Impact Of Copper Price Variation On Economic Efficiency And Environmental Sustainability Of KGHM Operations

What is the impact of copper price variation on the economic efficiency and environmental sustainability of KGHM operations. 

Our approach

BHP is an Anglo-Australian mining company which deals with mining of minerals and petroleum. T is the world’s largest mining company and was previously known as BHP Billiton. It is headquartered in Melbourne Australia and was founded in 1885. After the merger between the Dutch company Billiton and Australian BHP, there was rapid growth and the company value tripled be between 2004 and 2012. Fortune magazine ranked it the world’s biggest company by capitalization and the third biggest company in Australia based on revenues received in 2017 (Ackroyd et al, 2016). The Australian based company is listed in various stock markets like the ASX, London stock exchange and the NYSE. It is constitute of the FTSE 100. IN 2017 however, the company scaled down from BHP Billiton to BHP and Billiton assets were rebranded to south32. It deals with mining of major metals like copper, iron, gold, natural gas, nickel and uranium. It is also a major contributor of drilled petroleum around the world. In 2017, the company announced that it would sell off its US oil business as a strategy to revamp its growth in other continents. It operates in the metals, mining and petroleum industry (Alvesson, and Sveningsson, 2015).

Some of its well-recognized people in the management include ken Mackenzie as the chairman and Andrew Mackenzie as the CEO. In 2017, the revenues for the mining giant was reported as US$38.285 billion while the operating income was at $ 11.753 billion. The number of employees and contractors working for the company is 65,000 as at December 2017(Alvesson, 2016). Also, the net income is $6.222 billion in 2017.

The basis of our philosophy is the safe and sustainable production of metal products. Safety of production is an absolute priority and our goal is to become the safest steelmaking and mining company in the world (Bolman and Deal, 2017).

The company has steel mills in more than 20 countries around the world on four continents, both in developed and developing markets for metal products. In 2012, the Company's turnover amounted to US $ 84.2 billion in the production of steel in 88.2 million tons or about 6% of world total production.

About 35% of metal products are produced in the Americas, 47% in Europe and 18% in other regions, including Kazakhstan, Ukraine and South Africa (Blockeel, et al, 2016).

Mining is one of the key elements of BHP development strategy. In 2012, 55.9 million tons of iron ore and 8.2 million tons of coal were mined. Mining has a great development potential with an approved plan to increase the extraction of iron ore to 84 million tons by 2015 (Bohari and Fuad, 2017).

Mineral Production

Currently, coal and iron ore are mined in 10 countries: Algeria, Bosnia and Herzegovina, Brazil, Canada, Kazakhstan, Liberia, Mexico, Russia, Ukraine and the USA.

Research and Development Centers

Over 1,400 researchers work in 11 research centers. In 2011, more than US $ 300 million was spent on R & D needs.

BHP Group consists of six structural divisions: Leaf Rental America, Leaf Rental Europe, Profile Rental America and Europe, AASGN (Asia, Africa and CIS), Mining and Distribution. All production facilities are part of one of these units.

 BHP Consultants is the leading consulting company in the mining industry, providing services in the field of geological exploration and mining, as well as the financial sphere of mining. We work with our clients both in the planning of new mining enterprises and in improving activities at existing mining enterprises, focusing on achieving optimum productivity and profitability. With more than 30 years of experience in over 8,000 projects, BHP is a recognized expert in the mining industry. The scope of our activities includes mining, geological exploration, geomechanics, geology, feasibility study (FS), strategy optimization, technical audits, expert evaluation and business improvement services.

Our clients are mining companies, insurance companies, banks and investors. BHP has opened a new branch in Russia for efficient delivery of services. BHP is a leading consulting company in the field of mining with offices located in Australia, Canada and the UK. BHP is an independent company, 100% owned by its employees.

Clients of the BHP are geological exploration and mining companies, corporate consultants, financial institutions and insurance companies. BHP will readily consider requests from customers from all over the world.

