Article by Fred Cawood on Bizcommunity.com
Mining’s immediate future is to be impacted not just by economic cycles or established trends, but by structural issues demanding urgent and deep innovation.
Mining remains a significant sector in the global economy, but there are several significant issues facing the industry at the end of 2020. Most of these are either cyclical or part of an established trend, and require learning from the past and the application of limited innovation. These include how the sector is dealing with resource nationalism and the spread of infectious diseases like Covid-19. Other issues, however, are structural – such as the sector’s response to automation and climate change – and demand deeper levels of innovation.
Not all issues have underlying trends that lead to predictable futures. In fact, it is sometimes not possible to influence the trend because the issue is mostly outside the control of the mining sector; examples include poverty, macroeconomic uncertainty and global trade wars.
Within the control of the sector
Among the key trends and issues that are mostly within the control of the mining sector are the world’s continued demand for minerals, the derisking of supply chains, and increased competition for scarce capital – as well as resource management and compliance. These trends are listed below, along with the related issues that the sector will be confronting in 2021.
- The world needs more minerals
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- Search for (new) 21st century mineral products
- Remote mining
- Mining at extreme depths
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- Derisking of supply chains
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- Diversified and global mineral supply and demand pipelines
- Infrastructure bottlenecks
- Production disruption
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- Increased competition for scarce capital
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- Partnerships and joint ventures contributing to return on capital
- High capital and insurance costs
- Better pricing arrangements
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- Value-add asset and resources management
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- Mine modernisation to achieve better mine plan certainty
- Balance between regulations and change management needs
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- More compliance reporting requirements
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- Governance and regulatory non-compliance a critical risk
- Sustainable development goals becoming a form of ‘soft’ international law
- Local content adoption and shared value approach to mining
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© Minserv For more information contact: fred@minservcc.com