Mining for Efficiency, 2014

How a focus on equipment performance promises to unlock billions of dollars in productivity returns for miners

Australia’s declining productivity is one of the most important challenges for our economy. With the evolution of new technology and mining methods, combined with projects of ever increasing scale, one might have reasonably expected productivity in the Australian mining sector to have increased over time. But for a range of reasons, at an industry wide level, the reverse has actually been the case.

PwC's research reveals 5 key findings which are further detailed in the full report:

  • The global mining industry’s open cut equipment productivity has declined by 20% over the past seven years despite a push for increased output and declining market conditions.
  • Mining equipment in Australia runs at lower annual outputs than most of its global peers.
  • There is an inherent conflict between a productivity plan based on increased volumes and one based on cost reduction.
  • Company-wide equipment performance for many global miners sit in the second and third quartiles, and the differences between their best and worst performing mines are stark.
  • Productivity is heavily dependent on the way people act, more so even than the capacity of the equipment being employed.

The implications for improving productivity in the Australian and global open-cut mining sector are clear. Companies serious about both cost control and productivity need to have a greater focus on the efficiency of their equipment. This means stepping beyond short term cost reduction initiatives and a preoccupation with extra tonnes leaving the mines. What’s happening inside the gates is actually the key to arresting the industry’s productivity decline.

Contact us

Jock O'Callaghan
Global Mining Leader
Tel: +61 3 8603 6137
Email

Stephen Loadsman
Partner
Tel: +61 7 3257 8304
Email

Follow PwC Australia