Management innovation may be game changer for mining productivity – by Dorothy Kosich (Mineweb.com – October 20, 2014)

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According to a new study by EY and The Sustainable Minerals Institute, passion for innovation in the mining sector has not been lost.

RENO (MINEWEB) – Productivity is the number one challenge in the mining sector, says a new study by EY Global Mining & Metals and The Sustainable Minerals Institute at the University of Queensland in Australia.

During boom times, many mines expanded quickly to meet greater demand, ironically generating a decline in productivity levels, “primarily due to the challenge of managing complexity, compounded by the talent challenge, and lack of appropriate skills development,” observes their study titled Productivity in mining: now comes the hard part.

The report is based on more than 60 in-depth interviews with senior mining executives globally. The document assesses the key productivity challenges, initiatives being developed to overcome these challenges and opportunities to better focus productivity-improvement initiatives in the post-supercycle environment.

Among these are depleting reserves and falling grades, which have caused and continue to contribute to declining mining productivity. Meanwhile, the mining sector is also suffering from an aging workforce with retirement rates expected to increase over the next 10 years.

More recently, as metals prices tumbled, so-called “productivity” improvements have focused on cost cutting and the metals prices, which has led to short-term gains.

The good news is – despite job losses, expansion and project delays, and other cost-cuttings with the mining industry – the international mining sector has not cut back on funding for long-term innovation, John Steen, associate professor in strategy for the University of Queensland’s The Sustainable Minerals Institute, told Mineweb.

“In recent years, the passion for innovation in the mining sector has not been lost,” says the report. “New innovation can be a productivity game-changer, especially with ore grades declining around the world, and we are beginning to see some innovations underway.”

EY and The Sustainable Minerals Institute suggest, “An operational strategy is a great way to drive a common sense of purpose and unity within a leadership team and focus it on resolving the critical issue of integration as a way of transforming that business.”

The operational strategy should address the following key factors:

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