A large U.S. insurance company closes its current TV commercials with the slogan, “We know a thing or two, because we’ve seen a thing or two.” As a catchphrase, it could just as easily be applied to ongoing efforts among the world’s largest miners to increase productivity. These companies have seen a few things, and they know what needs to change in order to meet their goals. High on the list are improvements in loading, haulage, and equipment maintenance and replacement practices that offer the prospect of boosting productivity with little or no investment in additional primary production equipment.
At Rio Tinto, the driving force behind these improvements is a desire to generate higher free cash flow to maintain and improve shareholder returns. This was made clear by Jean-Sébastien Jacques, Rio Tinto’s CEO, at the company’s 2017 Investor Seminar held in early December in Sydney, Australia, who opened the event by stating, “Looking ahead, [our] $5 billion productivity program will help drive value over the next five years. Our group target of $1.5 billion of annual additional free cash flow from 2021 will ensure we can continue to lead the pack in delivering superior cash returns to our shareholders.”
