The FINANCIAL — Research suggests that an integration gap – between the mine and production plant, maintenance and supply chain – is causing a productivity loss of more than 20% in the mining sector.
To achieve the next level of productivity gains, a new EY report, How do you prepare for tomorrow’s mine today?, recommends that mining and metals companies look to other sectors like manufacturing for leading practices. While miners have made significant progress around cost reduction and labor productivity, asset productivity continues to lag.
Paul Mitchell, EY Global Mining & Metals Advisory Leader, says:
“Solving the integration gap requires miners to adopt a manufacturing mindset. We recognize that factors like geographic diversity, ore body knowledge and, at times, even weather mean that it is difficult for miners to control variability and adopt practices developed by manufacturing companies. But we believe that this variability can be managed through adopting an integrated process model approach to the business, aligning digital investments to productivity outcomes and embedding a zero loss culture in the organization supported by strong leadership and employee engagement.”
The reportoutlines the need for an integrated market-to-mine process model approach to help ensure that each element of the business, from the resource in the ground to the product being delivered to customers, is optimized as a business system.
Senior mine managers and executives interviewed for the report agreed this approach would help to reduce complexity. To date, a process approach has been implemented for back office processes but not service functions such as asset management or marketing, or core functions such as mine production or mineral processing.
Mitchell says: “Process models allow companies to be more agile, and with this, better manage variability from market-to-mine. That’s especially important in today’s market where miners face the difficult task of responding quickly and effectively to volatile market conditions.”