The future is bright for the global Natural Resources industry; we have seen advancements in innovative solutions and technology implementation. Companies are experiencing breakthroughs in Safe operations through big data, improvements in water management, material handling, and automation enablement. Miners and Oil and Gas producers are streamlining contractor engagement, improving project management, off siting technical support, and expanding their use of external "local" resources. We see new business models, financing solutions, talent management, and an employee engagement focus supported and enabled by adopting digital and analytics tools that help front-line decision-making.
These measures improve the operator's License to Operate and deliver ESG outcomes which enhance operational resilience. The Mining Industry is preparing now to meet the future challenges - the demands of the global economy in a decarbonized, connected, post-COVID-19 world with a new focus on electrification and production of electric vehicles.
Poised for continued recognition and growth, the mining industry in Australia is expected to hit gross revenues of some US$28.75 billion according to Hong Kong-based South China Morning Post;1 industry experts anticipate a global "mining boom," primarily driven by greater demand for copper (electrification) and iron ore (infrastructure) in China and mirrored in the United States.
Given the rising demand for renewable energy and other green technologies, new low-emission solutions are expected to see increased uptake in the next five years, translating to higher demand for lithium, nickel, and copper.2 Speaking to the Guardian in February, Daniel Major, an analyst at UBS, identified the increasing popularity of electric cars and clean energy3 as "the key megatrend for commodities," stimulating employment in mining in the years ahead.
Mining growth is also helping to drive4 job creation and foreign trade income in Russia, the world's second- largest platinum producer,5 and neighboring Kazakhstan, home to plentiful hydrocarbon resources and a flourishing fintech scene.
Here, we explore four trends accompanying the global mining boom.
1. Acknowledging the financial impact of carbon neutrality
To become more carbon-neutral, mining companies are accelerating the roll-out of renewables, expanding electrification programs, and driving operational efficiency. This is part of an increasing focus on highly innovative and cost-efficient methods in creating sustainability.
The consequences of not committing to a decarbonization agenda can be considerable. For instance, companies that did not honor obligations under the Task Force on Climate-Related Financial Disclosures were denied access to COVID-19-centered relief funds in Canada.6
Emissions intensity is something of a hot topic as well. In August last year, to support sustainable metal production, the London Metals Exchange announced plans to create a spot-trading platform for low- carbon aluminum.7 The platform aims to enable price discovery and trading of sustainably sourced aluminum, and later, other metals.
This is especially true of the mining industry, which is under pressure to become greener, cleaner, safer, and more productive.
As White and Case, a global legal firm, observes: "One of the most pervasive themes today is that mining brands and culture need to be B2C-friendly while remaining B2B-focused."8
In today's climate, integrating ESG into business value creation and management and operating models is critical to a business both doing the right thing and remaining profitable
2. Building success through socially sustainable outcomes
The Natural Resources industry can significantly positively impact local, regional, and national outcomes by reducing poverty and improving education, health, and diversity. Whether the focus is on sourcing parts, developing products for local suppliers, or delivering a sustainable product in a unique market, sustainability has a substantial impact on expanding mining solutions. Cooperation and close collaboration with all stakeholders, including indigenous societies, artisanal miners, local communities, regional and national governments, is essential in planning, growing, and maintaining safe, productive operations.
Dialogue and transformation leading to socially sustainable outcomes require organizations to adapt their practices and operations. As mining companies engage with their communities on the ground and other stakeholders, they can pool their thinking to forge transparent and traceable processes and foster supply chain assurance across borders.
To achieve the best possible results for everyone involved, mechanistic improvements must be paired with people-centric processes and engagement improvements. At Proudfoot, we've always believed that people lie at the core of a successful business; this hasn't changed.
3. Achieving zero-harm outcomes
For any mining project, weighing safety and environmental risks is essential. The potential losses — reputational, fiscal to talent — are too high a price and could destabilize growth and development.
Working differently and smarter is part of digitization, which means designing and implementing digital solutions to suit customers' needs. Apart from improved ESG and Safety regulations, data and technology are being leveraged to enhance safety and efficiencies across operations, whether traditional or semi-autonomous/autonomous.
The industry is adopting Integrated Planning Process (IPP) - planning across the operations from pit-to- port. These help to improve coordination and efficiencies while delivering zero fatality outcomes and prevent catastrophic events. After all, planned work is safe work, and safe work is productive work - planned work is 30 times less likely to result in an Accident or Incident than unplanned work, and unplanned work is ten times more expensive than planned work. Our partners can track safety and compliance issues in real-time with a Digital Integrated planning process, making operations and maintenance safer, seamless, more efficient, and sustainable.
A fair and legitimate mining industry supports local communities, improving working standards and protections at the mine, supporting secondary businesses, and increasing economic activity — in the long run, this is good for business too.
4.Tackling long-term supply chain disruption
Although COVID-19 created much of the supply chain disruption within mining, more recently, the focus has shifted back to prevailing trade tensions between the United States and China,9 as well as other trade tensions — many of which have not abated. These and other factors have resulted in a slower delivery of capital projects.
New tools that can assist with risk evaluation, rerouting around crises, and measuring economic, operational, and geopolitical insights, are helpful when managing supply chain disruption. In addition, more agile and trackable supply chains can be monitored through supply chain visibility tools that strengthen resilience and align with trade policies and embargoes — many companies are exploring blockchain for this purpose.
Finding alternative and broader sources of supply to reduce reliance on a limited number of vendors and exploring collaboration on supply chain hubs are also viable tactics for the mining sector to manage trade disruption.
Proudfoot, for example, has helped global organizations extract more value from their vendors, find alternative local suppliers' solutions, and create vendor/ supply chain risk strategies for any potential disruptions.
We understand that the Supply chain is not just Consumables, MRO parts but also services. We work with your suppliers and procurement group, implementing supplier development and rapid scouting through AI tools, such as the ones provided by our strategic partner, scoutbee.
A resilient supply chain is a must to attain success in supply chain flow. The resilient supply chain manages risks and speedily adjusts and recovers from unforeseen supply chain disruptions. If you can streamline your supply chain to deliver more, you can exceed sales targets and increase cash without sacrificing quality.
The future for mining
Compliant, collaborative, and timely delivery of capital projects will differentiate those in the mining industry that succeed. The demands of the ESG agenda will require that firms navigate local sustainability considerations and produce new ways of design and operations. In turn, this garners capital and stakeholder support, which is crucial to being a successful mining company. Bringing together heightened safety, efficiency, and innovation and adopting digital technologies will build the intelligent, integrated mining firm needed to tackle Industry 4.0.
Proudfoot works with our boots on the ground to design new and integrate existing systems to increase adoption, implement and accelerate operational and digital transformation through people when it comes to digital transformation.
After all, nothing moves until people move! Along with our leading worldwide technology partners, we jointly help our clients design their optimal operating models, implement a technology that is suited for the business and its long and short-term strategies, and develop and implement the multi-stakeholder engagement - from internal to external communities - to ensure everyone is engaged in the transformation from the start.
Mining firms of tomorrow will need to continue expanding & optimizing capabilities, including organizational and digital transformation, and better understand tools for strengthening risk management and supply chain management.
In doing so, we accelerate the going from digital-ready to digital-steady. To do that, and as an element to any digital transformation, we deploy a tactical blend of aerial and stakeholder mapping, change-readiness, and employee adoption to enable holistic transformation. This includes collaborative and systems-driven capabilities, results tracking, and full- fledged incentivized innovation.
"To achieve the best possible results for everyone involved, mechanistic improvements must be paired with people- centric processes and engagement improvements."