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Has global mining productivity reversed course?

New analysis of the Mining Productivity Index shows a gradual increase in mining productivity since 2013.

After a significant decline in mining productivity between 2004 and 2009, the trend was relatively flat for about four years. In recent years, however, several indicators of global mining-sector performance have shown an upward trend.

Yet, despite recent improvements, productivity is still some 25 percent lower than the starting point in the mid-2000s. Hence it is crucial for mining companies to track the main drivers of the productivity of their assets and focus on initiatives that will guarantee a sustainable productivity increase over the long term.

The Mining Productivity Index (MPI) is a cross-commodity index designed to give insights into the industry’s main productivity drivers: how much total material (ore and waste) is being moved by using what level of resources. It thus not only minimizes the influence of grades, strip ratio, and mining-commodity prices but also takes into account the rising cost of mine supplies, such as fuel.

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The decline in productivity between 2004 and 2009 was a result of significant increases in capital expenditures (capex) and operational expenditures (opex) that were not reflected in production growth. Between 2009 and 2013, productivity flattened, with cost increases mirrored in production growth. Since 2013, mines have steadily increased productivity by keeping spending (capex and opex) under control.

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Across major geographies, Oceania (which includes Australia) stands out for significant improvements in mining productivity between 2013 and 2018. This trend is mainly driven by a significant decrease in capex and opex with increased production. We expect this region to continue to be at the forefront of adopting new technologies and autonomous solutions.

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