Light and Fast Mining

By Michael Arnold.

Patrick Hollingworth, mountain climbing extraordinaire and preeminent voice on the VUCA world (Volatile, Uncertain, Complex & Ambiguous) presented at the 2015 Scotford & Fennessy breakfast.  Many of you would recall he professed that organisations structured to be ‘light and fast’ are a way of dealing with the rapid pace of change in the VUCA world.  In a mountain climbing analogy, Patrick argues that Alpine style (think pack light, take only what you need, travel in small groups, be nimble) organisations, as opposed to Expedition style (think pack everything, take everyone), are more effective and successful at dealing with the challenges of the VUCA world.  That’s all well and good for tech start-ups able to work from their parent’s garage, but where does this leave mining organisations where the terms ‘light and fast’ don’t exactly spring to mind?

We have however seen the mining industry adapt to generally lower commodity prices and uncertain market conditions, and many, if not all miners, have enacted some level of organisational change in an effort to achieve efficiency, cost-savings and flexibility of going Alpine style.  Alpine style changes we have noticed include:

  • Streamlining of decision making processes and decision making authority being pushed downwards
  • The demise of the 8 / 6 roster, replaced by the more prevalent 2 / 1 roster
  • Equipment operating policy changes and corresponding change to maintenance strategies
  • Organisational right-sizing with engagement of consultants and contract labour as needed
  • Commodity diversification strategy by traditionally single commodity miners
  • Owner operator sites becoming contract miner sites
  • More rigour around ROI decision relating to minesite capital expenditure
  • Innovation and utilisation of new technologies, systems and processes
  • Talent engagement strategies focused on engaging the ‘best in industry’, as opposed to ‘best on the market’

The bigger you are the harder it is to change, however even the major and more bureaucratically structured iron ore miners have made significant change to ensure survival and a pathway to growth.  Across the industry the wave of innefficiency ridden in boomtimes has been replaced by LEAN philosophy and action.  We have seen mining houses such as Northen Star perform fantastically well, having aquired sites from traditionally Expedition style operators, then applying their own Alpine style approach to mining.

 

While there has been a reduction in mining employment over the last few years, the changes noted give rise to a more sustainable industry and one that can better deal with the challenges of the VUCA world.  When more favourable mining conditions return across commodities the industry will be primed for efficient growth.