Is a Holistic Approach Needed to Address Falling Mining Productivity?

In a recent podcast, McKinsey’s Chris Mulligan and Mukani Moyo discuss the state of the mining industry. When the conversation turned to productivity, some interesting facts came to light. Perhaps the most significant is that mining productivity has fallen by a third over the last ten years. That’s right. Despite all the buzz amongst mining companies about the drive to improve productivity since the first downturn in 2008, it fell.

 mining productivity

Mulligan and Mayo believe productivity fell because “mining companies have tended to focus either on cost reduction or on throughput improvement, but not necessarily on mining productivity in the holistic sense.” They add that “… this matters. Because mining is inherently a game of trade-offs, right? So there’s always a tension between capital invested versus your operating costs, for example. If we look at the narrow view of just one versus the other, we don’t get the full picture of how we’re optimizing those trade-offs. I think a big area of focus is going to have to be in building up the capabilities around lean operations, and asset productivity.”

While acknowledging that the mining industry has been slow to adopt new technologies, they believe that it must address this when thinking about technologies that will change mining.

By tapping into more of the data that is produced by during mining operations, it is possible to enable this holistic approach. If this can be achieved, a reduction in the variation in processes can be realized through an understanding of how the whole production ecosystem functions. Through this, stabilization of production can be met, and ultimately made more agile.

To learn more about this, watch the INFOGRAPHIC, and read the white paper Leveraging the Industrial Internet: Employing a business platform for operational excellence in mining sheds some light on out what the mining industry can do to implement holistic views of their operations.

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Mark Bese

Mark Bese

Industry Marketing Director at Dassault Systèmes
Mark Bese is the Industry Marketing Director for Natural Resources at Dassault Systèmes. His scope within Natural Resources encompasses mining, upstream oil and gas, water, and agriculture and forestry. He began his first engagements in mining almost 15 years ago marketing software solutions.