CIM Convention plenary digs deep into what makes leaders succeed

2013-05-07
CIM Convention 2013 plenary

The wide-ranging, thoughtful and candid discussion in this year’s signature plenary session touched on the struggles leaders face today, which include skittish investors and a sometimes antagonistic public. Based on the remarks and on the pedigrees of the influential speakers involved, strong leaders require courage, self-confidence and an overarching optimism.

CBC journalist Mark Kelley moderated the session, which, for the first time, was streamed live. More than 110 people participated in the online event, from as far away as Morocco and Uganda. Back in Toronto, empty seats were sparse as over 600 delegates and attendees packed the room. Tom Rannelli, 2013 Convention co-chair, announced at the onset that this year’s convention set a Toronto attendance record.

Richard Ross, program director for MBA Global Mining Management at the Schulich School of Business, listed off the names of CEOs who had lost their jobs in the last year, along with many recent multi-billion dollar writedowns. He said three key systemic forces are behind the problems facing the industry today: the increased influence that grassroots organizations have; the tyranny of short-term thinking from institutional investors; and management teams ill-prepared to deal with the growing complexity associated with developing projects. “In my view, I think these three factors have reached a tipping point,” he said. “Unless we acknowledge and understand what’s going on in society, we’re not really going to be able to equip the next generation of leaders with the right skills to take on these challenges, because they’re not going away.”

“We are clearly operating in a time of uncertainty,” said Zoe Yujnovich, Iron Ore Company of Canada CEO, adding that the pace of change in the industry is increasing. “The way we operate needs to be sustainable and position us for success through the volatility that we see through the market.”

She also said it takes energy and patience to make decisions proactively, and not reactively, by referencing forward-looking indicators and external markets instead of acting on what the company has done in the past.

Stan Bharti, Forbes & Manhattan founder, said reactive decision-making is not new. “When I was working at Falconbridge, nickel prices would go up and we’d start all the projects and they’d come down and we’d stop them,” he said, adding there is money to be made today by acquiring projects that have already sunk money into an asset. “If you look at returns that people have made, they’ve made them on existing mines,” he pointed out.

Bharti provided some lessons for smaller companies: do not undercapitalize assets and avoid debt unless you have two or three consistent years of cash flow.

Egizio Bianchini, capital markets vice-chair and global co-head of BMO’s global metals and mining group, spoke about optimism and seeing the real upside in risk-reward decisions. “Where we fail, I think, is in really understanding the upside, because we’re all very good at assessing the downside,” he said. “Once we have a really good picture of what the upside is, it’s a lot easier to decide whether I want to take this risk.”

Chris Lewicki, president of Planetary Resources, certainly sees the upside of his endeavours, as he works to get investors and the mining industry to take near-Earth asteroid mining seriously. “We’re not replacing mining on Earth, we’re extending it to new frontiers,” he said.

“Every new idea is a crazy idea until it becomes routine,” said Lewicki. “Nine out of 10 of you in this room think this is a totally crazy idea, but there is one of you that sees this as a possibility and the obvious next step.” It turns out, Lewicki was sitting right next to one such person, as Stan Bharti later spoke about the potential of getting in on space mining early. “Forbes & Manhattan will buy some asteroids,” he said.

One of the biggest difficulties discussed during the session was how to improve the public’s perception of mining. “Nobody in this room wakes up in the morning and says, ‘How am I going to screw the environment? How am I going to screw this community?’” said Bianchini. “We need to send that message out that we’re not the bad guys. We have done a poor job at getting that out, not just in Canada, but around the world.”

Tony Clement, FedNor minister, praised CIM’s Mining for Society (M4S) show for its work on educating kids about the mining industry and leading positive discussions about mining. “I want to commend you for doing that and keep doing more of it,” he said, during his opening remarks. “There’s so much misinformation and, quite frankly, ideological agendas that are trying to drag down the mining sector in a way that is completely unreasonable.”

Yujnovich said the best way to ensure mining has a positive benefit on society is to focus on the bottom line. “To be a resilient and sustainable company is what enables us to give back to the communities that we are operating in.”

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