Budgets are always tight on mining projects, with the need to demonstrate return on investment over the lifecycle of the mine. This calls for a best-of-breed Financial Management and Reporting System that can be tailored to address the unique requirements of the Mining industry.
Key criteria to consider when choosing a Financial Solution
- Accounting Across Each Phase
Being able to account for costs and returns across each phase of the mining process is crucial. Though not all mining companies will be responsible for the whole end-to-end mining process, where appropriate, the accounts will need to reflect each phase from exploration evaluation, development and production through to closure/rehabilitation.
- Financial Regulations
Mining companies often operate mines across a number of different countries or jurisdictions. This may require adherence to a range of financial regulations and multi-GAPP reporting including IFRS, Syscohada and UK GAAP. Sometimes the extraction can take place in one country and the processing in another resulting in different financial reporting requirements for each legal entity. For this and other reasons, you may need to implement multiple financial rule sets at the same time.
- Multiple Languages
Managing financial reporting across numerous countries can also bring complexities with the language capability of financial systems. For example, certain African areas will have a high density of speakers that have English as a second language, preferring instead to speak French, Arabic or Portuguese. You’ll need to make sure that your systems support frequently spoken languages to keep things running smoothly across all sites.
- Multiple Currencies
Mining companies will need to undertake transactions across a number of currencies – often commodity prices will be in a different currency to the local currency where the mine is located. They may also deal in different local currencies like the South African Rand but report at a group level in Dollars or Euros, for example. You will need a system that offers the flexibility to report in multiple currencies and consolidate in multiple currencies.
- Manage Taxes Across Countries
As with financial regulations, currencies and languages, mines may operate over a range of tax jurisdictions, each with its own tax incentives, models and payment rules. You must ensure that your own business regulations match with these for each country/locality in which you plan to do business for this, you require a system that can support varied country-specific tax rules and regulations.
- Tailored Financial Reports and Statistics
The Mining industry has a vast range and volume of specific statistics and KPIs that need capturing, analysing and reporting, including operating data (e.g. tonnage of ore mined), financial data (e.g. AISC – All–In Sustaining Costs), HSE data (e.g. near misses and lost time injury) and commercial reports on total minerals sold. Careful consideration needs to be made as to which data needs tracking and reporting on and to what level of granularity.
- Depreciation Models
The Mobile and Fixed Assets need to be depreciated correctly across their useful life, taking into account factors such as the expected usage of the asset, the expected physical wear and tear, technical or commercial obsolescence and mining lease expiry dates. The system will need to be flexible, applying the appropriate model, e.g. distance travelled (for your mobile fleet) or production quantities (for your mobile and fixed plants). This would ideally take a feed from your Enterprise Asset Management System, e.g. Infor EAM or IBM Maximo.
- Full Transparency Across the Organisation
In order to gain a good handle on your costs and spending, it’s essential to have the capability of drilling down into financial reports to the right level of granularity, e.g. site, region and corporation. You may also need to generate reports to cover each phase of the mining. This enables you to compare operations across your organisation for informed decision-making and financial reporting.
Infor SunSystems and EAM
Progressive TSL has proven that Infor’s SunSystems with Infor Q&A is the perfect solution to meet the financial challenges of the industry. All the criteria described above are available within the SunSystems software solution.
Once the mine reaches operation, we would recommend implementing an Enterprise Asset Management System, e.g. Infor EAM or IBM Maximo, alongside your accounting system to enable full end-to-end management of your financial and operational processes including purchasing, inventory, fleet management and workforce management. For an overview of our solutions for mining, read our recent blog: Progressive TSL’s Focus on Mining
About Progressive TSL
We provide Financial Systems and Reporting solutions to over 50 asset-intensive companies worldwide, including businesses in Energy, Engineering and Mining understand the specific nuances of the mining industry and have had successful implementations across several West African Goldmines.
Using our best practice implementation frameworks, we will tailor best-of-breed solutions such as Infor SunSystems and Q&A, HxGN EAM and IBM Maximo to meet the needs of your industry and individual business processes. Our solutions underpin our client’s roadmap to growth. Contact us to learn more about our innovative approach to the mining sector.