The Value Conundrum
The recent resurgence of the mining sector has brought a welcome increase in mining activity including increases in spending, earnings and merger and acquisitions activity.
In this article Deloitte state that to attract necessary resources Mining companies will need to do more to articulate their value and what they stand for. “Making technology a strategic priority” across every part of their business and pushing the boundaries of digital transformation is identified as a key factor of articulating their value and what they stand for.
Trend 1 - Rethinking Mining Strategy
Embedding the discipline to deliver measurable value across the cycle
Deloitte note that In the past mining companies have typically based their strategy around low cost production however this was linked to prevailing commodity prices, suggesting mining company’s cost control was more a margin control process.
The Hard Questions
Deloitte go on to identify 10 hard questions that management and boards can use to put their portfolios to the test in this phase of an upturn mining cycle. The first critical question and directly related to making technology a strategic priority is;
“Are we relentlessly focused on ensuring the cost competitiveness of our assets and to what extent are we embracing digital technologies to control costs?”
Deloitte have identified the criticality of cost competitiveness, with so many new entrants entering the mining market as commodity prices improve, it is critical for survival when the cycle shifts and prices drop that producers are at the lower end of the cost curve, or risk falling off the cost curve into closure. This question brings us back to the value conundrum identified by Deloitte, that mining companies need to make technology a strategic priority and acknowledge its roles as an enabler across every facet of their business.
Digital Technology & Business Intelligence
Business Intelligence is a key outcome from embracing digital technologies, which delivers critical decision making information swiftly and accurately. This Information not only enables cost control and improvement but provides a measure of the value returned.
Having the right information at your fingertips to make and measure critical business decisions is the key to deliver measurable value across the mining cycle.
Deloitte goes on to ask nine more hard questions of mining company’s management and boards, these can be read here: Tracking the Trends 2019
We have been developing cost management and business intelligence solutions
tailored for the mining industry for over 15 years. Our solutions have been highly developed and refined over many years and are delivered to you as turnkey out-of-the-box solutions that seamlessly integrate to your existing data and systems, providing you with the critical decision making information you need at the press of a button.
For more information:
“The right decision is the wrong decision if its made too late”
Lee Iacoca, Ford Motor Company