The development and application of key profit drivers in mineral resource management
Van Niekerk, Gerhardus Johannes
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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.