“Aside from current pressure of the commodity price slump, productivity in the global mining sector is down almost 30% in the last decade,” says Roger Dixon, SRK corporate consultant. “South African mines need to move away from a dated management model if we want to address productivity in the longer term, and at the same time win the hearts and minds of employees and other stakeholders.”
While the extended slump had thinned the ranks of the mining sector, it had left a more committed core of champions and practitioners, who were taking projects forward despite the challenges.
In the junior mining sector, for instance, there seem to be more mining people directly involved who really want to start and operate mines, rather than just trading in the value of mineral properties.
Looking at the future of the established mining industry, Dixon argues that mines must harness the power of technology to improve profitability.
“Capturing the value from digital innovations represents a fundamental shift in vision, strategy, operating model and capabilities in the mining industry,” he says. “In particular, much of the value creation in mining will shift from how well the operation moves material to how well it collects, analyses and acts on information to become more productive.”
Leveraging the experience of well-trained engineers to integrate the various disciplines in search of path-breaking innovations is also critical. These smarter approaches are already relevant to mines’ efforts to reduce energy consumption.
The mining industry is under pressure from an energy pricing regime that is running beyond inflation and the security of supply as other consumers are using up the reserve margins that were once plentiful. It can be countered by changing the philosophy of new mine designs and adapting existing mines to retrofit designs.
Many mining companies are also still stuck in ‘compliance mode’ when it comes to environmental concerns, sustainability and social governance – placing their long-term social licence to operate at risk.
In addition, important aspects of operation such as stakeholder engagement is frequently an ad hoc rather than a strategic function.
Many mines are consistently defensive about stakeholder relationships, insisting that relationships are good because there are no complaints.
