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MMG’s Australian Operating Model – the Implementation, Successes and Learning

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Author R M S Watsford and M Davis

Description

In 2015, MMG Limited commenced further action to improve operating margins and establish a blueprint for future growth in the Australian environment. This action was taken in the context of weakening metal prices and high input costs that arose during the Australian minerals boom.

MMG was formed in June 2009 following the purchase of the majority of assets of OZ Minerals Limited by China Minmetals Corporation (CMC) through its subsidiary China Minmetals Non-ferrous Metals Co Ltd (CMN).

Since formation MMG has been implementing a business model to deliver a standard way of operating. The overarching purpose of the business model is to enable fast integration of acquired assets to realise improved productivity and performance. CMN established MMG as a vehicle to reach their growth targets through further development or acquisition of mineral assets in jurisdictions external to mainland China.

The business model is underpinned by the MMG operating model. The operating model defines how MMG is arranged to deliver the company strategy.

This paper describes the application of the operating model to the formation of the Australian operations into a single business unit from multiple stand-alone operating sites. The development and impact of the business model on MMG’s performance is also presented.

The extension of the operating model to the Australian operations has led to improvement in safety performance, direct costs and productivity. These improvements have been achieved through reducing duplication, simplification of systems and rapid deployment of improvement initiatives.

The successful implementation of the operating model to Australian operations strengthens the platform for further growth. Hence, delivering on the aim of the business model.

CITATION:

Watsford, R M S and Davis, M, 2016. MMG’s Australian operating model – the implementation, successes and learning, in Proceedings International Mine Management Conference, pp 291-302 (The Australasian Institute of Mining and Metallurgy: Melbourne).