From here to where? The Mining Matrix

From here to where? The Mining Matrix

Mining is the Australian heritage. It’s the backbone of the Australian and West Australian economic and societal landscape, and yet for the past decade the image of mining has been in decline.

Stock price underperformance relative to other stocks, fractious community relations, legacies of weak environmental practices, and a historical lack of workforce diversity have all tarnished the reputation of the mining industry.

So what needs to happen to improve the image of mining, but also to maintain the focus on growth and increased productivity? The answer involves a combination of the top four trends in the Deloitte 10th annual Tracking the Trends report released earlier this year: innovation; digital transformation; the Future of Work; and the Image of Mining.

We refer to the interconnectivity between these four as the “Mining Matrix”.

How do the four trends interconnect?

  • Innovation: The mining sector is embracing technological innovation, but Deloitte research across Canada, Australia, Africa, and Latin America shows the sector still lacks systemic consistency and strategic focus when it comes to innovation. Innovation includes the adoption of different approaches to engaging stakeholders, re-envisioning the Future of Work, and identifying the commodities that will be in greatest demand in the future, while continuing to push the boundaries harder from a digital perspective.

The need to demonstrate near-term returns combined with a traditionally risk-averse culture that does not foster collaboration can hinder efforts to innovate within the industry.

  • Digital transformation: While the majors have been investing in automation and technology innovation for several years, we are now seeing the digital agenda moving into the domain of the broader mining industry. Rapid advances in technology, along with decreasing costs overall, have meant that harnessing the power of digital has become more practical and achievable – to the extent it is now becoming an imperative for other industry players.

Mining companies must embed digital thinking into the heart of business strategy and practices to transform the way corporate decisions are made.

The Future of Work: The nature of work is poised to change dramatically, at both the mine site and in the back office, driven by technological and social trends affecting every industry across the globe. In mining, there have been significant strides over the past five years in areas such as automated equipment, remote operations centres, robotic process automation, and the creation of new organisational operating models that deliver greater agility and flexibility. However, until the industry redefines the way work is done and delivered, many across the industry automating processes will not necessarily reap the rewards in a fundamentally different way to drive greater productivity.

New talent models are also following suit. As we move toward greater automation of roles across the mining sector, this has the potential to impact the social licence to operate for mining organisations and the reputation of the broader industry.

  • The image of mining: Negative perceptions can do more than damage reputations and affect stock prices. They can also spill over into the community and result in the loss of a social licence to operate. This mandates mining companies to take proactive steps to address, and change, their reputations.

The industry’s negative image results in young people eschewing pursuing a career in mining; to attract young people and different skillsets the industry must collaborate and do things differently.

The sector has the opportunity to reframe the conversation across society on the importance of mining. Not only the economic importance to Australia, but also the daily importance to a society which depends heavily on products that would not exist without mining, from smartphones to bridges, health technology and electric vehicles.

In order to turn around the image of mining, we need to educate, communicate and collaborate across

the entire ecosystem of government, educators, the community, employees, customers, shareholders and other stakeholders.

We need to communicate clearly the extent of innovation across the mining industry in Australia,

the value that digital disruption is already delivering in the sector, and the positive impact of the Future of Work on roles and jobs across the mining value chain.

We need to educate society of the value that the industry delivers, and what more it can deliver in the future; we need to educate our potential employees of the future – the young students of today – in what the industry can offer; and we need to educate ourselves on their desires, needs and wants.

As a mining industry we need to collaborate more in areas of critical importance across the industry – areas such as skills/reskilling; the image of our sector; development of IP to bring about positive step change for the industry; maintaining and enhancing our social licence to operate.

Nicki Ivory is a financial advisory partner at Deloitte and the firm’s Western Australian mining leader