Metals & Mining

Overview

With the slowing of China’s mineral commodity demand growth comes a refocus on operational excellence, and of capitalizing on the age of automation and digitization to drive productivity. But even though a relentless focus on cost-efficiency is critical to maintain profitability while the race down the cost curve continues, an eye on shifting industry supply, demand and technology dynamics is critical to ensure commodity portfolios remain relevant to tomorrow’s consumers.

For mining service suppliers, principal challenges revolve around the impact of disruptive technologies on their service and product offerings enabled by automation and digitization, and being first to target growth adjacencies in a market where customers are more discerning and price conscious than they were a decade ago. L.E.K. Consulting has helped many clients successfully navigate these complex challenges.


Key Questions and Challenges

Having delivered hundreds of successful engagements in the mining arena across the Americas, EMEA and Asia, L.E.K.’s natural resources team has deep expertise in helping clients solve their most difficult challenges, providing clients with end-to-end support to help answer key strategic questions.

Resource company clients ask us to help them solve key issues including:

  • How do we deliver sustainable productivity improvement at the coal face?
  • How do we capitalize on the IoT revolution to lower our costs and improve our product quality?
  • How should we structure our mine portfolio to maximize value creation?
  • Are the fundamentals for commodity X attractive, and how should we enter that market?
  • How do we position for and participate in the shifting commodity trading dynamic?

We challenge our mining and mining equipment, technology and services (METs) clients to answer important questions such as:

  • Where are the growth opportunities, and how can we refine our value proposition to win them?
  • Which commodities/regions/customers are most attractive to serve, and how do we enter those segments?
  • What adjacencies are appropriate to pursue for sustainable growth?
  • Where and how can we gain greater cost-efficiency in our organization?
  • How do we activate change to deliver our strategy or reduce our cost base?


Examples of Our Work

L.E.K.’s work has had a meaningful impact in driving financial outperformance for our clients, including how we:

  • Restructured and drove productivity improvements at a large integrated coal mine and power station, delivering more than $110 million of cash benefit inside a two-year time frame
  • Created a survival plan for a major coal producer facing significant financial losses and the threat of industrial action, which enabled the producer to return to profitability and sustain operations
  • Devised a gold resource replacement strategy for a global mining major to underpin a decadelong run of total shareholder return outperformance
  • Developed a growth strategy to double the value of newly acquired Australian mining assets, which facilitated outperformance of the original acquisition investment thesis
  • Provided commercial support to an African nation renegotiating long-term marketing and sales agreements for mineral output, which assisted a major global producer and user of explosives to identify and deliver $100 million in cost reductions across the organization
  • Assessed the attractiveness and potential entry strategies into adjacent mining services segments for a mining equipment rentals firm, which informed the business’s growth strategy for the following five years
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