This Time It's Different
The Australian Financial Review (AFR) had an article this week, stating that the mining boom is back as mining companies report record profits. This also seemed to be the sentiment at last week’s IMARC conference in Melbourne. Almost everyone I spoke too was seeing a pick up in business and comments like “the cheque books are open again’ were common.
The AFR article went on to point out that the pick-up had not necessarily translated into rising employment – and may not do so. It was also clear in the presentations and workshops at IMARC that the next boom phase will be unlike anything we have seen before.
This next iteration of the cycle will be very different and three mega-trends will inform investment and impact on success. Resilient companies have survived the slump by squeezing the very last blood from the stone of the current way of mining. Future growth and profitability will be built around highly integrated operations that leverage these three trends:
- Digitisation and robotics. We are now past the tipping point where a human worker is the first choice in terms of capacity to systems think and optimise, diagnose problems, and carry out tasks safely and productively. Ubiquitous smart sensing, AI, robotics and autonomy combine to create a powerful new operating model. The ‘Mine of the Future’ is no longer a speculative thought piece – it is happening now.
- Social License to Operate. There’s no hiding anymore. What used to be a local issue can become global overnight. At IMARC, I saw an AI platform that scrutinises the entire internet to quantify opinion on specific projects. This has profound implications for companies, investors and governments. Environmental, native title and community issues will be as important as the grade of ore in assessing project viability going forward.
- Externalisation of innovation. In the past, the key to success was to build your own IP and protect it rabidly. Apple and others have shown that creating an ecosystem of innovation around your core business can lead to extraordinary returns. I picked up at IMARC that there is a new spirit of collaboration and externalisation sweeping through our industry where ‘not invented here’ is consigned to the history books. There is, of course, still a major role for internal R&D - but if it’s not hooked into a vibrant ecosystem of innovation it’s probably only going to deliver yesterday’s solution.
Of course, many other factors will combine to deliver success and there’s no simple formula. What is becoming clear however, is that the industry players who embrace and facilitate leveraging these trends will be the principal beneficiaries of the next growth cycle.