Anglo expects to repeat gain in productivity in years ahead

Technological improvements had boosted productivity 40% over the past three years and a further 40% could be delivered by 2020, Anglo American CEO Mark Cutifani said on Monday.

“Since we started thinking about our business in a very different way, our productivity is up by around 40% since 2013,” Cutifani told the Mining Indaba.

“I would expect to see the same level of improvement from where we are today to be delivered through our current programmes by 2020.”

Anglo was focused on the smart use of data and “integrated systems thinking” to cut maintenance spending and to reduce safety risks. “We are using advanced analytics to interrogate existing data and to estimate the probability of component failure in some of our most important mining equipment,” he said.

Miners have been focused on cutting costs and boosting productivity in recent years as metal prices slumped, hitting multiyear lows early in 2016 and squeezing profits.

Anglo reported a sharp production fall at its Los Bronces copper mine in Chile at the end of the year, offsetting an overall increase in mineral output across its mines.

The global mining sector has recovered strongly as metal prices have rebounded. Anglo American was the top performer in the FTSE 100 index in 2016 as its shares recovered from a big sell-off in 2015.

Although the worst period for the mining sector might have passed, tough and uncertain times continued to lie ahead, Cutifani said. “That is why resilience is so important,” he said. “We have to be leaner, we have to be hungry and we have to keep evolving quicker than our competitors.”