In June 2016, the UK made a momentous decision when they voted via referendum to leave the European Union. Brexit, as it became known, had repercussions that were felt across the world’s currency and commodities markets.
The move prompted a rally in gold prices, which boosted a number of large mining operations. Some companies reported projected increases in cash flow of up to 50% or more.
Gold prices surged even more spectacularly, as gold is traditionally seen as a haven in times of economic and political crises. Having fallen by 40% from a 2011 peak at US$1 920 an ounce, by mid-August the precious metal has risen by 25% so far this year to more than US$1 374.71 an ounce.
The surge in gold prices also largely affected the yields on bonds, which rose to all-time lows after reaching all-time highs at the beginning of the year.
It seems amazing that such a singular event can have such an effect on an industry. While the impact was not unexpected, the sheer scope of it makes you realise once again how important it is to be prepared and have plans for fluctuating commodity and currency markets in place.
It is the fluctuations in commodity and currency markets that makes the sale of mineral products so complex. Invoicing depends heavily on moisture and component analysis on both ends of the trading chain.
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.
With Dynamics xMMP (exploration, Mining and Mineral Processing), provisional invoices may be based on provisional analysis results, awaiting final results agreement. Retaining the history for umpiring, analysis and audit purposes makes for complex modifications of conventional ERP systems.
Equally important is the managing of the logistics elements (transportation, etc.) required for supply contracts.
xMMP module, PAM III, gives access to real-time information on the entire logistics chain. Mines can maximise commercial outcomes by charting the impact of sales and by gaining access to a current view of the available and upcoming supply of metals.
PAM III also provides comprehensive and integrated coverage of the logistics and sales processes for mining and mineral producers and traders. The very complex task of keeping track of batches, settlements, stock holding and remittances in multi-product toll-processing (in and out) is available through PAM III.
Commodity and currency markets will always fluctuate, but the Dynamics xMMP solution takes a lot of guesswork out of it and allows you to implement systems to monitor that which you can control and therefore manage to your best benefit.