Modern Mining January 2024

MINING SERVICES

Mind The Gap By Jaco Lotheringen MD of Ukwazi

A well-known fact about mining businesses is that they are highly susceptible to the cyclical environment of the supply of, and de mand for, commodities – something that is unlikely to change. When examining decreasing commodity prices over the last three years, uranium yellowcake has been the exception, with a recent upward trend. Gold has remained relatively stable, but platinum group metals (PGMs) and copper have seen a substantial decline from the highs achieved in early 2021. Bulk commodities such as manganese ore, iron ore, bauxite and specifically coal, are materially down from the peaks reached late in the Covid-19 pandemic, while chrome has not regained its pre-2017 commodity crisis levels.

The gold price has remained relatively stable over the past two years.

responsibility for consistently meeting the strategic plans communicated to the market, investors, and stakeholders, therefore, rests squarely on the shoul ders of the mine’s production team. Bridging the gap Whenever you travel on the London subway there are signs that warn you, “Mind the Gap”. In recent years, the disparity between strategic mining plans and the practical, implementable mining plans accessible to mining operational teams, has grown considerably. This gap subsequently fosters wide spread uncertainty within the execution environment i.e., what must be done and the how of what can be done practically. In the same vein, while most mining organisations do adhere to well-defined planning horizons and put notable effort into producing these plans – in a sequential manner and at specific intervals – they often lack practical guidance. The plans formulated as the foundation for the mine budget should pro vide comprehensive and practical direction to mine management, aiding the implementation plans and serving as a benchmark for evaluating the mine’s performance and the efficiency of its operational teams. At Ukwazi, we strongly believe that when a plan serves as a benchmark for evaluating a mine’s performance or its operational team, it should be tailored for those specific purposes; aligning with the business’ strategic objectives while also pro viding clear, instructional guidance. Simply put, it must extend beyond providing spatial guidance alone. Attempting to mitigate the resulting execu tion risk within the short-term operational planning horizon through rolling monthly and weekly plans is insufficient for most complex mining operations. This approach simply does not guarantee the sus tainability of safe and high-quality production, as mines operate in a highly sequential and spatially controlled manner. Closing the gap As you increase uncertainty by imposing top-down strategic models for operational control, frustra tions will mount, and needless stress will burden an already demanding production environment; making

M any operations, particularly across Southern Africa, are currently facing significant chal lenges. These difficulties can be attributed to logistical hurdles associated with Transnet, alongside considerable post-Covid-19 production cost escalations and the added pressure of lower commodity prices. As a result, most mines are facing inward, prioritising cost control and aligning produc tion with forecasted rates for saleable products. The

Mind the gap infographic.

48  MODERN MINING  January 2024