Transcription of Mining company strategy evolution: an overview …
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Mining company strategy EVOLUTION169 IntroductionBetween 2000 and 2012, the platinum group metal basketprice per platinum ounce sold increased at a cumulativeaverage growth rate (CAGR) of 8% in SA rand , during the same period, industry cash operatingcosts per platinum ounce increased at a compound annualgrowth rate of 15 18%. This increase in operating cost waslargely driven by increases in input costs such as wages,electrical components, electricity, explosives, supportmaterial, reagents, and diesel that were well above was exacerbated by a reduction in average feed headgrade by per annum between 2005 and 2012 and a22% increase in UG2 ore as a fraction of total ore minedover the same period. Together with anticipated uncertaintyof the operating and market environments over a longertime period, these changes have necessitated that platinummining companies fundamentally re-assess their operatingstrategies in an oversupplied market. Within this shifting context it is necessary to reformulateasset portfolios and operating strategies in the context of in-depth analyses of: Trends that inform the industry structure Markets that inform demand trends Opportunities and threats in the operating environment Competitor performance Internal organizational performance, weaknesses, this process a series of choices and trade-offsmust be made in moving the organization to a differentoperating trajectory that provides stability and an elementof competitiv
MINING COMPANY STRATEGY EVOLUTION 171 Strategic analysis tools Framework for strategic analysis and management The field of strategy and …
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