A comprehensive and independent report titled “Tracking the Trends” by leading auditing organisation Deloitte, summarises the top 10 mining trends of 2018. The report outlines the consistent change within the industry over the past ten years, demonstrated through mining companies engaging in significant acquisitions and consolidation, commodity prices having reached historic highs and lows, and the digital revolution causing irrevocable operation realties to shift.
Tracking the Trends identifies strategies and opportunities for mining companies to explore to potentially smooth out recovery and explores potential industry disruptors the mining industry may endeavour in the future. Below is a summary of the top Mining Trends within Deloitte’s report (Tracking the Trends 2018):
- Bringing Digital to Life – The ability to organise manage and process data is quickly becoming a competitive differentiator within the mining industry. Mining companies need to make corporate decisions based on digital thinking to transform business strategy and practice to improve how decisions are made.
- Overcoming Innovation Barriers – Innovation is crucial for the mining industry to transform. Needing to demonstrate near term returns whilst adhering to a traditional risk-free culture, which does not encourage collaboration or impede efforts to be innovate. Innovation isn’t limited to technology and includes adopting more innovative approaches to engage with stakeholders, re-envision the future of work and identify in commodities that will be in greatest demand moving forward.
- The Future of Work – Digital solutions being adopted in the mining industry including robotic process automation, artificial intelligence and autonomous equipment, have the potential to increase performance in the industry. But this brings with it the potential to cause disruption, due to the need to retrain employees to use the technology and potentially redesign jobs within the office and on site.
- Shifting Perceptions – Many companies are embarking on the mission to rebuild trust with communities, investors, employees, governments, and the public. These companies will need to be taking public stances on corporate social responsibility, adhere to voluntary sustainability standards, and pass resolutions for shareholders regarding increased disclosure on climate change.
- Transforming Stakeholder Relationships – Companies need to determine how to make a concreate social impact which adapts to the benefit of multiple different stakeholder groups rather than approaching relationships with both the government and community due to compliance.
- Water- Finding Sustainable Solutions to a Pressing Issue – The UN estimates water scarcity impacts around 40% of the global population.
Mining companies need to improve their approach to water management through more innovative methods of containing and treating water to prevent water contamination of water flow and attempting to find new approaches to reduce, re use and recycle in water scarce areas.
- Changing Shareholder Expectations – Performance measures should reflect diverse objectives to generate value for constituencies other than just shareholders including customers, employees, suppliers, and communities. Generating value for a diverse range other than shareholder would allow boards to focus on long term strategies, development, planning for success whilst linking executive compensation to broader corporate goals such as goals related to good corporate citizenship and ethical behaviour.
- Reserve Replacement Woes – Mining companies will need to find an agile way to replace reserve that allows to engage in development and exploration without sinking in a large amount of capital or an extended period of time as supply constraints plague the mining industry.
- Realigning mining boards to drive transformation – A range of diverse perspectives are necessary for mining boards if they are to effectively challenge organisational assumptions, assess the relevance of new ways of thinking and help to determine whether or not the organisation is taking not enough or too much of a risk. Mining boards set in old ways of thinking will face hardships to fulfil new obligations, to take a more active role in challenging the executive team regarding corporate strategic, digital disruption, talent management and emerging risk factors.
- Commodities of the future – Predicting future disruptors – Having a long-term view of accessing how emerging mining market trends may potentially affect the demand for specific commodities and being able to turn disruption into opportunity.