The four productivity taxes costing mines millions every year

Arjen de Bruin, Group CEO at OIM Consulting

Most mining losses don’t come from commodity prices; they come from operational friction that compounds across every shift, says Arjen de Bruin, Group CEO at OIM Consulting

Mining companies can tell you exactly what they spend on diesel, explosives or labour. They can quantify the cost of downtime, track commodity price fluctuations by the hour and model production scenarios years into the future. Yet across many mines, some of the industry’s biggest losses still go largely unmeasured, because they are embedded in the way shifts roll out, day after day.

At OIM Consulting, our research across mining operations in sub-Saharan Africa suggests that as much as 10% to 20% of operational output can disappear between plan and execution. In some cases, mines are operating at just 42% role execution effectiveness at supervisory level, while a typical 12-hour shift delivers only 5.5 hours of effective production time.

The terrifying reality is that – when taken at current commodity prices – this translates into tens and sometimes hundreds of millions of rands lost annually at a single operation. These are operational productivity taxes: recurring losses created by slow decisions, disconnected teams, reactive leadership and frontline capability gaps. But – unlike commodity cycles – these issues are largely controllable and resolvable with the right interventions.

Over time, we’ve come to see four distinct “productivity taxes” repeatedly emerge across mining operations:

Connectivity Tax
This refers to the cost of broken information flow between the plan and the face. Most mines today are not short on data – dispatch systems track fleet movement in real time, maintenance systems monitor equipment status continuously and production targets are documented in detail. Yet many operations remain what we would describe as “data rich but decision poor”. In order to be effective, the right information needs to reach the right person at the right moment, in a form they can act on during the shift itself.

In many operations, supervisors spend between 24% and 29% of their shift in meetings and administration instead of on the floor. That creates long windows where no structured observation is taking place, no deviation is being corrected and no real-time coaching is happening, and the operational effect compounds quickly.

What often looks like a production problem is, in reality, a communication and leadership problem.

Velocity Tax
“Velocity Tax” encompasses the cost of slow decisions and reactive execution, and is arguably the most expensive tax of all because it multiplies across the entire mining cycle.

Across many sites, OIM’s assessments show that 91% of supervisors operate reactively rather than proactively. Problems are addressed only after they have already disrupted the plan, and by the time decisions are escalated and discussed, the production window has already narrowed or disappeared entirely.

One of the most obvious examples is blasting performance underground. At several operations, crews average 1.2 blasts per shift against a planned target of 1.5. On paper, a 0.3 shortfall may seem marginal, but across six crews, this translates into a 20% reduction in face advance every shift. Over a month, the financial impact becomes enormous.

The same pattern appears in maintenance: Mean Time To Repair (MTTR) often stretches to 6-10 hours against a world-class benchmark of 4-6 hours, with each minute that intervention is delayed removing productive hours from the system permanently.

Resilience Tax
Mining is inherently one of the most volatile industries that exists. Equipment breaks – regularly. Conditions change. Targets move. The operations that are healthy and resilient recover within the shift, while fragile or unstable operations allow disruption to collapse the plan entirely. Thus, “Resilience Tax” refers to the cost of a workforce and culture unable to absorb disruption effectively.

Our behavioural and safety data shows that many operations are carrying significant fragility within the system – on average, emotional control scores 53%, while resilience sits at 61%. Under pressure, we’ve seen unsafe behaviours spike significantly and teams become reactive rather than disciplined. The Total Recordable Injury Frequency Rate (TRIFR) across some SSA operations remain between 2.5 and 4.5 times above global benchmarks, and every serious incident brings not only human cost, but lost production days and operational instability.

It is important to bear in mind that resilience is not about “warm and fuzzy” culture programmes but operational capability under pressure, and the ability of supervisors and crews to stabilise performance when things deviate from the plan.

Capacity Tax
The fourth and perhaps most foundational productivity tax is the “Capacity Tax”; the systemic cost of placing people into roles without equipping them with the capability required to lead effectively.

Across OIM’s supervisory assessments, only 17% of supervisors met the minimum competency threshold required for the role, with “planning and organising” emerging as the single largest gap area while “leading and developing others” ranked as the second lowest competency. This matters because the supervisor is the operational multiplier inside a mine, with every process, target and safety protocol ultimately in their hands. All-too-often, we see technically strong individuals promoted into supervisory roles without first being developed as leaders. The result is that many operations are effectively running their most important operational layer below capability threshold every single shift.

The good news? This is also where the opportunity lies.

We’ve seen operations improve supervisory competency from 17% to 53% within 16 weeks through OIM’s structured on-the-floor coaching and supervisory development programme (SDP). We’ve seen mines recover double-digit productivity gains through better planning routines, stronger shift management and supervisors spending more time leading where it matters most.

I believe that mining’s next productivity breakthrough will come from fixing the operational leadership that ultimately determines whether plans are actually executed in real time, every single shift. Because in the end, the biggest productivity losses in mining are rarely hidden in the mine shaft.

They are hidden in the shift.