Many mining companies currently employ a reactive business plan that attempts to roll with the punches thrown by a volatile commodity market, with companies opting to slash costs when the market is down and rebound their operational expenses when the market recovers. However, this practice is fraught with risk and is somewhat unsustainable in the long run. Thus, mining companies are increasingly strategising sustainable practices abstracted from the effects of a roiling market.
Improve Financial and Risk Management
In construction, the practice of giving the go-ahead to major projects that depend on a favourable market for profitability has knee-capped many a business. Rather, companies should make conservative market estimates when conducting the risk assessments of major projects while keeping a tight leash on construction expenditure during the implementation phase.
A Clear Workforce Strategy
A coherent workforce strategy can drastically reduce operational costs through increases in productivity and reducing training costs. In short, companies need to foster a culture of employee retention, career development and local community training. Implementing these steps will lower workforce turnover and ensure that individuals with the requisite training and skills remain in the area in the event that additional employees are needed.
Investing in technology is sure to provide value irrespective of the state of the market. Whether it be productivity driving technology in the mine itself or technology that serves to streamline supply chain management, these innovations constitute real and lasting changes with almost no additional marginal cost outside the initial investment made.
Invest in Analytics
Utilising analytics is widely held to be the best way to not only ensure the solidification of past gains, but also to spot further inefficient areas within production and management. The conversion of raw data into compelling and revealing statistics naturally improves decision-making while it is hard to put a price on just how valuable the ability to compare one’s operations to industry standards can be.
Many a company has veered into insolvency by trying to time the market and, although maintaining sustainable practices can be difficult when the price of commodities drops, prudent risk management and sound infrastructure has proven time and again to be the best combination to get through a market trough.