Why Mining Productivity is Critical

Mining productivity is not only critical for the profitability of individual companies but also for the sustainability of the industry as a whole. With declining ore grades and increasing operational costs, mining companies must find ways to improve their efficiency to stay in business. The ability to maximise productivity impacts a company’s bottom line, its capacity to meet growing demand, and its ability to manage environmental and regulatory challenges.

Mining companies that prioritise performance can reduce operational costs, increase profitability, and ensure the long-term viability of their operations. Performance allows companies to respond more flexibly to market changes. This means maintaining profitability even when commodity prices go down. It also enables them to operate more sustainably, reducing the environmental impact of their activities. Below are some specific reasons why mining productivity is essential:

• Operational Efficiency: Mining is a capital-intensive industry, and small inefficiencies can lead to huge cost overruns. By improving productivity, companies can streamline operations, reduce waste (i.e. idle time, human inefficiencies, equipment downtime), and enhance the efficiency of their processes thus becoming more profitable.
• Profitability: Improved productivity leads to higher output with the same or even fewer resources.
• Sustainability: As the global mining sector moves towards more environmentally friendly practices, productivity improvements can also reduce energy consumption and minimise environmental impact, making operations more sustainable.
• Competitive Edge: In an industry where prices are largely determined by the global market, improving productivity allows companies to operate profitably even when commodity prices dip, giving them a competitive edge.

Key Approaches to Improving Mining Productivity

A mistake frequently made during Performance Improvement Projects (PIP) is to think about the initiative in isolation. Or worse, just focusing at one type of improvement at a time.  Improving mining productivity is not about focusing on isolated parts of the operation. To successfully improve it should involve a combination of strategies that jointly create a more efficient and effective mining process. These strategies should include capital investments, optimising maintenance practices, fostering a culture of operational excellence, developing a highly skilled workforce and, embracing digitalisation. These approaches are not mutually exclusive. They must be seen as interdependent strategies that work best when applied together.

Each of these strategies brings unique improvement benefits. They also come with their own risks and challenges. Understanding these is critical for mining companies that want to improve their productivity without jeopardising safety, sustainability, or long-term profitability.

1. Capital Investments

Capital investment is about improving the technology used to mine or process the ore and is often necessary to enhance productivity. This may involve upgrading existing equipment, purchasing new, high-capacity machinery or, investing in the expansion of processing plants. These investments can lead to significant productivity gains, especially if the equipment is older. Modern equipment is typically more efficient and reliable than older machines.

For example, mining companies that invest in state-of-the-art drilling machines and automated haulage systems can drastically reduce the time it takes to move ore from the ground to processing facilities. Modern equipment is can also be more energy-efficient, reducing both operational costs and the environmental footprint of mining activities. However, capital investments come with high upfront costs, and the return on investment (ROI) is not always immediate.

Benefits:

• • • Long-term Gains: Modern machinery is often more efficient, leading to fewer breakdowns, higher throughput, and lower energy consumption.
    • Reduced Downtime: New equipment tends to be more reliable, which minimises downtime for repairs and maintenance, leading to more consistent production output.
    • Capacity Increases: Capital investments can increase the overall capacity of a mining operation, enabling companies to meet growing demand without significantly increasing operational costs.

Risks:

• • • High Upfront Costs: Investing in new equipment or infrastructure requires a substantial financial commitment, which may strain cash flow if not carefully planned.
    • Uncertain ROI: Without proper planning and maintenance, the expected productivity improvements may not materialise, leading to lower-than-expected returns.
    • Technological Obsolescence: The fast pace of technological advancements means that equipment may become outdated more quickly than anticipated, requiring additional investment sooner than planned.

2. Improving Maintenance

Maintenance plays a crucial role in a mining operation. A well-maintained fleet of equipment operates more efficiently, suffers fewer breakdowns, and has a longer lifespan. All of which contribute to higher productivity. In most mining operations, the focus has shifted from reactive to preventive maintenance, where the aim is to address potential issues before they lead to equipment failure. Understanding the equipment and its maintenance schedule can also help reduce downtime.

A key component here is condition monitoring. By using advanced sensors and data analytics, mining companies can monitor the performance of critical equipment in real time. This allows them to detect anomalies early and schedule maintenance before a minor issue becomes a major problem. This proactive approach reduces unplanned downtime and extends the useful life of expensive machinery, ensuring that mining operations can run smoothly and efficiently. Of course that is not always possible so other approaches like Maintenance Operating Model improvements may be used.  

Benefits:

• • • Maximised Equipment Availability: Regular maintenance ensures that equipment remains in optimal condition, leading to fewer breakdowns and more consistent operation.
    • Extended Equipment Lifespan: By addressing issues before they escalate, preventive maintenance extends the life of critical mining assets, reducing the need for costly replacements.
    • Reduced Downtime: Condition monitoring allows for real-time adjustments and predictive maintenance, which reduces unplanned downtime and ensures continuous production.

