The size and complexity of mining operations have created diseconomies of scale and are a significant factor in diminished productivity in the global mining sector, according to a new research report by EY and the University of Queensland (UQ).

The report assesses the key productivity challenges, initiatives being developed to overcome these challenges and opportunities to better focus productivity improvement initiatives in the post-supercycle environment.

EY Global Mining & Metals Advisory Leader, Paul Mitchell says the research confirms the factors that have eroded mining sector productivity globally are wide and varied, covering labor, capital and materials, largely a legacy of the production-at-any-cost approach during the boom.

"We also found a very strong theme around the challenge of operating larger, more complex mining operations and it is clear this requires a new approach to increase connectivity, promote collaboration and foster productivity," says Mitchell.

"One miner aptly referred to the problem as the diseconomies of scale".

"The focus on increasing output meant mines had to be larger, but simply scaling up existing structures has made them much more complex to run and resulted in silos and diminished connectivity within operations it's created an integration gap within businesses and dealing with it requires an end-to-end approach.

"The productivity decline has been so large that cost cutting and point solutions are not enough. Significant costs have been stripped out of the industry and good efficiency gains have been made, but it is now time to look at sustainable long-term solutions to the productivity problem."