Juggling profitability and shareholder expectations
The mining industry is grappling with challenges not seen for
over a decade.
Lower grade gold miners in particular are finding it hard to
maintain economies of scale as they struggle to keep costs in
check. Much of the pressure stems from the combination of global
inflation, higher foreign exchange costs and labour rate increases.
These key factors are creating a strategic quandary for companies
juggling profitability with shareholder expectations, with one
miner, for example, recently pausing operations entirely in the
face of a projected 85% increase in mining costs for
FY23.1
The situation is widespread and mining companies nationally are
being forced to consider various solutions and courses of action.
Questions being asked centre around whether costs can be cut to
maintain the status quo and have operations continue, or whether it
makes more economic sense to down tools and leave resources in
