Mining companies that want to win in the future need to adopt a different mindset to the one dominating the sector today.
Many mining companies have a deeply ingrained, conventional view of their sector and the environment in which they operate. But mining exists in a large global ecosystem that goes beyond its own supply chain and beyond the stakeholders and customers that miners deal with on a daily basis. So, what are the key mindset shifts that need to occur?
1. Becoming a partner of choice
Miners can no longer afford to go it alone. To maximise innovation and growth, they need to be willing to form partnerships with elements of the broader ecosystem.
Strategic partnerships in mining are becoming increasingly popular as a means of facing market difficulties, streamlining innovation and funding exploration in a challenging time. But being a partner of choice is a title earned, not decided. Miners will have to think about what companies might want to work with them and why.
By partnering with another company, expertise could be shared, funds for exploration could be gathered and, in some cases, the senior company could provide a guaranteed market for the product. Today, joint venture projects are a way of pooling resources, funding exploration and achieving new levels of success in an increasingly competitive market, either at home or abroad.
Being a partner of choice is a title earned not decided.
2. Collaborating to protect mining as a “brand”
The entire mining sector has a stake in the reputation of mining. As brand awareness continues to spread along the entire supply chain – accelerated by growing use of social platforms – miners will need to collaborate more to protect the brand. To do so they will need to emerge from efficient converters of dirt to prominent builders of societal capital. Such collaboration must go further than just a coordinated public relations effort and public policy endeavours. It needs to result in real improvements in technical, commercial, and social outcomes – across the sector and all around the world. This means being better at everything – better safety records, better environmental performance, better community engagement and better labour relations. Companies must be prepared to police their peers, not just themselves, and to call out bad behaviour.
3. Becoming more (technologically) agile
There is a fundamental mismatch between the lifecycle of mining assets and the lifecycle of technologies and digital enablement which is disrupting the sector. This raises important questions about reconciling capital commitments, which may become redundant due to changes in mining techniques, processing, marketing or customer demands.
Even though miners have been working hard to become more agile and responsive to change, there’s still a long way to go. Technology can become a fundamental success factor. This is a world where ‘leading practice’ not ‘best practice’ is the goal. Rapid advancements in technology – such as robotics, remote operations, drones, machine learning, and blockchain – mean the innovations that are cutting edge today might not even exist in five or ten years’ time. So how do you build that flexibility into your mine plan and capital plan (as well as your workforce) if you’re developing a mine that will run for 20 or more years?
The necessity of innovation in mining has become a refrain across the globe. Deloitte and Ernst and Young argued in recent reports that innovation by mining companies would be an appropriate response to low commodity prices, and would better position them to weather the prolonged downturn that is expected to follow the supercycle. Both the Prospectors and Developers Association of Canada (PDAC) and Deloitte observed that while most mining companies agreed on the need to innovate, and while many were engaged in some form of innovation, innovation programmes were generally neither strategic, consistent, nor systematic. While some programmes took in novel ways to raise productivity, for example through automation, enhanced drilling or rock-breaking systems, integrated real-time data, and savings on energy costs, most were focused on optimising existing systems.
This is a world where ‘leading practice’ not ‘best practice’ is the goal.
4. Building a culture for a new world
Intrinsic to most mining companies is the tendency to control and manage, where a focus on the task at the expense of people is commonplace, resulting in silos and repetition. But this deep-seated disposition has to change.
While mines are frequently expected to bring benefits to a community – such as infrastructure improvements, education, and job opportunities – it is essential for the mining company to collaborate with legitimate structures within the community to assess the options best suited to their livelihoods. When expectations aren’t met, it can often be traced back to a lack of respect of local customs and values, collaboration within established structures within the community and communication with a community.
Companies that want to be truly successful are tasked with being honest and open from the start. For example, if a company knows its goal is to establish the mine and make use of mechanised equipment to limit employment, this must be communicated to all stakeholders and a skills development plan put in place to afford locals an opportunity to enter into the job market. This is prudent for the mine, as it helps to grow the community sustainably.
To create an organisation that is match-fit for the future, miners need to build a more constructive and effective culture – one that rewards collaboration and encourages people to work together towards Key Performance Indicators and safety standards. Forces must be activated simultaneously from multiple directions: top down, bottom up and across the organisation to create the kind of momentum that leads to sustainable change.
Authentic, informal leaders can drive the transformation by harnessing positive energy and focusing on a few critical traits and behaviours. Aligning the organisation’s formal Key Performance Indicators with the new direction will be critical.
5. Rethinking talent and diversity
One of the biggest mindset shifts that must occur in mining is the one around talent and diversity. Mining has traditionally drawn skills from a narrow pool of engineering and business graduates, and while this has served the sector well to-date, it will not deliver what mining needs for the years ahead. Talent from non-traditional sources can provide the range of skills and thinking that will enable miners to deal with future challenges. In particular, an entrepreneurial mindset and a start-up mentality should be nurtured to encourage innovation and growth.
Mining companies must recognise the need to change their talent strategy, open up their culture to welcome it, and then go looking for diverse talent and bring it into the organisation.
References:
- PwC’s future in sight series – We need to talk about the future of mining
- Journal of the Southern African Institute of Mining and Metallurgy: Mining redesigned – innovation and technology needs for the future – a South African perspective (M. Hermanus)
