Using a forecasting toolset can help improve mining companies’ budget planning, enabling them to streamline and create efficient processes, says performance management specialist company Cortell director Greg Bogiages.
He adds, however, that a budgeting and forecasting toolset requires standardised reports to ensure high-accuracy forecasting.
Accurate forecasting enables mines to predict the impact of operational variations on financial resources and profitability more accurately and to receive advanced warnings of the impact that maintenance or expansion projects will have on future budgets. This will enable the companies to avoid cash crunches, wherein budgets are overallocated, and delays to projects owing to a lack of funds.
“In any mining organisation, budgeting and forecasting processes are complex and subject to several obstacles, including volatility regarding commodity prices, currency fluctuations and cost pressures with regard to labour and electricity, as well as long planning cycles.