A real commitment to analytics
May 15 - 21, 2013
ASSET management consultancy ScottMadden defines analytics as “the process by which we attempt to bridge the gap between knowledge (data) and action, and how we seek to ensure future actions reflect these data-driven insights.” Some mines have used analytics for amazing results but many haven’t.
Commitment to new ideas
May 1 - 7, 2013
IN the most recent Mining Intelligence columns I have said technology is not the answer to reversing low mining efficiency levels. I have stated most emphatically that it is the people who will drive change and they will use the tools at their disposal. The accessing and use of data is no different. Industry data is available and as HighGrade readers know well, I have been encouraging people to use data to add value in this column. Unfortunately, much of the effort has been poorly directed.
What role technology and software in mining renaissance?
April 17 - 23, 2013
IT SEEMS the common response to falling mining efficiency is, “we must find and implement new technologies to improve performance”. This seems reasonable. But surely the more pressing need is to halt the decline, and start clawing back the 26% in equipment performance lost since 2006. Surely we don’t need new technologies to regain what we previously achieved?
Technology won’t solve underlying operational problems
April 10 - 16, 2013
THE idea that a crisis presents strategic opportunities is not new. More market share changes at the bottom of the economic cycle than at any other time. Some of our mining companies are in crisis as are some of the suppliers. Now is the time to prepare for the inevitable switch to a focus on efficiency.
Never let a crisis go to waste
April 3 - 9, 2013
OVER the past few columns I have demonstrated how the ‘Smart Money’ has decoupled mining company valuations (share prices) from commodity prices over the past 4-6 years. It is interesting to note that the decoupling has not been so evident in Australia’s coal mining companies as it has been in gold or the diversified miners and yet it is the coal mines which have suffered the greatest fall in their commodity’s price.
Exceptions don't have to be exceptional
March 27 - April 2, 2013
I HAVE tended to be very negative towards the efficiency of the mining industry and I won’t apologise for that. Most mines are very inefficient but worse still they simply don’t care. But this week I want to demonstrate that there are exceptions. This week I want to highlight a mining company which has attacked efficiency and costs and has been rewarded by increased positive attention from “the smart money”.
Decoupling productivity and cost
March 20 - 26, 2013
MUCH has been written about the 10-year bull market for gold and whether it will continue. There is a bigger issue for Australia’s gold miners. Will they continue to accept the profitless prosperity they have experienced since 2008? Production is up, new mines are opening, employment is rampant – but where are the oceans of cash this prosperity should be generating?
Stakeholders must have bigger say in productivity turnaround
February 20 - 26, 2013
AS I detailed previously, in December 2012 the Australian Bureau of Statistics released its multifactor productivity numbers for 2011-2012. The mining industry in 2011-2012 was at 52% of the multifactor productivity achieved in 2000-2001. Shareholders should be appalled at how their investment is underperforming. I for one have, over the past three years, sold all my mining shares.
Mining efficiency, the Coal and Allied story
February 13 - 19, 2013
WHILE being of vital importance to the Australian economy the mining industry from the early 1980s to the 1990s provided little in the way of profitability to the owners and it appears to me like that is where we are heading now.
Mining efficiency, the Robe River story
February 6 - 12, 2013
ON July 31, 1986, Peko-Wallsend exercised its ultimate responsibility by replacing the management of Robe River iron ore mining and shipping joint venture. On August 11 the entire 1680 award workforce was dismissed due to the company not being prepared to abide by a second WA Industrial Relations Commission Order. There are some really important lessons to be gained from this part of Australia’s mining history and they are particularly salient now given the atrocious level of productivity at so many Australian mines.
Mining efficiency: no good news here, folks
January 30 - February 5, 2013
IN December last year the Australian Bureau of Statistics released the Multifactor Productivity numbers for 2011-2012. For those who thought it couldn’t get worse after the abysmal result for the mining industry in 2010-2011 (down 13%), prepare for a real shock. Our industry dropped a further 10.5% last financial year. We are now barely more than half as efficient as we were in 2000-2001.
Collateral damage!
January 23 - 29, 2013
MAKE no mistake about it the mining supply industry in Australia is hurting. If you are not a “necessary” part of just keeping the mines going you are having to fight for every dollar. But I question how sincere the mines are about genuinely reducing their operating costs when they are just so inefficient. And it isn’t just that they are so inefficient, it is just that so many really don’t care.
You can't ignore reality
November 21 - 27, 2012
I WAS listening during the week to Glen Stevens’ speech to the Committee for Economic Development of Australia, on ‘Producing Prosperity’. I need to say that I have a lot of respect for the governor of our Reserve Bank, in rather stark contrast to way I feel about many executives of our mining companies. However, this speech demonstrates the disconnect between our economic controllers and the real world.
Where to from here?
November 14 - 20, 2012
AFTER declaring last week that I had decided ‘Mining Intelligence’ was in fact an oxymoron, I wonder whether I have painted myself into a corner in a column using that same oxymoronic name where I am trying to communicate some of the intelligent things going on around the mining industry, or is my only choice to continue with a column exposing some of the genuine imitations of intelligence? I am clearly confused! At risk of creating a column with Seinfeld-esque qualities I have decided to pass my minor crisis and continue with my unbiased opinions.
The greatest oxymoron?
November 7 - 13, 2012
I HAVE had a number of people suggest over the past couple of years that using ‘Mining Intelligence’ in a trademark may have a negative connotation, as in, isn’t it an oxymoron? Until recently I had rejected this notion as I know a lot of highly intelligent people working in the mining industry and there are some really switched-on mining operations. I have changed my mind!
Strategies for the rich and famous, Part II
October 17 - 23, 2012
I WROTE last week that many suppliers talk about having a customer focused strategy. The problem with customer focused strategies is that they are almost always established in terms of the benefits to the seller.
Strategies of the rich and famous
October 10 - 16, 2012
IT IS probably not surprising that I was not one of those to receive the all-expenses-paid trips to MINExpo in Las Vegas courtesy of Caterpillar. I must confess the business class seats would have been nice. The Caterpillar strategy of flying people from all over the world to successive MINExpos has obviously been successful but I am hoping the mindset of the “mining decision-makers” who are obviously targeted for these trips will change and will start appreciating the value of efficiency as highly or preferably higher than relationships.
Making the right choice
October 3 - 9, 2012
THIS is the third week looking at this question of why we will often do more research to buy a mobile phone than we will to buy a multi-million dollar piece of mining equipment. I am not sure I have provided a good answer. Maybe this would be a good PhD topic? I again emphasise, material movement has a value. Moving more adds value; moving less costs value. But who cares?
If you have to spend money why not buy the best?
September 26 - October 2, 2012
MANY readers of HighGrade would subscribe to Choice magazine. I do. If you love information you will get it from a range of sources. Why? Because for something as small as a mobile phone or a vacuum cleaner we want the best. So why, when we are spending millions on a new loader or trucks for our mines do we not care about getting the equipment which will deliver the most value?
When cutting costs costs you more
September 19 - 25, 2012
I DON’T have the same eloquent writing style as the View From The West End but I wanted to touch on a few of the points from The View last week ... and not the one about us all being stuffed, (although I suspect there are a number of suppliers who this could easily describe at present).
