Recent mining publications have been reflecting on the current state of the industry, many referring to the cumulative effect of decisions made in response to both the pandemic and the GFC. Citing poor investor confidence, the dangers of knee-jerk cost-cutting exercises and business initiatives that lack any long-term strategic intent, the expert view is that now is a prime time for reflection, planning and action.
MEC Advisory believes these are critical considerations prior to the development of any holistic strategic plan:
- Consider the efficacy of adopting business improvement methods which are not specifically created with mining in mind. The mining industry’s unique idiosyncrasies and operational challenges require bespoke methods to ensure all aspects of an operation dovetail seamlessly. Borrowing a method that works in another environment will inevitably have weaknesses – often only apparent at a critical, but expensive moment. For this reason, it is worth engaging companies and consultancies with proven and practical industry experience that have tailored an approach to maximising value and supporting the continuity of mining operations.
- Consider the viability of extraction methods to maximise value from mineral assets. Whist tried and tested methods have value, reviewing each operation with new eyes (and the latest technology and research findings) can boost profitability. This can be particularly true for those operations which have a long operational history of mining using the same methodology.
- Communicate the strategy. Low performance on site is invariably the result of poor strategy or a mismatch between the intent and the practice. This can manifest in numerous ways – a lack of clarity in communicating the strategy to the ground-force, or sub-par technical knowledge resulting in poor, or even dangerous, execution of the strategy. Not only is establishing clear lines of communication a crucial component but regularly reviewing its effectiveness is paramount in avoiding breakdowns and costly interruptions.
- Ensure that the geotechnology remains central to mine strategy. Though perceived as critical at the outset, later technical interventions are sometimes considered an expensive ‘impediment’ to progress. However, the long-term rewards in terms of on-site safety and output outweigh any interruption to operations.
- Future proof operations by ensuring all components of an operation dovetail. Any operator knows that unit costs escalate when production stalls – rosters are misaligned, or unanticipated bottlenecks leaves teams idle. Engaging a knowledgeable, experienced team to strategise the business improvement plan from the outset can minimise impact through modelling scenarios. The objectivity of an external consultancy who collaborate with the experts from the operation is often a winning formula for effective planning.
- An effective business plan should have numerous positive outcomes. Not only should it provide a strategic map for the operation ensuring the viability, productivity and profitability of the project but it should also generate a confidence in the operation that filters through the workforce and employees. A healthy operation is crucial to retaining key personnel and that is invaluable in keeping strategic knowledge where it’s needed – in your hands.