Optimisaiton in the Resources Industry : A Financial Perpective

Management at all levels continually strive to optimise, or make the most of resources available to them. Daily, decisions are being made on how to most efficiently locate and exploit an ore body, then process and market the recovered metal. At one level this optimisation process in the Australian mining industry appears to be successful, for example, witness the improvement in productivity and reduction in operating costs through the 1980s. Yet, at another level the industry's performance has been appreciably below expectations as measured by rate of return criteria. Companies likely to exhibit superior performance are those that are able to co-ordinate, through good planning, the optimisation process at all levels of the organisation. An important role for general management is therefore to provide the context or boundary conditions in which optimisation can Proceed.