Engineering & Mining Journal

JAN 2013

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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O P E R AT I N G S T R AT E G I E S tion to windfall taxes, resource taxes and export controls, making it harder for mining companies to accurately forecast production schedules, understand long-term risk profiles, or develop models to guide decision making over time. Miners need to work to strengthen their relationships with national governments, diversify their commodity mix and geographic area of focus, and demonstrate the industry's value to local governments and citizens. • Combatting corruption: Mining companies are already adopting global transparency standards to counter the risks posed by corruption, but they will need even more responsible practices in the face of heightened regulatory scrutiny, both of themselves and their partners, suppliers, service providers, vendors, agents and intermediaries. Combatting corruption will require the adoption of strong corporate practices and procedures, including third-party relationship management, internal compliance programs, and investigation readiness. • A new level of responsible behavior: Corporate social responsibility extends beyond impact assessments and now requires meeting the expectations and de- www.e-mj.com mands from Non-Government Organizations (NGOs) and other relevant stakeholders, and operating with higher levels of transparency and sustainability. Mining companies will need to commit to a higher level of responsible behavior by embedding sustainability into their internal metrics, their capital project methodologies and their negotiations with local communities, governments, NGOs and regulators. • Skills shortages: While the immediate pressure on the labor force has temporarily eased in some jurisdictions as mining companies postpone projects or reduce production, the looming skills shortage in the long run remains chronic. Mining companies should tackle the skills shortage by strengthening their team's skillset, re-training existing workers to fulfill different functions, recruiting from non-traditional labor pools, sponsoring university programs and engaging in workforce planning. • Analytics to improve safety outcomes: The dangers associated with mining are on the rise, particularly as companies move to more remote and less hospitable regions. To better understand the factors that cause safety incidents, mining companies should implement predictive modeling and apply new analytical tools and technologies to existing processes to improve preventative maintenance, identify at-risk segments and improve safety outcomes. • Getting the most out of emerging—and existing—technologies: Despite demonstrated willingness to innovate, many mining companies fail to leverage back-end technology such as data analytics or properly integrating disparate technology platforms following an M&A.; To improve operations while reducing costs, they should revisit their IT strategies and consider investing in programmable logic controllers (PLCs), supervisory control and data acquisition (SCADA) systems, manufacturing execution systems (MES), business intelligence systems, data analytics and advanced manufacturing systems. The report concludes that mining companies that proactively resolve these endemic issues will be better able to meet future commodity requirements despite today's volatile conditions and are likely to increase their role in the advancement of local communities, support of undeveloped economies and growth of jobs and skilled talent around the world. JANUARY 2013 • E&MJ; 87

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