MINING
Mining profitability through optimisation
For mining companies, cost optimisation is now a strategic priority that drives both short-term savings and long-term growth.
By Louis Kruger, Deloitte Africa Energy Resources & Industrials Industry Leader
In the mining industry, cost is more than just an operational metric – it’ s a matter of survival. As commodity cycles fluctuate and market uncertainties grow, mining companies must be increasingly vigilant about cost efficiency to remain competitive. Traditional cost-cutting methods are no longer enough. Navigating the evolving landscape demands smarter, more integrated cost optimisation strategies.
To improve profitability and ensure sustainable business operations, the mining sector must embed smarter cost management into the core of its processes and systems. Deloitte’ s research shows that forward-thinking mining leaders are transitioning from episodic costcutting exercises to a more sustainable, enterprise-wide cost transformation. This shift involves aligning cost optimisation with long-term business strategies and improving operational performance.
Operational efficiency and productivity Mining is inherently unpredictable. Plans made at the start of the year often unravel due to geological surprises, equipment failures, or changes in environmental factors. The ability to close the gap between planned targets and actual delivery is critical. The real cost, however, comes when things don’ t go according to plan – costs spiral as operations fall into a never-ending cycle of playing catch-up.
For example, Deloitte worked with a diversified mining operation in Africa to resolve persistent cost inefficiencies. A diagnostic review revealed that nearly half of procurement spend had not been addressed by any formal cost optimisation programme. Furthermore, more than a third of existing initiatives were failing to deliver improvements. Deloitte helped the client establish focused task teams and prioritise the implementation of cost-saving interventions. The result was annual cost savings of more than $ 10 million and a reduction in the operation’ s all-in sustaining costs( AISC) by more than 10 %. This case demonstrates the power of data-driven diagnostics and focused execution in unlocking significant operational gains at scale.
Smart operations such as leveraging data analytics, digital twins, and AI can help miners monitor performance in real time, optimise inputs, and predict failures before they happen. According to Deloitte’ s Tracking the Trends 2025, these technologies offer a competitive advantage by enabling more agile responses to complex challenges, reducing downtime, and enhancing decision-making.
36 sabusinessintegrator. co. za