Mining 20 years behind manufacturing: Cutifani

THE mining industry is at least 20 years behind the manufacturing industry in developing advanced process and engineering systems that can enhance productivity, says Anglogold Ashanti chief executive Mark Cutifani.
Mining 20 years behind manufacturing: Cutifani Mining 20 years behind manufacturing: Cutifani Mining 20 years behind manufacturing: Cutifani Mining 20 years behind manufacturing: Cutifani Mining 20 years behind manufacturing: Cutifani

Mark Cutifani

Lou Caruana

The mining industry should spend more on research and development and should look at the new operating model being implemented at Anglogold Ashanti as an example of productivity improvements that could be made with minimal capital outlay, he told the Sydney Mining Club.

“We’ve actually implemented a model that looks like the Toyota management model but it goes far beyond that because it took Toyota 50 years to implement theirs,” he said.

“We’re trying to implement the same sort of approach in less than five years.

“We literally got performance improvements of our production in our mines … without any new capital and with 97 per cent of the workforce having never seen a production process … coming direct from farms and a number of different languages that we’ve had to train from the ground floor up in terms of basic education.”

Cutifani said throughput at its Suigiri mine in the African nation of Guinea was up 18% without significant capital investment.

Broadly across the company’s 16 operating centres around the globe, its 65,000 employees are going through a change program as part of the five-year operating model being rolled out.

“Progress is only measured if it is sustainable,” Cutifani said.

The company has increased earnings by 38% while the gold price has increased by 22% over the last two years.

“Our grades have declined by more than 20 per cent but through the operations improvement and the manufacturing type of approach, we’ve held our production levels constant,” he said.

“Instead of seeing our operational costs improving … we’re seeing a 20% reduction across the portfolio.”

Mining’s R&D spend was only 0.2% of annual revenues compared to petroleum’s 3.5%, he said.

New technology would need to be developed as extraction of resources became more expensive as deeper and more inaccessible ore bodies were mined, Cutifani said.

Anglogold Ashanti is trialling horizontal raise drilling technology which Cutifani believes will lead to 30% reduction in its cost base if it is successful and will significantly improve narrow vein mining.

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