With mining productivity dropping to new lows in 2014, mining companies are examining all factors contributing to this dip in productivity and have begun implementing the strategies needed to improve performance and set the industry back on track.
According to Deloitte’s annual ‘tracking the trends report’ for this year, price volatility, geopolitical turmoil, rising costs, declining grades and a general lack of financing would make productivity improvement in the mining sector a challenge in 2015.
For the most part, mining companies are rising to these challenges by strengthening their cost reduction and efficiency programs to regain momentum.
Below Mining IQ has summarised the top take always highlighted in Deloitte’s report to achieve operational excellence:
- Data analytics are here to stay
It’s no secret that over the past couple of years mining companies have been using analytics to reduce costs associated with operations, maintenance, safety and supply chain management. And as data analytics technology becomes more sophisticated, new opportunities for greater efficiency will arise and increase performance in areas such as workforce planning, mine planning and asset performance. In time, operational excellence will likely hinge on a mining company’s ability to effectively interpret the massive stores of data it collect.
- Be innovative
Like most industries, the mining sector is starting to face challenges posed by digital disruption. New technologies, greater reliance on renewable energy sources and electrification are all factors organisations need to embrace in order to cut costs and improve productivity.
- Transparency is key
Lack of communication between head office and disparate mine sites is still a common issue faced by most in the mining. To driver greater operational control, companies should aim to create transparent information flows between departments via enterprise-wide operational management systems. This will help companies make more informed and strategic decisions and ensure each mine site is operating as efficiently as possible.
- Drive an operational excellence culture
There’s no point in having a strategic plan to improve productivity if you don’t have your people on board. Companies need to approach operational and cultural transformation from the top down, taking and enterprise-wide view of operations.
- Back to basics
In an effort to boost capital, many mining companies are going back to basics. Take a look at your management and operational systems and decide which areas can be adjusted to improve efficiency. This may involve streamlining inventory, optimising working capital or pursuing lean operations.
- Re-visit management and governance structures
Many mining companies are currently streamlining their lines of accountability to gain greater visibility into the performance of particular commodity portfolios, existing mine plans and previous capital commitment plans. The aim of this is to avoid operational missteps and move beyond basic cost cutting exercises in order to improve productivity.
- Expect the unexpected
In an environment where anything can happen, mining organisations need to be prepared for the unknown and create robust scenario planning capabilities that position them to adapt to a wide range of potential future outcomes