A Practical Reflection on Hidden Costs, Precision Engineering, and Operational Survival This week, I revisited a robust technical report on operational costs in mining. The document, published by the respected SRK Consulting, is a valuable compendium: it details costs by activity, separates fixed and variable expenses, and discusses methodologies such as Activity-Based Costing (ABC), among other essential practices for reducing expenses and maximizing value. However, one thing caught my attention: there was no mention of the cost of error — the kind that doesn’t appear directly on spreadsheets, but is paid for through rework, metallurgical losses, poorly executed blasts, geotechnical instability, or even irreversible social and environmental impacts. I couldn’t help but recall 2019, when I was in Chile for a summer internship, visiting a low-grade iron ore operation. In that challenging context, margins were so tight that attention to every detail made a difference, and all quality and uncertainty control systems (QA/QC) were tuned to the highest level. I witnessed precision engineering being used as a tool for economic survival. In that setting, error simply wasn’t an option. At that moment, I realized a stark contrast with the mindset I’ve often seen in Brazil: the idea that "errors can be absorbed", a mentality historically supported by high ore grades and a more forgiving market environment. But that reality no longer exists. Today, mining operations in Brazil are subject to much stricter demands for precision, control, social responsibility, and sustainability. So, the big questions are: 👉 How much does an error really cost? 👉 What is the impact of uncertainty on our decisions? 👉 Why is there still resistance to modeling uncertainty as a strategic cost? As my professor Joao Felipe Costa wisely says: “Error exists, and our role is to quantify the space of uncertainty.” And he’s absolutely right. There are now statistical models, geotechnical systems, sensors, simulations, and algorithms that allow us to measure operational risks and uncertainties with remarkable precision. And every percentage point of ignored uncertainty is, in practice, a hidden cost that undermines the competitiveness and sustainability of any operation. In a sector under pressure from narrow margins and high responsibility, increasing environmental pressure, stricter social demands, and a diversity of political and economic conditions, incorporating the cost of error into decision-making models is no longer a luxury: it’s a technical and ethical urgency. Ignoring the cost of uncertainty is no longer acceptable. It’s time to turn this “invisible Cost” into a strategic indicator. Claiming certainty without knowing the degree of uncertainty doesn’t eliminate the error. The error exists — and must be accounted for. Precision Engineering Is Impact Engineering We are called to act with excellence and responsibility. We must look beyond the visible CAPEX and OPEX, and include the variables that truly define long-term viability: error, uncertainty, trust in data, and a commitment to social and environmental impact. That is the kind of engineering I believe in. That is the future I want to help build. If you believe in this too, let’s talk. 📩 Leave a comment or send me a message. 💬 Let’s turn data into decisions — together.