Top 5 changes to the mining industry expected to occur in 2014
Deloitte has put together a list of 10 trends it anticipates for the mining industry in the year ahead. The market is now demanding change and mining companies must adjust the way they operate in order to cope. Operations in Australia and globally will continue to face challenging market conditions in 2014 such as rising costs, low commodity prices, imbalances between supply and demand as well as a decline in productivity. The blog today discusses 5 of the most pressing and challenging trends the mining industry is expected to face in the coming year, as suggested by Deloitte.
1. Productivity will decrease
An increase in operational costs including production, labour, equipment and regulatory costs are affecting the bottom line for mining companies. In order to overcome this emerging trend, mining companies are required to go beyond traditional cost cutting measures and instead revaluate their entire operational models, cost structures and company culture. Rising production costs have been stifling productivity and long term cost reduction must be at the forefront of mining companies’ strategies for 2014. New technology such as automation, identification of trends from analytics, rationalising supply chains and transitioning to modular plants and projects are a few of the strategies which can aid in continual improvements to decrease in cost production and increase in overall productivity.
2. Funding cracks will widen
Funding will continue to be a competitive battle for mining companies with debt financing remaining tight across the global markets throughout the year. Due to tougher economic times within Australia, funding will continue to dry up. This will impact juniors and may increase acquisition opportunities for mining companies with large cash holdings.
3. The intensity of local community strains will increase
Communities residing close to mining affected areas are increasingly voicing concerns and requesting a certain level of interaction and transparency from mining corporations. It is therefore becoming increasingly important for mining companies to engage in decent corporate citizenship in order for a smoothing working relationship between the company and the community. Strategies to overcome this situation include hiring locally, open days, community drives and events.
4. A focus on safety will increase
Fatalities within the mining industry remain high. In 2014 companies should re-assess their workplace safety practices to ensure safety incident patterns are acknowledged and refined.
5. The talent shortage gap will widen
Talent shortages will remain an issue within the mining industry. This will remain the case from entry level to executive positions as the workforce ages. New talent management strategies must be introduced in order to bridge the gap. Areas such as standardized systems, embracing new training environments need focus and necessary steps must be taken to attract skilled management.
Can you think of any other emerging trends, which may affect the mining industry to add to the list?
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