Trust, collaboration and technology have emerged as key themes as analysts examine the risks and opportunities facing the mining sector in 2021.
While consultants Deloitte, EY, and KPMG differ in how they rank their top 10 issues they all agree on the three broad themes.
Deloitte’s top business risk for mining companies in 2021 was the imperative to build resilience amid volatility.
It is no surprise that the COVID-19 pandemic directly contributed to one of the most volatile years for the industry in recent memory.
According to Deloitte’s Tracking the trends 2021 report, building a resilient organisation able to withstand volatility involves embracing scenario planning as part of strategic planning.
EY’s Top ten business risks and opportunities for mining and metals in 2021 said license to operate was significantly linked with a company’s ability to manage high-impact risk.
“The experience of the pandemic has heightened stakeholder expectations around how enterprises prepare for, manage and monitor all high-impact risk exposures,” the report said.
Deloitte said that the severity of the pandemic and the level of collaboration within and between countries could affect the future for mining companies, but that trust was a major means of overcoming the inherent uncertainties.
“In many ways, an effective recovery hinges not only on citizens’ ability to trust in their employers’ leadership, but also on the trust of investors to deploy capital,” Deloitte said.
EY had social license entrenched as the top risk and opportunity for miners in 2021.
“We expect the issue to become even more important as stakeholders broaden and develop a stronger voice,” EY said.
“Miners will need to work with governments and sector associations to help shape the messaging of the societal contribution and value derived from the mining sector.”
KPMG also found social license and community sentiment to be growing risks.
“An emerging risk is community sentiment, potentially exacerbated by global civil rights protests,” KPMG’s Australian mining risk forecast 2020-21 said.
“This may have greater implications for diversity in employment; traditional owner acknowledgement, and heritage protection, where community expectation may be broader than what regulation requires.”
The International Council on Mining and Metals (ICMM) said that building strong relationships based on trust and respect with communities is an imperative for responsible mining companies.
“Obtaining and maintaining community support, or a company’s social licence to operate, is a key factor for the viability of any operation,” the ICMM said.
“ICMM expects mining and metals companies to not only engage such communities in conversation and decision-making, but to contribute to long-term community development.”
Deloitte’s report mirrored this belief.
“Regaining social trust requires a collective effort. Miners should seek to create long-term socioeconomic benefits in communities.” the report said.
The ICMM said community development projects that support the upskilling or capacity-building of local people through training, employment and education is often the most sustainable and beneficial.
BHP recently renewed its partnership with the State Government for the delivery of a public education program in regional WA.
The $6.6 million partnership is split into two focus areas: one which aims to better prepare children from birth to eight years old for starting school and will monitor children in the Pilbara to ensure they are achieving developmental milestones to be successful learners; and one which provides students with clear pathways from primary to secondary school and into training, further study and employment.
BHP Western Australia Iron Ore Asset President Brandon Craig said: “We believe that young people living in the Pilbara should have access to the highest quality of education and support services.
“It will help set up children for the best possible start to school, and young people will graduate with important job-ready skills and the ability to take advantage of the rewarding employment opportunities across the Pilbara.”
Fire Tech Australia’s STEM UnitED program, supported by the WA Mining Club, RUC, and Platform Communications, also works to ignite interest in young Western Australians for STEM careers, including mining.
Decarbonisation and the green agenda were also a recurring trend across the reports, with climate change and natural disasters representing the number one risk to miners in KPMG’s risk forecast.
“Whilst in previous years environmental risk has been captured in social licence to operate risk, the survey outcomes indicate that addressing climate change risk is now viewed, but Australian-based miners, as a far broader imperative,” KPMG said.
A focus on the shift toward digitalisation to increase health, safety, and productivity was common across the reports.
Deloitte Australia Consulting partner Steven Walsh said the mining industry has “a bigger opportunity than most to tailor and redesign their workplaces so that technology and organisational change can empower the future organisation, rather than restricting it.
“For large parts of a mining organisation there is a significant and increasing flexibility in where, when, and how their work gets done, if we challenge how humans can interact with technology and each other.”