Since the company was founded in 1885, we have completed more than 10,000 projects, which have become a unique material for the creation of a global database. The department for the comparative analysis of production indicators, established in 1885, compiled a significant database on the analysis of costs, productivity and efficiency of mining. Since the company's creation, the BHP team has grown to more than 200 specialists, and continues to increase, expanding the potential and experience. Qualifications and experience of employees cover the spheres of mining, geology, financing and management.

The total number of years of experience of all employees in the field of mining and geological services is 400 years and more than 1000 years of experience in the mining industry.

The team includes recognized experts with a worldwide reputation, as well as Russian-speaking staff specializing in various mining disciplines (Bull, et al, 2016).

Mining

Corporate culture of the organization is a developed system of beliefs, rules, norms, behaviors, goals and values, social and organizational climate that are shared to varying degrees by all members of the company and which are decisive in how people should work and behave. Modern psychology considers corporate culture as one of the powerful universal levers allowing to influence the whole collective of the firm and direct it to an effective solution of goals and task. BHP must emphasize that the carrier of a corporate culture is, first of all, the collective and every concrete person. The management's understanding of the role and significance of the organizational culture, the ability to change it with the aim of successful organizational and production changes is the most important condition for the effective functioning of the company (Edwards,2015).

It is proved that organizational culture is an effective method of influencing the socio-psychological climate and behavior of the company's personnel, and, consequently, the results of its successful activity. Forming and managing a particular value system, one can predict, shape, plan and manage the behavior of employees. But, at the same time, you should pay close attention to the already established within the organization relations between people (Hogan, and Coote, 2014). Without looking at the team they get far from the corresponding results, which do not justify their hopes or the funds spent. The main reason for this is that the promoted norms and values ??conflict with existing ones and are explicitly or secretly boycotted by the majority of the company's members.

Formation of organizational culture usually begins already at the stage of personnel selection. Specialists of recruitment and recruitment agencies note that not long ago, in addition to professional skills for job seekers, employers began to take an active interest in their socio-psychological, behavioral and image characteristics, the psychological type of the employee, and psychologists became involved in such stages as acquaintance , adaptation and training of personnel with existing or implemented corporate culture.

Management of organizational culture consists in its formation, maintenance, analysis of the results and adjustments. According to the results of the analysis, the psychologist issues a detailed opinion on the state of affairs and recommendations for the development and management of corporate culture. At the same time he himself acts as a consultant in this long and complicated process (Kinley and Ben-Hur, 2015).

Management and formation of the corporate culture of the organization. The role of the psychologist. For a long time already psychologists have carried out research, the purpose of which was to identify factors that affect human behavior in the company. Among them there are two main groups.

Research and Development Centers

A group of growth factors is the satisfaction received from one's place in the company and the work performed, the social significance and recognition, the awareness of oneself as an integral part of the collective, the specialist without which the effective operation of the unit or the whole company is impossible.

So, if the first group of factors is realized by the person as if a priori, then the second is more complicated. Unfortunately, not everyone is able to correctly assess a group of growth factors and find something valuable in the comfort of their personality within the company within the company. It is the task of a psychologist to help such people correctly understand and position themselves (Mkude, and Wimmer,2015).

Another important task is to reduce staff turnover for various reasons. The effectiveness of the work of a psychologist is directly related to fluidity. If you think about it, it becomes obvious that the corporate culture is responsible for the behaviors of staff in BHP. It is possible in a company with high staff turnover, because there is simply no one to be its carriers. If you think that your company's organizational culture is imperfect, you need help in its development, formation and management .The management styles used in the organization, the nature of the relationship with employees and subordinates

This style of leadership does not interfere with the activities of the collective, and the workers are given complete independence, the possibility of individual and collective creativity. The manager with the subordinates is polite, ready to cancel the decision he made earlier, if this threatens his popularity (Price, 2015).

Political- as a big investor in many countries, BHP has been facing challenges in some of the countries it operates in like in South America where there are some political wars. However, most of the countries are like calm politically.

