By Ben Lee
This was meant to be a post about all-in sustaining costs or AISC.
I’ve only been in mining a hot minute, but I’ve spent over a decade building businesses and investing in Real estate & Stocks. And off the back of Post #1 Australia’s Big Short, I had a comment from an operator I really respect. It changed how I think.
“The two words that undermine your strategy, Ben: fixed costs.”
You can only mine at a loss for so long before you go broke. And fixed costs don’t go away just because they’re inconvenient. In fact, I’d wager they’ve steadily grown as a percentage of total costs over the last few decades.
The higher your fixed-to-variable ratio, the more you’re forced to prioritise short-term cashflow over long-term value. If holding costs were negligible, you could sit and wait. But they’re not and they never will be.
Part of that fixed burden now includes ESG and social license. Imagine laying off an entire mine site just to preserve value. Or trying to rehire five years later. Or pulling funding from the local hospital because it extends mine life from 15 to 20 years.
But then a mine planning manager hit me with a harder truth:
“Fixed costs are controllable—we just pretend they’re not. And ESG? It’s an absolute killer.”
That tension stuck with me. Because both are true. We do carry social obligations. And we do make choices that convert avoidable costs into permanent liabilities.
So the question becomes: Are we stewarding orebodies or surrendering to a system we’ve stopped questioning?
We’ve Mistaken Comparability for Competence
My superpower has always been abstract thinking. I’ve spent my life studying invisible systems—psychology, philosophy, economics, strategy, the forces that shape how people behave and how businesses run.
And once I pointed them at mining, something clicked, then something cracked.
From Benchmarking to Mimicry
This isn’t a new pattern.
Last year, while recruiting for a civil estimating role, a managing director told me:
“Tier 1 companies benchmark to build their budgets.
They look sideways before they look inward.
Us little guys? We use first principles and build from the ground up
because if we get it wrong, we don’t eat.”
And that got me thinking about mimetic theory.
So… what is mimetic theory, Ben?
At its core, mimetic theory says this:
We don’t invent our desires, we catch them.
Like a virus, we imitate what others want, because they want it.
And once enough people want the same thing, we don’t just imitate—
we compete.
It’s not logic. It’s imitation amplified by proximity, pressure, and perception.
And when that imitation scales? We enter what is called…
The Mimetic Spiral
Copy → Compete → Collapse (or Scapegoat)
- Copy – We imitate what others do, often unconsciously.
- Compete – We escalate irrationally to win approval, funding, headlines.
- Collapse (or scapegoat) – When reality hits and the model breaks, someone gets blamed.
A Real-World Example: The Bellevue Cycle
Think of Bellevue Gold.
They had all the right signals, strong grade, clean PFS, AISC under control, ESG credibility.
It was a textbook success story.
But when the mine went live? Reality didn’t match the narrative. Was it overly optimistic? Or was the PFS structured to win mimetic approval from analysts, funds, and institutions trained to reward the familiar?
That’s the Mimetic Spiral in action
Copy the format → Compete on optics → Collapse when reality arrives.
This isn’t about Bellevue alone. They might just be the first to hit the wall in a system built on imitation.
The Anti-Mimetic Model: MBM
So I started asking myself:
What would a non-mimetic system even look like?
That’s when I turned to Charles Koch’s Market-Based Management (MBM). In many ways, it’s the philosophical opposite of mimicry.
MBM isn’t soft. It’s structured. It’s capitalism with a conscience designed to let people self-actualise through value creation.
- Vision aligns people to something bigger than profit.
- Decision rights put power in the hands of those closest to the problem.
- Knowledge processes build internal capability not rented dependency.
- Incentives reflect contribution, not just compliance.
- Culture reinforces principled entrepreneurship, not groupthink.
MBM is stewardship built as a system. It’s Stage 4+ leadership: identity is internal, not borrowed.
And it’s not just theory. It’s showing up right here in Australia just not in mining.
- Telstra decentralised decision-making to drive responsiveness.
- Boral, under Vik Bansal, empowered business units for long-term value.
- Ventia gives frontline teams autonomy inside a high-stakes operating model.
If Telstra and Boral can use MBM to manage networks and materials…
Why is mining still running a 1990s command-and-control playbook?
