Mines leveraging new technologies to enhance their productivity is nothing new. Work also needs to continue on lowering nonlabor operating expenditures, notably by improving procurement performance. Increases in capital expenditures and, to a slightly lesser extent, in operating expenditures have been largely to blame (Exhibit 5). The number of workers also has risen, at a CAGR of 6.6 percent over the full period. Despite the impact of the fall in mining MFP, the sector has made a significant contribution to the strong overall growth in national income so far this decade through a substantial improvement in Australia's' terms of trade. For example, the potential to implement advanced dispatching processes in underground mining operations is clear, but it has still not been adopted at scale. Mining equipment in Australia runs at lower annual outputs than most of its global peers. Over the past year, mining executives have received one message, loud and clear: markets will no longer tolerate production at any cost, according to a report by Deloitte. CEOs have been acknowledging to investors that poor productivity performance must be addressed. The slowdown in commodities demand growth from 2011 has introduced a general mood of austerity across the industry. But the TFP approach measures output in terms of value added, and so is handicapped in two important areas: it is influenced by changes in geological conditions such as ore-grade quality, and it is affected by commodity prices, which are constantly moving. How digital innovation can improve mining productivity, McKinsey_Website_Accessibility@mckinsey.com. Ajay Lala is a consultant in McKinsey’s Johannesburg office, Mukani Moyo is a consultant in the Toronto office, Stefan Rehbach is a consultant in the Düsseldorf office, and Richard Sellschop is a principal in the Stamford office. 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