Mines have always needed to balance their short-term and long-term goals. But, the uncertainty of 2020 is forcing mines to re-evaluate their previous priorities and reconsider how they function — now and in an increasingly uncertain future.
The global economic instability caused by the pandemic has frustrated industry forecasting. Gold mines have seen their values skyrocket, while formerly booming sites are now struggling to stay open with skeleton crews and additional protocols needed to keep operators safe.
In both cases, the outlook for the next couple of years is hazy at best. So, what can mines do to maximize their long-term profitability? There’s no one-size-fits-all answer. But, many sites are concentrating on making decisions for the short-term that still give them flexibility in the future.
For gold mines, maximizing productivity right now is the best decision for both short-term and long-term success. If a site can move 20,000 tonnes a shift at $1,800/oz. through the end of the year, it can generate almost as much value as producing 15,000 tonnes a shift at $1,200/oz. the whole next year (depending on grade and number of units, of course). The difference in profitability is huge. Consequently, these sites are searching for any way to ramp up production as soon as possible. Meanwhile, struggling mines can trust their long-term profitability, but need to optimize for efficiency over the next few months and keep overhead in check.
Gold mines have the luxury of acquiring powerhouse technologies to drive production, knowing they can recoup the expense quickly. Other sites have a tougher decision to make: Cut all expenditures and hope for the best, or make strategic investments to dial in processes and maximize efficiency?
Even if budgets are frozen, smart mines are always searching for ways to use the tools at their disposal to raise their performance. Austerity just gives them an extra incentive to learn more about their existing systems and processes, while turning to training and support to help them stay on target. (Want to learn how to use your existing tools to drive small improvements that compound to massive value? Watch the recent webinar from Wenco’s Centre of Excellence — A Matter of Seconds: How to Extract More Value from Your Mine Every Shift.)
At the bottom of all these decisions sits one key priority for the mining industry this year: rate of return on investment. Really, what strategic changes can mines make to raise profits in the shortest timeframe?
Options abound. Adding new equipment can raise production. New, experienced hires can help rein in inefficiency. Advanced data tracking and analysis can cut through the clutter and point to exact changes necessary to drive ideal results.
Still, many of these opportunities only generate ROI over the long term. They may be valuable, but their value can take years to manifest. Unfortunately, these uncertain times have made long-term results a luxury. Today’s mining environment requires us all to make good decisions that bear out in the next few months — not the next few years.