01/11/2026
TWO FINANCIAL PRESSURES CAN DESTROY A MINE WHILE MANAGEMENT IS STILL REPORTING PRODUCTION.
Mining CEOs, CFOs, Mine Owners and Financial Directors: I have two questions for you.
Mining profitability is not determined by how many tonnes leave your operation. It is determined by how much financial value remains after the cost of extracting, processing and delivering those tonnes.
Two major pressures deserve serious attention:
1. COMMODITY PRICE VOLATILITY — REVENUE PRESSURE
A mine can maintain production while the market price of its commodity declines.
The result?
Lower revenue per saleable tonne.
Reduced operating margins.
Greater pressure on cash flow.
Increased difficulty servicing debt and funding operations.
My question to mine owners:
If your commodity selling price declined by 10%, would your current cost structure allow your operation to remain profitable?
2. RISING OPERATING COSTS — PROFITABILITY PRESSURE
Electricity, maintenance, labour, equipment utilisation, logistics and procurement all influence the cost of producing a saleable tonne.
Consider this illustrative example:
Previous operating cost: R80 million
Production: 100,000 saleable tonnes
Cost per tonne = R80 million ÷ 100,000
= R800 per tonne
Current operating cost: R75 million
Production: 80,000 saleable tonnes
Cost per tonne = R75 million ÷ 80,000
= R937.50 per tonne
Total expenditure decreased by 6.25%.
However, cost per tonne increased by 17.19%.
The mine is spending less overall but producing each saleable tonne at a substantially higher cost.
My second question to CFOs and Operations Directors:
Can you identify exactly which operational inefficiencies, maintenance patterns, energy consumption levels and production bottlenecks are driving your cost per saleable tonne upwards?
Or are you relying on monthly expenditure reports that show what was spent without explaining what value was lost?
WHERE UGS COMES IN
Ubuntu Growth Solutions (UGS) focuses on identifying, measuring and addressing controllable operational and facilities-related cost pressures.
Our approach includes:
Advanced cost-driver analysis.
Cost per saleable tonne assessment.
Energy intensity and power-cost analysis.
Maintenance expenditure and asset-performance analysis.
Downtime and productivity-loss costing.
Procurement and contractor expenditure reviews.
Operational efficiency improvement frameworks.
Continuous performance monitoring and financial verification.
We cannot control international commodity prices. We can, however, help management investigate the costs and operational inefficiencies within its control.
The question is not simply whether your mine is producing. The question is whether your operation is producing profitably, efficiently and sustainably.
If your operation generates millions in annual revenue, let's have a serious conversation.
Ubuntu Growth Solutions (UGS)
Advanced Cost Control | Process Optimisation | Profit Recovery
📞 +27 83 416 3251
📧 [email protected]
📍 South Africa