Risk management specialist from Business Enhancement Partners, Jaco van Wyk says that what is treasure today may become worthless tomorrow in a rapidly changing technological society.
Surface miners are being urged to adopt sound risk management practices in order to meet challenges that are inevitable in a changing society. Events like the Covid-19 pandemic are changing the world in more ways than many would like to imagine.
Van Wyk was speaking at a recent Risk Assessment Seminar hosted by surface mining industry association, ASPASA. For years the association has actively urged its members to compile comprehensive risk assessments on all areas of business to ensure sustainability.
Looming enforcement of legislation on the introduction of proximity detection systems (PDS), and the Covid-19 pandemic have recently thrust the focus on the importance of risk assessments in mining. Effective assessment of risk allows risks to be identified, managed and where possible mitigated.
“Risk is the effect of uncertainty on a company’s objectives. It exists in all areas of business and is key to meeting customers’ needs in terms of target markets, market size, customer needs and the supply of the right product at the right price,” explained Van Wyk.
He added that risk needed to be incorporated into companies’ strategies in order to ensure sustainability in the long term. It also needs to address things like changes in relevant legislation, managing environmental footprints and a wide range of other factors.
Assessments measure the possible impact of uncertainty events should they occur and looks at possible outcomes. The impact of identified risks materialising can affect a company’s ability to do business and it is therefore, best to plan for these risks in order to manage them.
“Obviously, you cannot eliminate all risks and decisions need to be made whether to face them head-on or to mitigate them, meaning it’s a balance of risk versus reward. It is also significant to note that employees at different levels within a company need to deal with risks differently,” Van Wyk said.
“For example, in most companies it is strategically significant that senior managers are usually seen to drive a company’s strategies and are therefore more accepting of risk.” Mid-management usually plays both ends with a balanced approach making decisions based upon key risk indicators. At operational level it needs to be risk averse.
Risk affects all decisions and risk management directs and controls uncertainties. Preparing for the future in conjunction with strategy and objectives is of the utmost importance, although it is important to note that risk management does not deal with future decisions, but rather, the future of current decisions.
Risk assessments therefore contribute value by identifying the actual risk to a company’s strategy and objectives. It allows a framework to oversee risk taking and gives access to information and shows the size and scope of risks being faced. Also shows how risks are managed and the effectiveness of interventions. Why is it important is that when you break it all down, the main reason to do risk assessments is to have happy customers and a safe workplace.”
ASPASA director, Nico Pienaar, concluded that correct assessment of risks on a mine is critical to the effective operation of every mine in South Africa. Allocation of resources to assess and manage risks will be key to the future of mines and the industry.