Productivity, An Ever More Critical Factor in the Mining Industry

The US Bureau of Mines' dictionary of mining terms defines productivity as "the efficiency with which economic resources (men, material, and machines) are employed to produce goods and services." Or, the relationship between the physical outputs and the physical inputs used to produce those outputs. As demand for mine materials dropped, mining companies and equipment manufacturers discovered that ratios between the inputs and the final products were disproportionate to the profits realized. Some companies are fighting for survival. The US, while still the most productive country in the world in absolute terms, is looking over its shoulder as other industrialized nations continue to exceed its yearly productive growth rate. According to John Belcher, Jr., of the American Productivity Center in Houston, TX, the US has seen a steady decrease in productivity growth since the mid-1960s. During the post World War II period, the US labor productivity growth rate was 3.2% annually. The slowdown began in 1965 and by the mid-1970s, the country's annual growth rate was 1%. By 1978, labor productivity growth ceased to gain at all and from 1978 to 1980 a 2% decline occurred. Solutions to the productivity decrease are increasing product prices or improving productivity. By increasing prices, though, the producer runs the risk of pricing himself out of the competitive market. To maintain an acceptable profit level, prices must increase proportionately higher than required to offset production cost increases, Belcher says. Many companies are turning to in-house productivity improvement programs as an answer to increased costs and declining profits. These programs are geared toward management commitment and employee awareness of what productivity means. Companies are finding ways of measuring productivity levels in financial reporting, budgeting, and planning. Organizational teams have been formed to coordinate activities and oversee product management, and improve productivity of materials and capital investments. This special issue of Mining Engineering examines productivity in the mining industry. First, there are articles about various, and different, factors that affect productivity in each of ME's five main readership areas - exploration, mining, processing, coal, and industrial minerals. There is also a look at mining industry productivity from the manufacturer's view. The next section of this special issue is devoted to some topics that affect all areas and sectors of mining: research, management practices, computers, maintenance, and energy management. Then follows case studies in exploration, coal, and iron and steel. These studies provide examples of practices and strategies used by companies and operations to boost productivity.