Company NewsApril 4, 2018

Managing By Metrics In Mining

Even the world’s most technologically sophisticated mining companies are coming to understand that people hold the keys to success.
Avatar Dan Headrick

Even the world’s most technologically sophisticated mining companies are coming to understand that people, equipped with the right information, hold the keys to success.

In Nunavut, Canada, about 2,600 kilometers (1,616 miles) northwest of Toronto, a massive hauling truck broke down recently at the Meadowbank gold mine, threatening to cut production by 5%, which could have cost the company millions of dollars.

But the mining company, Agnico Eagle, recently incorporated new mine planning and ore production software.

Instead of spending several weeks planning using old tools, the company simulated various life-of-mine plans, tested their impacts on production and shifted operations in just days.“Having tools like these provides a smooth workflow that allows you to look at various options and evaluate several differences in designs,” said Eric Ramsay, senior mine geologist with Agnico Eagle.

Growing Support For ‘Lean’ Mining

A growing chorus of industry leaders is calling for more mining companies to invest in lean business processes, as Agnico Eagle has. The industry’s future, these leaders say, depends on how well mining companies coordinate dynamic information across complex operations.

“Lean” refers to a manufacturing process Toyota refined in the 1970s and ’80s and that spread worldwide to transform modern manufacturing operations. Lean embraces simple concepts that never stop evolving, largely because they depend on every employee having just the right information at just the right time to function at peak efficiency.

“It is important for mining companies and practitioners of lean to make a clear distinction between lean thinking and automation,” said Paul Smith, director of Shinka Management, an Australian consulting firm that helps mining companies develop lean business practices. “Lean manufacturing has traditionally shunned expensive, high-tech solutions to process management, instead opting for low- or no-cost improvements wherever possible.”

Adopting New Business Models

Mining is a volatile business that traditionally operates on boom-or-bust cycles subject to the swings of nature, local politics and share prices. New technology improves production, but industry experts agree it’s not enough. Not just operational practices, but also business models, must be lean to eliminate waste, smooth out the peaks and valleys of production, avoid accidents and adjust to the always-present unforeseen.

“Open pit is easier to automate, but the underground mine is like a mini-city,” said Mike MacFarlane, a 35-year mining industry veteran who, as a consultant, urges companies to think differently. “Every day the road changes; all kinds of complex decisions have to be made along the way. The biggest lever point is engagement with employees.”

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