Mining is entering a new era, and as it moves from the previous boom into an age of optimising productivity, the operational landscape is transforming. High commodity prices in previous years meant that large capital investments were not an issue for operators. However, these investments concealed growing deficiencies in mine site effectiveness.
According to new research, mining operations around the world are 28 percent less efficient today than they were ten years ago. Data from McKinsey’s MineLens Productivity Index (MPI) highlights the mining industry’s level of efficiency is declining globally. This trend is evident across commodities and does not differentiate between companies.
McKinsey attributes the decline to the former demand supercycle which saw the production of certain commodities rise by 50 percent over the past decade.
Higher prices and improved outputs meant miners lost sight of productivity goals. As ore demand increased, capital expenditure and operating expenses started to grow at rates significantly higher than increases in production volume.
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 Productivity in mining operations: Reversing the downward trend, McKinsey MineLens Report http://www.mckinsey.com/insights/energy_resources_materials/productivity_in_mining_operations_reversing_the_downward_trend