As the new year is already in full force, the mining industry has set its sights on the challenges and opportunities that lie ahead this year.
According to professional services firm, EY, mining and metals companies will face 10 business risks in the new year. We will look at 6 of these risks in this two-part article.
Mining and metals companies have increased their focus on cash as they seek to maintain strong balance sheets and plan for longer-term profitability. According to EY there are three key focus areas where mining and metals companies can effectively manage their liquidity. These include making sustainable cost reductions that do not erode value, increasing the focus on working capital and improving capital effectiveness.
Capital raising costs have become an issue for mining and metals companies in recent years. Per EY this is likely to continue in the new year unless the commodity pricing environment improves., extending trade and long-term financing at an increased cost to those mining and metals companies with sufficient security to back the debt. This situation has however encouraged mining companies to seek out alternative means of accesses capital.
xMMP (exploration, Mining & Minerals Processing) is a mining “ERP” solution that covers the Total Life of Mine (‘LOM’). Managing mineral rights (tenements) claims, exploration, drilling, EPCM for the development phase, actual mining, stockpiles, plant, shipping and dispatching all the way to mine rehabilitation.
As always productivity is a key focus area for mines. During the boom, mines focused on “volume at any cost” which led to operations expanding quite rapidly. The result was an integration gap within business operations. Mines are now faced with the need to close this gap as it affects productivity negatively. Per EY productivity improvement is the responsibility of everyone in the organization. Relentless pursuit of loss, like zero harm, can transform the business so that too needs to be kept front of mind in the pursuit of increased productivity. Visible leadership and significant investment in culture change and capability are critical to reach the next level of productivity.
Keep an eye out for part two of our post where we look at the next three risks facing mines in this new year
Now more than ever mines need to have greater control over their operations and an enterprise resource planning solution that covers the total life of mine can help them do this.
Resolve Immix’s xMMP solution is exactly that, an addition to handling everything from managing mineral rights to shipping and dispatching and everything in between. It provides mine operations with the tools and real-time data needed to improve asset performance, impress compliance and increase production from the mine to final product.
Resources: Top 10 Business risks facing mining and metals 2016-2017