Better use of equipment in open cut mines can boost productivity: PwC

14 August 2014 (Last Updated August 14th, 2014 18:30)

Better use of mining equipment in open cut mines can boost mining productivity and efficiency, according to the 'Mining for Efficiency' report by PricewaterhouseCoopers (PwC).

Better use of mining equipment in open cut mines can boost mining productivity and efficiency, according to the 'Mining for Efficiency' report by PricewaterhouseCoopers (PwC).

The report, which took data from 136 open cut mines and 4,760 pieces of equipment world-wide over a 20-year period, found that productivity for global open cut mining equipment fell by 18% from 2006 to 2013.

PwC energy, utilities and mining leader Jock O'Callaghan said the data commonly used to measure productivity had lead the industry to wrongly equate enhanced productivity with cost-cutting and increased volumes.

"The reliance on those measures sheds light on why productivity remains in the doldrums."

"Boosting volumes and cutting costs are one part of the solution but, by themselves, will fail to deliver the big gains the industry needs."

PwC's report claims that cutting costs and increasing production volumes alone will not help the industry gain efficiency.

Instead, companies could earn billions by better using the excavators, draglines and haulage trucks deployed at open cut mines, the report suggested.

"Boosting volumes and cutting costs are one part of the solution but, by themselves, will fail to deliver the big gains the industry needs and, in many cases, believes it is achieving," O'Callaghan added.

"The fact is that a mine can both increase volumes and cut costs but still suffer lower productivity."

Comparisons show that Australian firms are worst in the world, after Africa, in terms of using their equipment to gain efficiency.

The fall in Australian productivity came despite a 17% annual increase in investments in new earthmoving equipment by mining firms, which helped them attain an aggregate output of only 5%, slightly ahead of their target of 4.2%.

O'Callaghan said: "The problem for miners is that many are not even aware how poorly their equipment is performing against their peers.

"The numbers tell us that the industry has failed to respond very well to changing economic circumstances at any time in the past decade.

"Critically, the industry has not demonstrated any discernible change in how it operates mines over the past seven years, despite significant changes in commodity prices."

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