After years of voracious demand from China, the market for mined commodities has moderated somewhat in recent months as China turned its focus away from building infrastructure and moved toward becoming a more consumer focused economy. The result has been relentless downward pricing pressure. Oil, coal, copper, gold and silver have all felt the pinch. Many commodities are close to multi year lows.
That means turning your focus to controlling costs and increasing operational efficiency. Mining companies need to focus on ensuring that their entire supply chain is as efficient and lean as it can be, and keep transportation and logistics costs low. But the best way to keep costs low and margins high is be sure every aspect of your business is as effective and efficient as it can be.
One way to improve operational results is to increase the utilization of your equipment, but you
can only increase asset utilization so far before you hit a ceiling. The Federal Reserve reported that the mining industry was running at more than 88 percent of its capacity, an increase of nearly 10 percent in a year.
Starting with the right foundation in place, such as SAP Enterprise Asset Management (EAT) solution, you can take it to the next level with reliability-centered maintenance and predictive maintenance solutions.
Well-maintained equipment uses less energy because it operates more efficiently, so there may be an additional energy cost savings as well as a positive environmental impact from using EAM and predictive analytics to monitor equipment.
Mining companies that use innovative right technology to improve their competitive edge by reducing costs
and improving efficiency and utilization will have better luck weathering the
fall in prices.
Without shrinking margins, there would be less pressure to be innovative and use the latest technologies
to get a competitive edge.
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