Labor rate setting as a framework for enhancing efficiency of mining industry

Abstract

Production engineering in mines of the Norilsk Division of Norilsk Nickel is experiencing considerable modification. Under conditions of continuous retrofit, production improvement and digitalization and unmanned machinery phase-in, the efficient labor management is a prerequisite of production in a transition period. It is emphasized that the Company’s top managers pay peculiar attention to the primary pitch of the production chain—exploration and extraction of rich ore to be concentrated later on and sent to smelting of nonferrous metals (palladium, nickel, platinum copper, as well as silver and gold). The increase in available ore reserves and the gain in production output are amongst the top priority trends of advancing the Norilsk Division of the Company. The article describes the labor rate setting systems adopted at Norilsk Nickel’s Polar Division and generalizes the experience gained in labor rate setting in the mining industry. The photo chronometry observations are illustrated, and the structure of the work time expenditures and losses is analyzed. The elaborated local regulatory documentation enabled a precision computation of labor force as per the actual labor conditions, labor management and occupational safety at a specific production unit. Labor rate setting almost always entails organizational changes—adjustment of operating regime, shift planning, etc., and is often a catalyzer of innovations to be introduced. Furthermore, labor rate setting enables planning, budgeting and real-time management of operations toward meeting strategic challenges in the today’s business environment.