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As a mature industry, mining companies must achieve enhanced profitability, in large part, through best in class performance and disciplined cost control as market demand for their products strongly fluctuates. At any point and time, commodity prices may be high or low, but management teams know that commodity price levels are cyclical. In the face of fluctuating demand and cyclical pricing, operating an efficient and streamlined business, as well as squeezing costs, is critical.
Industry consolidation in mining has created large companies who are still discovering synergies to be achieved from merger and acquisition activity. Compliance costs for environmental remediation and enhanced safety standards have trimmed already thin margins. Achieving internal efficiencies ahead of the competition is a key challenge. Investing in medium and longer term process improvements and cost control measures makes good business sense whether prices and demand are high or low.