Continuing our focus on PwC today we sit down with PwC’s future in sight series, as We need to talk about the future of mining.
Is mining really ready for the future?
The question that PwC asks, and one that almost everybody across the global mining industry is asking, is the industry ready for the future?
What do we even know about the future?
The mining industry has something of a reputation, one that suggests it is lagging in the embracing of innovation and technologies. Stuck in the past. Sticking with what worked before.
PwC posits that in actual fact, “miners can no longer ignore the role they play in a much larger economic, social and technological ecosystem.”
Technology, through its very nature, plays the role of the disruptor. A buzzword at the moment is automation and robotics. But there’s also technology in the form of blockchain, data analytics and IoT to consider.
“Have mining companies really thought broadly enough about what the future might hold for their businesses, and what they could be doing now to make sure they profit from it?”
Turn and face the change
Technology of course is a major enabler of the future of mining operations, but it is also a major impact on the market for mining outputs, at a pace that some companies may struggle to respond.
Smartphones, tablets, batteries, these are all in increasing demand and this has seen shares in lothium miners and rare earths “skyrocket”.
All the while coal is seemingly struggling along at historic lows.
This is a change, quite literally, from the ground up with regards to the historic foundations of the competitive foundations that the industry has been built on.
Four possible futures for mining
PwC brought together specialists from across its global network and industry to explore how the sector will be affected by the powerful dynamics reshaping not only mining but also the global economy and broader ecosystem that miners operate in.
“We came up with four scenarios that give an insight into the types of challenges and opportunities miners (and indeed today’s non-miners) might need to deal with, and what they can do to win. We explore not only the kinds of strategies required but the shift in mindset needed to make those strategies work.”
Trust in the mining sector has all but evaporated. The privelege to operate is no longer an enduring right but a tenuous permission slip that can be withdrawn at any time by a range of “regulatory guardians.” This will leave the positive savvy operators free to prosper, safe in the knowledge of sustainable development and understanding of the need for mutual outcomes.
Prepare: Innovation is a team sport; build collaboration across your ecosystem. Invest in becoming a partner of choice, understand what your mining company brings to the table and where there are gaps. Build productive relationships with mining regulators and policy influencers.
2. Non-miners in ascendancy
This scenario sees miners losing trust and no longer being able to control their privilege to mine. With time, attention and capital spent on responding, this leaves room for new entrants to thrive.
Prepare: Evaluate your capacity and hunger for rapid adaptation. Think like a venture capitalist – look for the next big idea that will make a difference. Manage brand risk and improve transparency along your supply chain. If a new entrant, identify the specialist capabilities that could change the face of mining.
Trust is high but new entrants are few. The high cost of earning trust, combined with limited access to outside capital or new ideas, favours the rich or the very innovative. Mid-tier players leverage their agilitiy and low cost of doing business to specialise in smaller, niche product operations to survive.
Prepare: All miners will need to collaborate more to ensure good standards of stewardship in all mines. Build a more constructive and effective culture that rewards collaboration and encourages people to work together. Invest in community outreach and engagement.
Miners have radically reinvented themselves. They’ve opened doors, smartened up their act and renewed trust with the public and regulators. New entrants have led to an explosion of fresh ideas, technologies and techniques, and capital. This is a dreamboat situation, a transparent, diverse and highly competitive future.
Prepare: Incubate game-changing technology and innovation that aligns with overall business strategies. Change your culture to reward innovation and disruption. Focus on the links between mining outputs and their final use; consider end consumer preferences and demands to build product differentiation.