The development and application of key profit drivers in mineral resource management
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Date
2002-02
Authors
Van Niekerk, Gerhardus Johannes
Journal Title
Journal ISSN
Volume Title
Publisher
University of the Free State
Abstract
Every mining operation is constantly seeking for new ways to manage a broad range of
business variables. Managers across the production chain find themselves torn between
the initiatives to reduce costs, balancing throughput and asset utilisation improvements,
maintaining product quality, and other similar performance indicators. This they do in their
respective areas of responsibility, measuring against their set targets. Herein lies the
dilemma: Which operational factors will maximise the profit of the organisation as a whole
as opposed to the individual areas. And what is the impact of parameters outside their
domains on their performance areas?
Phalaborwa Mining Company has been no exception in this scenario. With time the same
issues and operational challenges were presenting itself to the management team. The
question had to be asked: Would a fundamentally new approach to viewing the business
unearth anything new and useful to take this remarkable company to new heights? This
study was launched to challenge the views of business and to offer answers to the above
dilemma.
The study has shown a remarkable degree of interlinkedness between production
variables across the production chain. For instance, the mineralogy and petrology of the
rock mined had strong effects in the milling, flotation and even smelting processes, and the
status of the metal market price conditions offered exciting options to operational
managers, provided the relationships are understood. Using an integrated model the
magnitude and nature of interrelationships between the drivers of performance are
explained. As a result it could provide the capability to "play off' costs against benefits for
operating decisions. For example: How long should one keep the open pit mine
operational and should it be decommissioned at the same or at a different time as the
downstream units?
The integrated nature of the business model clearly showed that to reach optimal
performance for the whole company, decision-makers across the production chain need to
plan collaboratively. It was evident that the powerful modelling approach will loose its
effectiveness if the organisational thinking is not changed to a collective one. The model
therefore, could only be effective if it is embedded into the planning and monitoring
business cycles.
Description
Keywords
Copper industry and trade -- South Africa -- Phalaborwa, Organizational change, Mines and mineral resources -- South Africa -- Phalaborwa, Dissertation (M.Sc. (Geology))--University of the Free State, 2002