The sun rises and sets for different industries, sometimes at the same time. Miners are facing this same challenge.
It is doubtful that mining is anywhere close to be a so-called Sunset Industry; ultimately, everything that we can touch is either grown or mined. And with the discovery of Tier 1 ore-bodies (the Holy Grails for mining) becoming increasingly infrequent, the old ways of mining are, definitely, in their twilight years.
Instead, the miners that will survive decades from now are those that understand and adapt to a few key trends.
First amongst these is digitisation. There is untold value locked up in miners archives, databases, and equipment. From inefficient asset allocation, to resource scheduling, to optimised processing – the application of digital technologies will create disruptive efficiency gains for those operators capable of harnessing them. The global consulting McKinsey has estimated value in excess of $1t associated with digitisation in mining; but to whom will these spoils go?
Secondly, transparency and social engagement will determine miner’s social license to operate, in a far more rigorous and contested way than previously. As ore bodies are discovered in more remote locations, in newly industrialising or developing countries, the standards to which they are held will, over time, become more and more stringent. Firms that operate with excellent track records in human rights, social development and environmental performance will, over time, outcompete those who do not.
And lastly, moving completely beyond traditional mining over time, into new and exceedingly extreme conditions. Ultra-deep, oceanic, arctic, fully remote – even non-terrestrial – all of these locations will be increasingly attractive as easier-to-mine resources are depleted, and new ore opportunities must be found elsewhere.
Even in as much that mining is a long term game, some of these elements are even longer. And the organisational change that is required to adapt effectively is, also, a long term process.
Those firms that are able to re-imagine themselves as digital, socially relevant explorers of the world will triumph; but the rest shall go gently into the night.