The future of finance in mining

19/02/2016

The future of finance in mining

The economic slowdown has moved the focus of operational strategy from ‘getting tonnes out the gate’ to extracting high-margin ore. 

In times of high commodity prices, a focus on production can deliver the desired fiscal results and largely did for Australian operations.

During this period, operational mining professionals have not been required to be sensitive to elements of cost versus financial return, which has created a culture of spending and a generation of mining professionals that are unfamiliar with the management of finance deliverables for which they are responsible. Basic economics teaches us that for every dollar spent in business, a return of more than one dollar must be realised to substantiate the expenditure as a rational decision. This begs the question of whether or not operational professionals have the knowledge to consider such a value proposition when approving expenditure in their area of responsibility.

In the present climate, are those tasked with realising cost savings locking in value or merely cost cutting without considering the larger value proposition?

Read more in Downer empoyee Sara Prendergast’s thought leadership article recently published in The Australasian Institute of Mining and Metallurgy (The AusIMM) Bulletin: 
https://www.ausimmbulletin.com/feature/the-future-of-finance-in-mining/