Mining Business Model basics to achieve improvement and efficiency in productivity

In the past, the mining sector has primarily focused on traditional mining business models to improve productivity. However trends are now revealing that enabling infrastructure is the central cost in developing new mines. As a result, mining companies now need to look beyond traditional mine development methods (such as geology, mining and processing) and to new strategies to improve productivity and profitability.

Cost is only half the equation – Mining companies need to explore how to get better value from the resources they have. While cost is an important element, it’s not everything. Companies should be focusing more on value. Because the problem with reactive cost-cutting (particularly in the current state of the industry) is it should not be focused on exclusively and can potentially destroy mine value. A lean and innovative approach to keeping costs down, while focusing on value outputs is needed in order to regain footing.

Holistic approach – There are still practices in the mining industry using mine development methodology that may have been right for when mines were less remote and less complex, but are now outdated. For miners to improve productivity and ROI, they need to get an optimum ‘mine to port’ approach, and understand the whole value chain and integrated decisions across that value chain. By allowing and accepting new technologies and innovation the industry can achieve success.
Remove silos across the mining value chain – Like most businesses the mining industry tends to compartmentalize roles and job functions so that manager can control things. As a result silos can be quite common, resulting in bottlenecks in efficiency. Businesses that create integration across the value chain so those managers are removed from their silos and are thinking and being rewarded for the performance across the whole business will make a huge difference to the performance of their mines.

Focus on infrastructure and sustainability – In recent years, safety has become the number one important focus across the mining industry, with safety being built into projects. It is now a fundamental part of the way mines are developed and operated. Some might argue that sustainability is the new safety.Having a culture of sustainability will be fundamental to the efficiency of projects, enabling them to be delivered with the best ‘triple bottom line’ outcomes.

Embrace new technologies – The emergence of driver less vehicles and remote operating centers has increased efficiencies into the mining sector in terms of being able to manage with fewer resources and costs. Looking towards the future, it will be important for companies to embrace new and emerging technologies and understand how they can impact and improve bottom line efficiencies.

Source – Mining IQ

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