The economics advisory practice’s 2015 Tracking the Trends report outlines the areas it believes to contain the top issues facing miners in the year ahead and ways these can be overcome.
Agility and innovation feature prominently as companies face challenging market conditions moving forward in 2015, while consolidation of resources and operations are also considered key.
Deloitte’s 2015 recommendations
According to the report, companies will need to shift their thinking from the traditional to adapt to changing industry dynamics over the coming year.
Innovative and culturally embracive approaches to operational processes and non-traditional energy generation are encouraged to consolidate costs and increase productivity.
In general, companies are advised to overcome the traditionally conservative approach of years gone by in favour of “embedding innovation into corporate DNA”
In other areas, Deloitte recommends seeking a better balance between short-term investor expectations and project pipelines in the face of dwindling pipelines.
Diversity is encouraged in terms of recruitment, as companies seek new skillsets to progress their operations, as are systems to manage talent.
In the face of market conditions, the survival of junior miners is considered a challenge in the year ahead, and Deloitte recommends these companies consider joint venture, sale and consolidation offers and get their assets in order.
With traditional financing agreements may be limited, foreign investors, resource pooling and other arrangements could provide an alternative for those juniors seeking funds.
In relation to their external operations, miners are encouraged to respond geopolitical uncertainty by requesting policy clarity and being conscious of potential risks, as well as working to build better government relationships and helping to set the political agenda.
Finally, Deloitte recommends embracing new communicative technologies, including social media, to generate increasingly important stakeholder engagement.
Deloitte national mining leader Nicki Ivory said the report aimed to guide Australian miners through a turbulent period.
“No one in the Australian mining sector needs to be told that they operate in a complex environment, or that the imperative is to adapt to changing market conditions and produce more for less cost,” she said.
“But in a world where volatility has become the norm, the key to the future success for Australian miners still lies in driving operational excellence via cost containment and productivity, and truly embracing innovation and technology.
“With commodity prices where they are, sustainable productivity improvements and a relentless focus on cost management remain critical and achieving sustainable operational excellence requires both a long-term commitment and a willingness to embrace new cultural norms.”