From Optics to Stewardship
Before writing this, I pulled together a decade of AISC data—2013 to 2025. The trend is clear:
Costs are rising. Margins are shrinking. Pressure is compounding.
So I sense-checked it with a few mine managers.
Here’s what came back:
- Labour makes up 40–50% of total site budget
- ~60% blue collar
- ~30% white collar
- ~10% admin
- Next biggest costs are ground support and energy, depending on method
That gave me a baseline.
Then I asked:
What if we stopped optimising for optics and optimised for stewardship instead?
Thesis Extension: Has AISC Standardised Thinking?
AISC didn’t just standardise performance. It may have unintentionally standardised thinking.
When one metric becomes the dominant lens for cost, performance, and value—it doesn’t just shape decisions. It shapes culture.
And when culture converges on one narrow definition of success, bold innovation dies quietly.
Why risk deviating from the benchmark if the benchmark defines your credibility?
What begins as discipline ends in conformity.
AISC made everything legible to the market, while making real innovation nearly invisible.
A Simple Scenario
I modelled a hypothetical Australian mining operation from 2015 to 2025.
Two paths:
- Traditional cost optimisation
- Stewardship-first planning
The only changes:
- Invest in retention
- Optimise sequencing
- Smarter backfill and rehandle
- Cut-off grades tied to long-term NPV, not quarterly optics
Result:
2–5% margin improvement per year.
Not massive—but enough to change a company’s fate.
Now imagine if we measured value differently.
Not just AISC.
But things like:
- TOR (True Orebody Return): NPV per tonne removed
- VFRI (Value-to-Future-Risk Index): deferred margin vs. today’s gain
- SIR (Stewardship Investment Ratio): margin % reinvested into the system
I’m not saying I’ve cracked the formula.
But I am saying: AISC isn’t telling the full story.
The Moral Signal of Cut-Off Grade
There’s one more piece I can’t leave out.
This line has been echoing in my head for months:
“Cut-off grade isn’t just a technical parameter. It’s a moral signal.”
That only makes sense if you believe the orebody has its own logic and legacy.
If you’re just chasing margin, it’s a lever.
But if you’re stewarding something sacred and finite?
Then every time we raise it to hit targets, we sterilise future value.
Every time we defer low-grade, we outsource hard decisions to people not yet hired.
And usually?
We do it to match our peers.
“Look, I know we’re sterilising value. But corporate wants optics. We raise the cut-off, we look like heroes. We lower it, and we get chewed out.”
—Operations Superintendent (anonymized)
That’s not leadership.
That’s entrapment.
What If We Led?
So I’ll leave you with this:
What if mining wasn’t about managing risk…
But about stewarding complexity?
What if we stopped asking, “What’s everyone else doing?”
And started asking: “What does this orebody actually need?”
Because until we do that—
We’re not leading.
We’re just copying.
AISC brought us clarity, but it also brought conformity.
It made performance legible to the market—
but in doing so, it may have blinded us to long-term value.
Innovation struggles when success is defined by sameness.
And stewardship dies quietly when no one’s rewarded for it.
The orebody always knows.
The question is:
Do we have the courage to listen?
Up next in the series: Post #3 – The Steward’s Playbook: Mining’s Red Pill Moment
About Ben Lee
Ben Lee is a seasoned global mining recruitment and investment specialist with a deep background in connecting high-calibre technical, operational, and executive talent across the international mining sector as Partner and International Business Director at Raw Earth Recruitment.
Throughout his career, Ben has advised mining companies on how to align talent, technology, and capital to achieve long-term growth. He is passionate about modernising the sector, bridging the gap between traditional mining practices and emerging technologies, and fostering leadership that thinks beyond quarterly profits.
Beyond his corporate work, Ben is an influential industry commentator and writer. His insights on mining workforce trends, investment strategies, and operational excellence have resonated with audiences across professional networks, where he frequently contributes articles and thoughtful commentary on the future of mining.
Ben brings a unique perspective informed by hands-on experience across contractor and owner teams, enabling him to navigate the complexities of mining’s boom-and-bust cycles and advocate for more resilient, future-focused solutions. He is committed to helping mining evolve into a more sustainable, innovative, and strategically managed industry. You can connect with Ben on his LinkedIn.
