The Future of Mining Lies in Innovation
As the world grapples with continued efforts to curb climate change as well as dealing with rising nationalist sentiment and global trading pacts, one of the industries everyone is keeping an eye on is mining.
Over the last decade the global mining industry has been dealing with major upheavals as the global economy has slowed and commodity prices have plunged. Adding to the turmoil has been a shift from once dominant mining powers in the United States, Latin America and Europe to emerging industrial powers in developing countries. Around 75 percent of the earth’s remaining mineral resources are to be found under the soil of emerging economies, according to David Humphreys, author of “The Remaking of the Mining Industry.”
Global Growth Remains Stagnant
Until global growth can be reignited, the industry is facing continued stagnation and will have to rely on continued technical innovation to grow profit margins, Humphreys writes this month in Mining Journal.
“This rate of growth is possibly the single most important driver of mineral markets and most forecasters see future global growth as being well below the rate experienced during the boom years as the world struggles with the challenges of high debt and slowing trade,” Humphreys writes. “Five years ago, the IMF was projecting global growth in 2016 at 4.9%; its latest estimate is 3.1%. If the world cannot find a way of lifting its rate of growth, then this could prove to be a problem for the industry.”
Protectionism Threatens Mining Innovation
“The biggest story of our time, however, and perhaps the biggest challenge the industry must face in coming years is the rising tide of nationalism and protectionism,” Humphreys points out. “Geology does not respect national boundaries and the mining industry benefits hugely from an ability to move capital to wherever in the world it can best be employed. Globalization is in its DNA.
“Globalization, however, appears to be in retreat. This retreat has accelerated in the past two years…,” he writes.
Climate Change Regulations Are Driving Innovation
One major solution that many in the mining industry are embracing is innovation. The same technical revolutions seen in transportation and construction is affecting the mining industry, too. An important driver of this is global and national environmental regulations. The 2015 UN Climate Change Conference in Paris signaled that the pressures on the industry for the reduction of carbon will only increase with time.
One strategy involves a continued investment in innovation; from automation and enhanced drilling systems to fuel-saving technologies and data analytics. Companies embracing innovation are improving the mining industry while reducing people, capital, and energy intensity, a major study by Deloitte concluded earlier this year.
Miners Still in ‘Early Stage of Adoption Curve’
“Solutions once considered unviable or inapplicable to the industry continue to be adapted to suit the needs of mining companies,” Deloitte says in its report.
“Despite this dizzying array of technologies, many miners remain at the early stage of the adoption curve – placing a majority of their innovation focus on technological optimization of old techniques in a bid to reduce costs or discover deposits more efficiently,” the report continues.
That needs to change, too, the report stresses.
“To evolve, companies need to expand their innovation focus beyond technology to also consider new ways to configure and engage externally.”