For a decade now, Deloitte has released an annual report examining key trends in the mining industry. The 2018 edition of Tracking the trends has been released, where Deloitte’s global mining professionals again help to identify strategies for companies in a sector known for its historic booms and slumps.
Here’s a short overview of the 10 trends that have been identified for 2018.
Bringing digital to life
To stay competitive, companies need to innovate and make decisions based on thorough and rational analysis of data. Digital thinking should inform business strategy.
Overcoming innovation barriers
The culture of mining companies can be risk-averse and there are systemic barriers to new ways of doing things “when innovation initiatives must compete for capital against projects with a shorter-term payback”. But businesses need to innovate – not only technologically, but also in the ways they relate to their stakeholders, and how they approach the future of work and commodities – in order to remain viable in the long term.
The future of work
Digital solutions, such as robotic process automation, autonomous equipment and artificial intelligence will continue to change the mining workplace, both on-site and in the office. As a result, some core mining activities are able to be performed from locations that can support a more diverse and inclusive workforce.
The image of mining
Mining is “still operating under a legacy of weak environmental practices, fractious community relations, stock price under-performance relative to other sectors, and a historic lack of workforce diversity”. In a media landscape characterised by intense scrutiny, mining companies must take proactive steps to improve their image in the eyes of customers, employees and the public.
Transforming stakeholder relationships
Community and government pressure means that companies need to adapt to achieve measurable social outcomes, such as expanding local employment opportunities and improving environmental protection.
With water scarcity a pressing global issue, mining needs to find more sustainable ways to manage its water usage.
Changing shareholder expectations
Shareholders, institutional investors and analysts are watching the mining sector carefully and are vocal in demanding greater accountability. In light of this, mining companies are focusing on re-establishing credibility with these groups.
Reserve replacement woes
Fluctuations in supply and demand continue to challenge the industry. Although many companies are experiencing a tentative turnaround at the moment, they’ll need to “find a more agile way of replacing reserves – one that allows them to engage in exploration and development without sinking in large amounts of capital for long periods of time”.
Realigning mining boards
Boards need to reflect the drive toward sustainability, digitisation and collaboration, and consciously move away from outdated paradigms. New skill sets, and diverse perspectives are vital if mining boards are to effectively transform the status quo.
Commodities of the future
Mining executives need to continue to predict future disruptors in order to steer their businesses. “To assess which commodities to invest in, and which to divest, miners need to keep their fingers on the pulse of fluctuating consumer demands, global demographic and economic shifts, and the effects of environmental change.”