Moving Mountains | ScopeTalk

Imperative Innovation Moving Mountains

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Author: Adam Brew (BDM)

Not all has been well in the country’s engine room of the economy with the weakening of base metals and oil and gas prices over the last 6-12 months. With significant personnel reductions from the country’s biggest iron ore players, as well as downsizing coming from the mining services space, focus has been given to reducing costs and trimming the fat. However, once we have removed some of the human capital costs, what next? I ask myself this question and I extend it to you, “How can we drive more productivity and operate on tight margins to weather this storm and still be positioned for growth when the wider margins return?”

At the IMARC conference in November last year the hot topic was clearly systems innovation to drive process change and operational efficiency. However, comments from Anglo American’s Group Director Tony O’neil made it clear that with innovation and change come their own challenges to be managed. The central issue that organisations face when making the conscious decision to apply system and process changes to the business, is adoption rather than simply finding and introducing new technologies for the sake of change.

Particularly within the mining and resources space it is undeniable that certain considerations must be taken into account when planning to introduce any new processes, systems or tools that are unique compared to other industry verticals. You must evaluate;

  • Value of capital equipment
  • Sophistication and function of equipment
  • Crew and personnel to be managed, skills, competencies and qualification governance
  • Remoteness of operation as well as location of open pits and underground mines
  • Health and Safety considerations
  • Volatility in costing fundamentals based on commodity prices
  • Uncertainty in deposit formations and grade
Workers in a coal mine

While these factors and catalysts to change are known to us (and of no surprise), it is important that they are recognised and accounted for. This accountability ensures that adoption to change, and the introduction of new systems and technologies, will be successful and provide a bottom line benefit to the business.

“Good ideas implemented well – that’s innovation,” – Professor Chris Moran, of the Sustainable Minerals Institute. University of Queensland.

With the goal of innovation to be the improvement of financial outcomes through changing and adopting new technologies and systems of process, let’s for a moment consider the potential risks and specific challenges:

  • Capital Costs
  • Internal Resistance
  • Timing
  • Resource Availability – People, infrastructure
  • Market Dynamics/volatility

 

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