Valve manufacturer Atval successfully delivered three 800 mm pinch valves – the largest valves of this type ever manufactured by Atval – to gold miner AngloGold Ashanti’s Siguiri mine, in the Republic of Guinea, in September 2012, enabling the miner to increase its ore processing from nine-million tons a year to 12-million tons a year.

The project was completed in four months and comprised the design, tooling, manufacturing and testing of the valves. The nominal bore 10 bar KE series pinch valves, with enclosed body design, were fitted with B-grade heavy-duty natural rubber sleeves.

The valves were installed on the ring main of the Siguiri gold plant’s tailings facility, where AngloGold Ashanti increased its pipeline from 700 mm to 800 mm in diameter to accommodate the increase in production.

“Pinch valves were used in this application owing to their longevity in high-wear applications,” notes Atval director Mark Atkins, adding that delivery of the valves was on time and within budget.

The valves were fitted with double-acting hydraulic cylinders, which were manually actuated by hydraulic hand pumps that were welded to the side of the valves.

Atval owner Ted Atkins notes that the size required for pinch valves in South Africa is seldom bigger than 500 mm.

“Larger valves are, generally, used in applications where there are low yields of precious metals in the rock,” notes Mark Atkins, adding that Atval previously manufactured an air-operated type of pinch valve of the same size.

“We had previous experience in manufacturing an 800 mm valve to assist with water distribution in the Lowveld, Mpumalanga. The expertise gained from that project helped us successfully complete the AngloGold Ashanti project,” states Mark Atkins.

Ted Atkins points out that Atval manufactures all its own valves, as well as the tooling, and conducts its own testing to ensure a successful product. “This is an advantage that Atval has over its competitors – as all the technology is in-house and Atval can react swiftly to new customer requirements, which is a contributory factor to Atval being chosen by AngloGold Ashanti for its Siguiri project.

“Atval had to manufacture all the tooling required for the manufacturing of the valves. Once the tooling was completed, in-house machinery had to be built to handle the manu- facturing process,” explains Mark Atkins.

“The company’s plant is built to handle the manufacturing of valves up to 1 000 mm and the technology is capable of manufacturing large sizes. The South African market does not normally require valves above 600 mm diameter, but there are obviously requirements outside our borders that offer further opportunities,” notes Ted Atkins.

Challenges

Labour relations challenges, high raw-mate- rial input-cost challenges and higher manu- facturing costs, owing to electricity tariff hikes, are negatively impacting on the valves industry, notes Ted Atkins.

The National Energy Regulator of South Africa (Nersa) approved double-digit tariff increases for State-owned power utility Eskom for the 2009/10 to 2012/13 financial years, which resulted in increased tariffs of more than 60c/kWh, from 25c/kWh in 2008.

Under the second multiyear price determination (MYPD2), Nersa approved price increases of 25% for April 1, 2010, to March 31, 2013. In March last year, however, Nersa lowered the electricity tariff hike for the 2012/13 financial year to 16% from the 25.9% it had previously approved.

Eskom confirmed in June last year that its third MYPD (MYPD3) application to Nersa would be for a five-year period, rather than the three-year horizon that prevailed during the first two MYPD periods.

The power utility applied for an average price increase of 16% for each of the five years of the MYPD3, from 2013/14 to 2017/18.

“The current economic and political climate in the country is also having a negative impact on the valves market, because many new projects have been placed on hold. This is particularly relevant to the mining industry, which is an important market to Atval,” notes Ted Atkins.

He highlights constant fuel hikes and labour disputes, which spread through South Africa’s mining sector in 2012, starting at platinum miner Lonmin’s Marikana opera- tions through to the country’s gold sector.

Atval now aims to expand outside South Africa. “If we are going to grow our business in the short term, it has to be outside South Africa.”

The local skills challenge is also evident in the valves industry and has forced companies to provide in-house training for workers to improve their competence, notes Mark Atkins.

In addition, the cost of steel has a great impact on the valves industry, as at least 80% of the product is manufactured from steel components. “This is problematic, as the cost of manufacturing has dramatically increased and companies need to adjust to the high costs while competing against and dealing with cheap imports.”

Companies cannot, however, reduce the cost of their products, as this will reduce their profits and input costs can also not decrease, Mark Atkins states.

He notes that cheap imports are a great problem in the industry, as people do not consider the total cost of ownership and would rather look at short-term savings than long-term solutions. Cheap, imported valves also have safety consequences, as these products could be inferior, he points out.

Atval has been involved with the Department of Trade and Industry (DTI) for the last 18 months, together with the rest of the local valve and actuator manu- facturers in the valves industry, to support the designation of valves and pneumatic actuators for local production and content in the public-sector preferential procurement system.

The DTI announced in January the possible further designation of valves, manual and pneumatic actuators, electric and telecommunication cables, as well as com- ponents of solar water heaters.

Trade and Industry Minister Rob Davies signed the necessary authorisation needed under the Amended Regulations of the Preferential Procurement Policy Framework Act, adding that the National Treasury would in due course circulate the instruction notes, which would regulate the environment within which government departments and public entities might procure designated products. The instruction notes will have minimum local content thresholds.

“This initiative will help create employment and develop the valves and associated industries,” notes Mark Atkins, adding that Atval aims to target State-owned enterprises, such as those involved in water and power generation, more aggressively in future.