There are several do's and don'ts to follow when it comes reducing costs, as cutting spending in the wrong area could prove disastrous for a mining organization.

In the current mining market environment, the majority of businesses are working to produce more with less. Many operators and supervisors are searching for previously undiscovered ways to lower operational costs to help alleviate the strains of budget cuts and other effects of the struggling market. However, there are several do's and don'ts to follow when it comes to these practices, as cutting spending in the wrong area could prove disastrous for a mining organization.

Reliable Plant contributor Howard Mavity noted that some groups have decided to shift all maintenance responsibilities onto individual employees as a way to reduce costs. This strategy potentially eliminates any maintenance plan in place, and it can bring considerable adverse effects to the business when continued on the long term.

Importance of equipment monitoring 
Regular maintenance is vital for equipment reliability, and when costs are cut in this sector, repairs and housekeeping are not performed properly. For this reason, Mavity argued that it is very risky for a mining organization to improve their budgets by foregoing proper maintenance practices.

On the other hand, mining groups can effectively reduce spending by investing in equipment monitoring technology. Such systems oversee the health of vital machines and can provide the information necessary for workers to schedule preventive maintenance. This strategy prevents unplanned downtime and excessive repair costs as small issues can become large-scale problems when not address appropriately.

Alexander Proudfoot noted that one Brazilian iron ore company was able to boost equipment availability by 10 percent through an effective maintenance plan. Additionally, the practice helped the group boost mine port capacity by more than 100 percent.

Tips to cut costs effectively
According to Alexander Proudfoot, mining organizations can also lessen expenditures by keeping a close eye on their energy consumption. Utility spending can sometimes be a blind spot for supervisors, and many don't consider this an area to leverage for reduced costs. The firm recommended a target energy utilization zone between 2 and 10 percent, which can provide significant savings.

Equipment monitoring technologies can assist in this area as well. As the system provides data on the functionality of large machinery, operators can utilize this information to improve the equipment and reduce energy consumption.

Alexander Proudfoot also noted that one Australian mining organization saw considerable cost reduction by taking another look at their transport strategies. By streamlining the mine-to-port routes being used, the company was able to lower contractor and management costs. Using this as an example, it can be beneficial for an organization to revisit some of the practices they are using and consider making improvements.

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