With limited upside for precious metal prices, miners are refocusing on productivity, says Nathan Flesher, who works for McKinsey's mining arm.
Gold miners are looking at a rangebound price for bullion at the $1,300/oz level. But with a limited outlook for any significant moves for gold upwards, miners must generate more output from capital spent to attract investor interest. Flesher says measuring mine productivity can be difficult given how unique each operation is.
"Many mines are making their production goals but don't have the freedom to produce more," says Flesher noting that productivity at some mines is restricted by location.
Flesher says those mines are asking how can they minimize operating expenditure while continuing to increase productivity.