The mining industry has been rocked recently by massive asset write-downs and major declines in profit at some of its largest companies. So how does the
mining industry improve its performance going forward and avoid these pitfalls?
Last November, Deloitte published its fifth annual mining report, which tracks industry trends and identifies the pressing issues facing the global mining
sector, as well as responses companies can adopt.
I highlight the following:
• Higher costs: zero in on cost drivers, automate and improve asset efficiency.
• Capital projects: make disciplined investment decisions through project rationalization and improved capital efficiency.
• M&A activity: engage in more comprehensive due diligence to assess potential partners and plan integration in advance.
• Resource nationalism: work to strengthen relationships with national governments, diversify commodity mix and geographic areas of focus, and demonstrate
the industry’s value to local governments and citizens.
• Responsible behaviour: set a higher standard for behaviour by embedding sustainability into the approach to capital projects, as well as into the
negotiations with local stakeholders.
Many would say that these are simply common sense, back-to-basics approaches for addressing the challenges before us. Strong focused action is required,
CIM, through its position as the premier technical society for mining industry professionals, is ideally placed to support both our corporate and
individual members as they navigate these turbulent times. Every one of the challenges cited above is being addressed by CIM, either through the societies
and branches, technical meetings, courses or publications.
A recent example is the establishment of the CIM-supported Global Mining Standards and Guidelines Group, bringing together some 80 companies and major
equipment manufacturers to establish standards that cover diverse areas, including asset management and operations; onboard data and access; safety and
risk management; and underground mining.
All of us at CIM must ensure that the institute continues to focus on today’s challenges. Often shareholders and the financial press look to CEOs to
provide some miraculous cure to industry challenges, however, experience has shown that mining professionals – who are the backbone of the industry – have
a significant role to play. CIM is here to ensure they do.
Terence Bowles, CIM President