Finding the “Sweet Spot” – Operational Excellence in mining industry

With the global mining productivity dropping substantially in 2014 focus on cost reduction and continuous improvement programs is gaining momentum.  With the price volatility, geopolitical risks, rising costs, declining grades the productivity in the industry will be challenging going forward.

The following information presented by Mining IQ has summarized the top take always highlighted in Deloitte’s report to achieve operational excellence:

Big Data i.e. Data analytics – With the focus on cost reduction mining industry has been using analytics for the past few years 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.

Innovation – 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 organizations 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, optimizing 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 organizations 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.


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