Mining Strategy: Top 4 priorities to maximize operational performance

Mining StrategyWith requirements of safety and mineral purity going up and up and up, how do mining projects still operate at enough profit to keep the mine in business?  Most leading performers in the mining industry cite capital projects delivery as the key to their success. Here, “leading performers” are those who deliver their projects consistently on time and within the prescribed budget.  However, even within the top performers, there is room for improvement of project management and delivery.

Mining Strategy

Projects are expected to increase in size and complexity, as the sites grow more remote and underground mines delve deeper thanks to new technology. With these new factors, safety and environmental regulations will also grow in complexity and importance. The bottom line: mining companies need to continually operate with enough profit to grow their company and expand their markets. How to compensate for a field of work that is expanding as rapidly as mining?

Mining Strategy

Mining Strategy

In our experience, here are the top four priorities that should guide your mining organization:

Talent and Leadership – project remoteness and complexity translate into several not very appealing job duties: time spent away from family and long, hard hours at work. The consequences: a great deficit in talented and educated mining professionals. Retention is another consequence – how disappointing to train and develop an employee only to have they bring those hard-earned skills to another company with a more desirable location!

How to address these challenges? There are a variety of ways to get around them. Some examples that have worked include turnkey contracts for EPC companies, contracting through partners, and investing in developing internal resources.

Front-end loading and scheduling – it is important for plans and strategies to be outlined as completely and thoroughly as possible during the very first stages of a project. One of the greatest sources of delay in projects is insufficient detail provided at the initial stages, and the delays that these cause can snowball forward and affect the entire project, delaying it by months or even years.

Technology Integration – IT systems are integral for data management, production tracking, budgeting, etc. Because of the magnitude and complexity of the projects, IT systems should be designed and integrated to mining projects as early as the planning stages. Big projects have correspondingly big amounts of data, and a robust IT system will be able to keep track of the data in an accessible, user-friendly format. Additionally, IT systems can output models and projections based on the data, allowing for more cohesive and thorough project planning.

Stakeholder engagement – stakeholders tell you what they ultimately want as project outcomes. They hold your social license to operate. As such, stakeholder perceptions should be managed to avoid unrealistic expectations. With environmental and legal regulations always in flux, maintaining an information line with your key stakeholders is a must.

So, if we follow these guidelines can we expect to become “top performers”? Well, not necessarily. There is a lot that goes in to being a company whose reputation and workplace environment are so desirable that they can choose which projects they want most. Top performers don’t need to advertise, their reputation. Our industry is “small” and word-of-mouth keep clients coming back.

The following attributes are some of the things that are developed in-house, and whose upkeep is overseen by the company every day, regardless of “hard times” or none.

High priority on project delivery – this seems like an obvious thing, but you’d be surprised! If a project manager sees deadlines as more suggestive than strict, it is almost certain that your project will run over its schedule. And if it’s on time, it will definitely run over on budget. If deadlines are missed by even just a few days, if it happens often enough the ripple effect will spread, causing other departments and projects to fall behind as well, and disorganization and stress will follow. A strict priority on meeting deadlines and budget requirements must be enforced strongly, every day.

Consistent use of data and analytical tools – Large acquisitions, profitability aside, can result in a lopsided portfolio, which causes the beta of a company to rise. The use of portfolio indicators is excellent for driving savings and performance improvements across the board. No project or market exists in a vacuum – you must constantly be watching the environment, watching the numbers and the indicators. What is the general feeling of the public? Where does it look like opinion is trending? Is there a portion of your portfolio that seems too large or too small? Constant vigilance is key.

Company culture – a strong, cohesive and nurturing company culture will positively influence how well and quickly your projects are done. If you have put in the time to develop your employees, as well as nurturing their “fun” side through rewards and activities, the culture you produce will produce an environment of trust and communication…which are both drivers in project delivery.

Stay tuned for our next Mining Strategy discussion coming up next week.

Feel free to comment/discuss/share. If I missed anything, Tweet to DrFranzC or leave a comment. Thanks for your feedback!

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