.

Clearly, every machine and every case are unique. It is possible to debate the assumptions of this small assessment and adjust estimates, however, the numbers show that, over the longer term, proactive cleaning routines and surface treatment programs incur lower expenses than reactive structural replacement programs. Allowing structures to corrode beyond repair also introduces additional plant downtime for replacement work, longer disruption to production, and increased risks during the maintenance activities as well as increased risks of structural failure during operations.

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