Response To Memo From K. Abbott-Gill, The Cfo Of Antipodes Mineral Case Study

Response To Memo From K. Abbott-Gill, The Cfo Of Antipodes Mineral Resources Company - Case Study Example The core business in a mineral company is; mining and therefore most investments in such entities revolve around this central activity. The following are the areas I would expect AMR to make their investments: †¢ Prospecting and exploration of minerals: The process of pinpointing deposits is costly and time consuming. A mineral company must therefore, invest in the process of geological mapping to stay in business by securing the supply end of its operations. The amount of drilling and excavation involved in mining is determined at the exploration stage and therefore, this preliminary phase of the mining process determines the financial allocation required to purchase the right tools for the jobs that include among others, drilling and transportation equipment. †¢ Equipment: After locating the mineral deposits in the exploration stage, a mining company like AMR in this case, must invest in the acquisition of the correct equipment. The success of a mining process is entirely dependent on the available excavation, drilling and transportation machinery. AMR must therefore commit to continuously acquiring proper tools, something that is always a work in progress project for companies in this industry since new, more efficient equipment are manufactured everyday. †¢ Acquisition of mines: After the completion of exploration process, mining companies must make ownership of such mining locations their projects. This can be done through partnerships with both governments and local communities in the mineral rich locations. It is my expectation that a mining company should make significant investments in acquiring mines to ensure sustainability of their respective material supply chains. Value addition on minerals: Most minerals fetch better prices if value is added onto them through diverse industrial processes. I would therefore expect a mining company to make investments in value additions for their minerals that involves construction of value addition plants. Transportation network infrastructure: The process of transportation from mining field to value addition plants for a mineral company is crucial to its success. How fast and efficiently they can excavate, transport and process ores determines the consistency of mineral supplies to th eir customers both in their localities and the world over. A mining company must therefore invest in transportation system that include ; construction of shorter routes to their plans to reduce fuel costs, acquire large capacity transport equipment, construct railway lines as well as properly maintain their roads (Bomsel, 1990). This investment ensures that such a company is not only efficient in its operations but is also profitable through transportation cost reduction. Acquisition of mining licenses: the process of securing a mining license, in as much as it may not be tangible is a crucial project in the workings of a mining company. Securing these licenses require serious negotiations and involve the hiring of attorney services. A mining company must therefore invest in the best lawyers and trade negotiators to handle this aspect of their operations. Trainings of staff: Employees are expected to hold particular skill sets at the time of employment. To ensure efficiency in actua l company operations, AMR must invest in additional training of staff so that they acquire skills specific to the company’s activities. Employees are the most valuable assets outside the balance sheet and their training therefore, is directly proportional to an organization’s operational efficiencies and profitability. Training is one project I expect to see the company invest its resources. Green energy: Energy consumption in the mining process is a major cost element and coming up with cheaper more environmentally sustainable energy sources is one area I would expect to see