Risks:

• • • Initial Investment in Monitoring Tools: If used. iInstalling condition-monitoring systems requires an upfront investment in technology and training, which may be costly for smaller operations.
    • Poor Implementation: Without a structured approach to maintenance, companies may struggle to achieve the full benefits of condition monitoring and preventive maintenance.
    • Over-maintenance: There is a risk of over-maintaining equipment, where too much time is spent on routine maintenance, resulting in lost production time.

3. Operational Excellence

Operational excellence is a mindset and a methodology that seeks to eliminate inefficiencies, reduce waste, and optimise resource use in every aspect of a mining operation. This approach is based on principles taken from lean manufacturing and aims to streamline processes by identifying and removing non-value-added activities. In mining, operational excellence can be applied to everything from how materials are extracted and transported to how workers communicate and collaborate.

A continuous improvement culture is at the heart of operational excellence. This involves empowering workers at all levels to identify inefficiencies in the processes and suggest improvements. By fostering a culture of continuous learning and adaptation, mining companies can ensure that productivity gains are not just short-term fixes but part of a long-term strategy for operational success.

Benefits:

• • • Lean Operations: By eliminating inefficiencies and optimising resource use, companies can reduce operational costs and improve production speed.
    • Sustainable Improvements: A culture of continuous improvement ensures that productivity gains are sustainable and that operations can adapt to changing conditions.
    • Employee Engagement: Operational excellence involves empowering employees to take ownership of the processes they are involved in, leading to higher levels of engagement and motivation.

Risks:

• • • Resistance to Change: Employees who are used to traditional ways of working may resist efforts to implement new processes, leading to delays and inefficiencies.
    • Cultural Shift: Building a culture of operational excellence takes time and requires buy-in from all levels of the organisation, which can be difficult to achieve in hierarchical companies.
    • Difficulty in Measuring Success: The success of operational excellence initiatives can be difficult to quantify, particularly in the early stages of implementation.

4. Workforce Optimisation

When it comes to productivity, skilled and motivated workforce is essential. Workforce optimisation is not about reducing the workforce as many think. It is about improving employee performance through training, engagement, and performance management. In a labour-intensive industry like mining, having well-trained workers who can operate complex machinery safely and efficiently is critical. Moreover, workforce optimisation focuses on creating an environment where employees are motivated to contribute to the operation’s success.

One of the key strategies in workforce optimisation is employee upskilling. As mining operations become more automated and technologically advanced, workers need to be trained to operate new machinery and systems. And in some cases, the upskilling now takes place in VR, take a look here at few examples of VR training in mining.  Upskilling not only improves productivity but also increases worker satisfaction and reduces turnover. Performance management systems can also help to ensure that workers are meeting their productivity targets and that any underperformance is addressed promptly.

Benefits:

• • • Increased Efficiency: Properly trained employees can operate machinery more effectively and safely, reducing accidents and increasing uptime.
    • Employee Engagement: A focus on performance management and continuous training increases employee motivation and productivity, leading to higher job satisfaction.
    • Reduced Turnover: By investing in workforce optimisation, companies can improve employee retention, reducing the costs associated with hiring and training new workers.

Risks:

• • • High Training Costs: Upskilling workers requires investment in training programs, which can be costly upfront.
    • Slow Adoption of New Skills: Workers may be slow to adapt to new techniques or technologies, delaying productivity gains.
    • Inconsistent Performance Management: Without a clear and consistent performance management system, companies may struggle to ensure that all employees are meeting productivity targets.

5. Digitalisation

The latest performance improving mechanism is digitalisation. In mining this involves integrating advanced technologies like automation, the Internet of Things (IoT), and real-time data analytics into mining operations. Of course, all of these might not always be possible -internet is not always accessible. When they can be implemented, these technologies allow mining companies to monitor and control every aspect of their operations in real-time, leading to better decision-making and more efficient use of resources. Automation, in particular, is transforming mining by enabling machines to operate autonomously, reducing the need for human intervention in hazardous environments.

Autonomous trucks and drilling machines can operate 24/7 without breaks, significantly increasing productivity. Meanwhile, condition monitoring sensors can monitor the health of equipment, detect anomalies, and trigger maintenance before a breakdown occurs, reducing downtime and extending the life of critical assets. However, digitalisation is not without its challenges. It requires significant upfront investment in technology and training, and there are risks related to data security and the over-reliance on technology.

Benefits:

• • • Improved Decision-Making: With access to real-time data, mine managers can make faster, more informed decisions that optimise performance.
    • Increased Automation: Automation reduces human error and allows for 24/7 operations, significantly increasing productivity and reducing operational costs.
    • Enhanced Safety: By reducing the need for human workers in hazardous environments, automation and remote monitoring can improve safety and reduce the risk of accidents.

Risks:

• • • High Implementation Costs: Digitalisation requires significant investment in technology and training, which may be prohibitive for smaller mining companies.
    • Cybersecurity Concerns: Increased reliance on digital systems can expose mining companies to cyberattacks, which can disrupt operations and compromise sensitive data.
    • Over-reliance on Technology: Relying too heavily on automation and data analytics can lead to complacency, where human oversight is diminished, and critical errors may be overlooked.