How to turn Unprofitable Mines into Profitable Mines
Editors note: The seminar was conducted to an audience consisting of students and branch members, by three invited speakers: Mr. David Van Homrigh of KPMG Management Consultants, Dr. Geoff Oldroyd of G.C. Oldroyd and Associates, and Dr. Ian Runge of Runge Ltd. One objective was to present students with a viewpoint distinctly different to the perspective in student coursework, and speakers were invited to frame their presentations accordingly. The following is a summary of the presentation by Dr. Runge, with some introductory remarks and responses to questions drawn from the presentations by Mr. Van Homrigh and Dr. Oldroyd.
If a mine is unprofitable, then diligent cost management and people management may assist in solving the problem. Yet many sectors of Australian mining have applied these management tools over the last decade and satisfactory returns to shareholders have still not been forthcoming. Figure 1 compares the returns to shareholders in the mining and resources sectors with returns in the industrial sector.