2011 – AusIMM Metplant Conference 2011, Perth, WA

Abstract:

As the resources sector becomes tougher with rising costs and cyclical metal prices, mining companies
need to continue to reduce their costs and do more with less. Many new resource projects fail to come in
under or on budget based on Feasibility Studies. Particularly, capital expenditure (CAPEX) proves
difficult to achieve for resource projects. A number of resource projects have failed because of
aggressive plant CAPEX cost cutting resulting in projects with no surge capacity and are unable to
achieve design throughput. In addition, the plants are not operable because of the omissions. In recent
times many businesses have also experienced the “costs” of simply implementing aggressive operating
“cost cutting” measures as a strategy for solving business performance problems. This paper looks at
technology driven, employment related, luxury cuts, department cuts and restructuring cuts. In the past
companies used an incremental approach based on the use of past budget information as an integral
part of the budget construction process going forward. The use of performance reports and Management
Information Systems (MIS) is examined along with the role of continuous improvement in achieving
sensible cost cutting.

Read the paper here