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Mining executives focusing on controllable factors during economic downturn |
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 In today’s economic climate, GoodOil asks: “What are mining executives’ concerns? What is their focus? And what role can Dingo play in helping them achieve their goals?”
We asked Ian S. Craig, BSc, F Aus IMM, former group vice president and managing director, Australian Operations for Peabody Energy Australia Coal, and a director on Dingo’s board, for his views of these issues.
GoodOil: “In today’s economic climate, what are mining executives’ concerns?”
IC: “In today’s tight economic climate, it would be easy and convenient for operators to blame poor performance on external factors, like price, cost, exchange rates, lack of demand – factors that, indeed, can impact the bottom line, but over which they have no control. Instead, I believe senior executives are concentrating on controllable factors that can offset the impact of external, uncontrollable factors, like the following:
- Safety. Safety is paramount. A good safety performance increases efficiency and reduces cost.
- Getting back to basics, i.e., concentrating on the operation’s core skill set.
- Capital. Executives likely will provide capital only for critical items, particularly those that can show a return within 12 months. This means that ancillary equipment and, indeed, major production equipment, will be kept running longer.
- Productivity, i.e., reducing operating costs while increasing efficiency. As the ink dries on a particular budget approval, the message will be to reduce the approved cost structure by 10-15 percent.
- Eliminating non-critical costs, e.g., consultants, contractors, etc.
- Reducing training to the bare essentials in line with cost reductions.
- Eliminating discretionary expenditures -- unless they can show a minimum 3-6 month return on expenditures.
- Increasing the utilization of equipment. Doing so will improve efficiency, productivity and cost reduction.
- Pressing suppliers to reduce cost to the company -- through shorter-term payments, longer supply contracts, etc.
- Defining clear performance goals. For example, increase haul truck availability by 5 percent,
increase dragline productivity by 5 percent, etc.
- Establishing clear reporting criteria to track performance and assure operations’ reporting and reviews on a regular basis.
- Developing teams to implement and review all change measures.”
GoodOil: “What solutions are mining executives seeking”?
IC: “Increasing market share is an obvious way mining operations can improve the bottom line in an economic downturn. Where the market is limited, this will be challenging, unless they have a superior product or an ability to go to the market at below-market price. Most companies are reluctant to do this; it can be done only when they have a clearly superior cost structure.”
GoodOil: “What role can Dingo play in helping customers achieve their goals?”
IC: “Dingo and its services fit neatly into executives’ priorities. Mining operators can do only so much without the newest technology Dingo offers. Dingo can help them improve efficiencies, lower their costs and increase productivity.
“Meanwhile, Dingo can help mining companies improve their bottom lines using our strength in personalized customer service and top-of-the-line products. We can help them win by helping them lower costs, increase the running time of their heavy assets, increase efficiencies and more.
“During my short time of the Dingo board, I’ve been impressed with our ability to deliver. The current climate is the perfect time for Dingo to take its message and services to the mining executive.”
To learn more on how Dingo may be able to increase your productivity and lower costs, call Dingo in Australia at (07) 3115 9000, in USA and Canada at 1 888 DINGO 30, or e-mail bwilliams@dingo.com.
Join discussion on this topic - post your comments on the Dingo blog.
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