In a sector marked by cyclical demand, high capital intensity, and increasing regulatory and sustainability pressures, mining, minerals and metals (MMM) companies are re-evaluating how they approach procurement and investment.
Faced with ongoing pressure to digitise, digitalise, automate and decarbonise, MMM companies need to remain competitive, which means, they have to become innovative and find new ways of funding technologies, infrastructure and services. At the heart of this change lies the choice between capital expenditure (Capex), operational expenditure (Opex) and then the best of both worlds, total expenditure (Totex).
Traditionally, Capex has dominated procurement strategies in the MMM space. Investments in processing plants, heavy-duty machinery, substations and other core infrastructure fall into this category. While Capex enables asset ownership, control and potential long-term value, it also comes with risk, particularly around high upfront cost and extended return on investment timelines.
Conversely, Opex-driven models offer increased flexibility by shifting costs from large upfront investments to ongoing, manageable expenses. This approach is gaining traction as MMM companies adopt cloud-based platforms, software-as-a-service (SaaS), predictive maintenance and pay-as-you-use solutions.
While not entirely new, Totex has in recent years started gaining momentum due to its ability to evaluate the total cost of ownership over the entire asset lifecycle, thus combining both Capex and Opex. This model moves the focus from ‘how’ money is spent to ‘why’, therefore aligning investment decisions with broader strategic outcomes.
An opportunity may appear relatively expensive in terms of Capex, but under the Totex approach it offers tangible economic benefits with an attractive payback period. Totex therefore emphasises the whole life cost of an asset compared to the initial capital outlay. The Totex model offers economic value over time through lower maintenance costs, higher energy efficiency and enhanced uptime. This shifts the procurement conversation from short-term cost savings to long-term value creation.
At the heart is data-driven decision making
Implementing a Totex strategy requires accurate, integrated data from design through to operation. This is where the integration of process and electrical data becomes vital. Tools that combine power management with automation allow operators to:
• Diagnose issues faster
• Compare equipment performance under different loads
• Optimise energy use relative to production throughpu.
• Extend asset life through predictive analytics
Looking at a real-world scenario, when deciding between a low-cost pump requiring frequent maintenance versus a high-grade pump with minimal intervention, a Totex view provides clarity by quantifying both the operational and capital implications.
Collaboration is strengthened
A successful Totex strategy also demands cross-functional collaboration. Procurement, engineering, operations, maintenance and finance must align around shared goals and speak a common language of value.
Historically, finance teams have focused on balance sheets and depreciation schedules, while operational teams prioritised uptime and asset reliability. Totex bridges this gap encouraging decisions based on outcomes, rather than accounting categories.
Totex is anything but theory. It is already adopted in regulated sectors, such as water utilities, where infrastructure longevity and service delivery are critical. For the MMM sector, Totex offers a pathway to:
• Reduce total lifecycle costs
• Enable outcome-based procurement
• Improve ROI visibility.
• Encourage innovation and sustainability
• Navigate digital transformation without overextending budgets.
Ultimately, Totex removes the boundaries set by Capex and Opex, allowing the MMM segment to take a more agile, technology-driven approach whilst also accelerating energy transition by focusing on outcomes as opposed to spend categories.
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