JUL-AUG 2017

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By Bas Mutsaers 10 INTECH JULY/AUGUST 2017 WWW.ISA.ORG long-term trend because larger companies have focused on increasing the volume of their cur- rent assets. This is depicted by the yellow areas in figure 1. This comes at the cost of the smaller, less profitable assets that are naturally pushed to the right. As a result, given their position on the curve, these assets are not attractive in a satu- rated market, even at the right cost point. The companies in the upper side of the cost curve (in red) typically do not have the same leverage to adopt a productivity agenda. They are typically smaller (or older) assets that are not as flexible or as efficient as large tier 1 ore bodies. These com- panies often have less access to power, water, or transport, or are of a higher complexity (ore body or processing needs). Several of these assets may also be nearing the end of their life, and it sim- ply does not make sense to sink any more money into them without an increased market demand or a lower cost base. Capital reduction We have seen plenty of examples of entities that are now priced out of the market and in tem - porary "care and maintenance" or up for sale. Equipment inventories are extremely low be - cause of significant capital reduction programs forced by the recent commodity prices. Many sites are operating both their mobile fleet and I t seems like a long time ago that we started talking about information technology (IT) – operational technology (OT) convergence, wireless technologies, and a mature approach to industrial safety. For those in the mining indus - try, however, we could still benefit from a stron- ger adoption of ISA standards to help accelerate the productivity journey. Is it the right time to adopt new ways? ISA has recently formed a Mining and Metals Divi- sion. It will be interesting to see what this will mean for the communication, standards, and view- points that are generated around mining. In recent months, some parts of the industry have started to turn the corner. Many resource shares are up, and most commodity prices are up strongly due to con- tinued demand. This is evidenced in metallurgical coal share prices. It is also significant that iron ore and precious metals prices have recovered from their recent lows. Through the downturn, capital reduction and the low availability of excess cash has forced the productivity agenda at a level not seen before in mining. There has been a tremendous focus on the productivity of current assets. As a result, the cost per ton for most of the volume in the market has been strongly reduced. Commodity prices have now returned to their Mining and IT-OT convergence Relevance of the various ISA standards to productivity, analytics, security, and digital technology adoption in mining

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