Why Mining Services Sector Tends To Stay Out Of The Limelight?

The mining services sector seems to be out of the limelight because of the exception of the larger

players. Having more than 90 SMEs in the mining services sector, the competition becomes high,

thereby targeting on the standard of service and price, allowing SMEs to compete for blue chip projects.

There are chances that the mining services sector may face continued volatility in the short term, with

GFC affecting resultant scale-back and withdrawals still being felt on some projects despite of the much

more advanced resurgence of the mining industry.

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STRATEGIC PLANNING FOR MINING SERVICES INDUSTRY:-

The success depends on the business ability to react quickly to market changes which can be achieved

by focusing on the following factors:-

(a) A strong balance sheet – As the operational shocks or interruptions is connected to the ability of any

business, it becomes necessary to increase the management focus on working capital, asset utilization

and gearing levels.

(b) Effective forecasting – Execution of a rolling 13 week cash flow forecast helps in estimating or

judging the business ability to generate cash, to fund the needs of working capital, acquisition or

expansion plans for gaining steady growth without over- trading.

(c) Cost efficiency – Performance dashboards and monitoring key costs through KPIs will change timely

identification of negative trends.

(d) Highly skilled workforce – Business with a strong past is sure to draw the attention and attract

highly skilled workers.

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(e) Positive industrial relations – It is necessary to keep a track of the employee’s problems as it

definitely affects the business reputation, core activities as well as general costs and to see that these

issues are resolved.

(f) Customer diversity – One of the serious problems for SMEs is customer concentration risk which

can be reduced by actively looking for a diverse customer base.

(g) Contract term – Long term contracts gives the employees a feeling of security and also gives them a

Sense of stability as usually long term contracts are more cost effective.

To conclude, businesses in the near future will be quite difficult and hence, in order to ease it, SMEs can

help in strengthening the same. But, talking about mining services industry, working with both the

bigger and the smaller businesses that support them, the force and strength of the smaller industries is

praiseworthy.