Global

Mining risk and assurance: A survival strategy 

Faced with falling commodity demand and prices and rising input costs, mining companies are experiencing declining margins. A series of major project failures has also put risk management under the microscope, with the further threat of labor unrest, political uncertainty and changing regulations.

 

This paper identifies eight key drivers of value and the associated risks. To safeguard this value, organizations need an integrated risk and assurance strategy that gives comfort to shareholders and other stakeholders.

 

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Mining risk and assurance

 

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Contact us: 

 

Dane Ashe

Global Mining Lead — Internal Assurance

 

+27 82 828 4812

mining@kpmg.com

Eight key drivers of value: Becoming masters of risk – rather than victims

Strategy

Strategy
  • Value should take priority over volume, with management more accountable to Boards for quality, risk and assurance disclosures.

Regulatory compliance

Regulatory compliance
  • Compliance is an essential part of good governance and risk management, with the Board holding ultimate responsibility.

Sustainability

Sustainability
  • There is a strong commercial rationale behind investment in the workforce, the community and the wider environment.

IT Strategy

IT Strategy
  • IT is integral to strategic decision-making, enabling management to access a rich seam of data to raise operating efficiency.

Major projects

Major projects
  • Formal, tightly monitored project approval and budgeting processes reduce the risk of poor performance or overspend.

Reputation & ethics

Reputation & ethics
  • Three levels of defense against criminal activity include: prevention, detection and response.

Operational excellence

Operational excellence
  • To maintain high productivity in difficult and dangerous environments, capital equipment and geological assets should be carefully managed.

Taxation

Taxation
  • An effective tax compliance strategy strengthens relationships with revenue authorities and gives greater certainty over tax obligations.