However, the industry is still at a pivotal point as it faces challenges from cybersecurity threats, to technological disruption and environmental issues.
Mining companies now face key choices about where to invest and how to position themselves in the coming years.
Deloitte Global’s 9th annual Mining Report, Tracking the Trends, explores how mining companies can succeed by understanding and reacting to 10 trends that are expected to impact them in 2017 and beyond.
In an increasingly complex world driven by new technologies, mining companies are turning to innovation to fuel success. In recent years, the mining sector has invested in technological innovations such as driverless trucks, sensors and advanced analytics to reduce cost, streamline equipment maintenance and prevent safety incidents.
Today, new technological advancements are rapidly driving the next wave of productivity gains. Technologies such as drones, real-time modelling and geo-coding are creating real-time, productive and functional improvements.
Historically, the mining industry has underperformed in this space, with total shareholder returns in steady decline since 2011. Optimising portfolios, strengthening M&A processes, sustaining focus on cost and making long term investments are key to improving this performance.
For the sector to realise major breakthroughs, companies will need to shift from a go-it-alone mentality, to one that recognises the value of operating within an ecosystem.
Adopting new forms of collaboration including turning vendors into partners, collaborating with competitors and building extended partnerships can help companies achieve this goal.
While there are a number of benefits to embracing digital capabilities, miners must figure out how to turn potential benefits into reality. To thrive in the future, companies must embed digital thinking, processes and structures into the entire organisation.
As technology permeates all industries and sectors, mining is not immune to the accelerating threats of cybersecurity. Mining companies are subject to a wide range of risks, and with an evolving threat landscape, leaders must strengthen their cybersecurity programs.
To foster a shared vision for the mining sector, companies and governments could benefit from finding a middle ground that aligns interests and enhances cooperation when it comes to regulations.
Winning a social license to operate is especially difficult for miners in light of a number of recent, catastrophic mining accidents and as communities continue to raise concerns about the industry’s impact on the environment. By lessening their environmental footprint, miners can foster the community trust needed to regain their social license to operate.
While commodity prices have begun to recover since they began falling in 2011, following years of record profits industry leaders now understand the importance of adopting operating models that can help them respond to industry challenges and market volatility.
Companies that took steps to strengthen their balance sheets in the latest round of cost take-outs are now considering how to align their operating models against these choices so they can position themselves to meet their strategic objectives and sustain their new, lower cost positions.
Productivity improvement has been elevated to a mining industry mantra following the commodity price weakness of recent years. Companies, however, need to recognise that productivity goes beyond reducing costs and streamlining processes: mental health, wellness and diversity should also be considered and addressed.
With governments demanding greater levels of transparency, the sector is working to strengthen compliance and disclosure practices. By standardising information, considering the benefits of over-reporting and reviewing IT systems to ensure consistent data measurement and reporting capabilities, companies can adapt to a step change in the reporting environment.