Economic- the company was affected in 2008 when there was the global economic crisis. The price of petroleum globally has also been dropping.

Social- the company has been embraced by many society. It also helps the society through CSR.

Technological- a lot of technology has been invested by the company and its innovative technology is good for the company.

Ecological-the nature is very viable for mining and petroleum drilling in many parts of the world

Legal-many laws have been put up by governments in order to control mining and petroleum industry and this has been hurting the company’s operations.

Organizational Structure

Organizational Culture 

In order to create the most comfortable working conditions and, as a result, to obtain the greatest return and result, the employee is guaranteed:

- The opportunity for professional and personal growth,

- Competitive salary,

- An opportunity to build a career, including thanks to the well-functioning work of personnel performance evaluation systems,

- Creative and interesting work,

- Advanced training, including through training within the company and attracting external resources.

Conclusion

For BHP, the first stage is working with students of senior courses of basic institutes or directed to practice from other universities. Specialists of HR departments, together with the heads of the respective departments, where students practice, select students most capable and inclined to leading work, and prepare them for specific activities within the organization (Song, et al, 2017).

The other stage is working with line managers of the top management level. Appointment of managers to senior positions is a complex process. One of the main difficulties is the choice of a candidate who meets many requirements. The head of the top management must know the industry well, and also the organization (Stepan, 2016).

References

Ackroyd, S., Crowdy, P.A., Adler, P., Alvesson, M., Alvesson, M., Alvesson, M., Alvesson, M., Alvesson, M., Berg, P.O., Alvesson, M. and Sköldberg, K., 2016. On the Naming of the Rose: Interests and Multiple Meanings as Elements of Organizational Culture. In Changing Organizational Culture: Cultural change work in progress . Berlin: Jossey-Bass.

Alvesson, M. and Sveningsson, S., 2015. Changing organizational culture: Cultural change work in progress. Routledge.

Alvesson, M. ed., 2016. Organizational culture. Sage.

Blockeel, C., Drakopoulos, P., Santos-Ribeiro, S., Polyzos, N.P. and Tournaye, H., 2016. A fresh look at the freeze-all protocol: a SWOT analysis. Human reproduction,.

Bohari, A.M., Hin, C.W. and Fuad, N., 2017. The competitiveness of halal food industry in Malaysia: A SWOT-ICT analysis. Geografia-Malaysian Journal of Society and Space,.

Bolman, L.G. and Deal, T.E., 2017. Reframing organizations: Artistry, choice, and leadership. John Wiley & Sons.

Bull, J.W., Jobstvogt, N., Böhnke-Henrichs, A., Mascarenhas, A., Sitas, N., Baulcomb, C., Lambini, C.K., Rawlins, M., Baral, H., Zähringer, J. and Carter-Silk, E., 2016. Strengths, Weaknesses, Opportunities and Threats: A SWOT analysis of the ecosystem services framework. Ecosystem Services, pp.99-111.

Edwards, A.R., 2015, September. Integrated operations (IO) in mining and oil and gas, what can we learn from each other?. In SPE Middle East Intelligent Oil and Gas Conference and Exhibition. Society of Petroleum Engineers.

Hogan, S.J. and Coote, L.V., 2014. Organizational culture, innovation, and performance: A test of Schein's model. Journal of Business Research, 67(8),

Kinley, N. and Ben-Hur, S., 2015. Changing Employee Behavior: A Practical Guide for Managers. Springer.

Mkude, C.G. and Wimmer, M.A., 2015, May. Studying Interdependencies of E-government Challenges in Tanzania along a Pestel Analysis. In ECIS.

Price, S., 2015. Workers' rights in government firing line. Green Left Weekly, p.7.

Song, J., Sun, Y. and Jin, L., 2017. PESTEL analysis of the development of the waste-to-energy incineration industry in China. Renewable and Sustainable Energy Reviews.

Stepan, J., 2016. The impact of copper price variation on the economic efficiency and environmental sustainability of KGHM operations.