Mining opportunities and solutions 2020 onwards
Change and technological transformation is afoot in the mining industry, where the same practices that worked 10 years ago will not necessarily work beyond 2020. Miners throughout the world are looking to reduce costs, and are prioritising technology to drive growth, productivity, and sustainability.
In its Risks and Opportunities for Mining – Global Outlook 2020 report KPMG surveyed sixteen mining leaders from around the world, who revealed what the biggest opportunities were for growth in the sector from 2020.
Organic growth continued to occupy the number one spot in this year’s survey, and not surprisingly innovation and technological transformation climbed two spots, to number two on the opportunities and growth list.
There was a continued trend of technology no longer being viewed as a threat. Instead it was viewed as a key enabler to executing on growth strategy.
KPMG Global Head of Mining, Trevor Hart, said:
“Strong growth is expected to require developing technology that finds more ore bodies but enables extraction and processing in ways that are less disruptive to the environment.”
Respondents of the survey cited that there was a growing focus on environmental, social, and governance (ESG) measures.
“Seventy-five per cent of respondents to our survey say the industry needs to redefine success using a more holistic group of measures that include both shareholder and stakeholder values,” he said.
Attracting investors, Mr Hart said, was expected to require companies to consistently and continually demonstrate that mining is safe and focused on the world’s well-being, including reducing carbon emissions.
Merger and acquisition activity was also expected to continue to drive change in the gold mining sector.
“Overall, we are very optimistic about the future and significant opportunities are available for investors as the industry continues to facilitate dramatic advancements in the worlds’ standard of living.”
Outlook for Growth
Since last year, mining leaders themselves were less optimistic about their own organisation’s growth when asked about this, when compared to the previous year. Only 38% of respondents were more optimistic compared to 55% in 2019.
Respondents from Canada, and Australia and Brazil were more confident about their company’s future, while more respondents from the US were neutral or not confident about their company’s growth prospects.
Top strategies for growth included:
– Organic growth (that is exploration/development and capital investments as an example) – 63% of respondents
– Innovation and technological transformation (36%)
– Joint ventures and partnerships (29%)
– Mergers and acquisitions (28%)
– Strategic alliances with third parties (21%)
The percentages in the report reflected the number of respondents who selected the strategy in the top two strategies for growth. Source: KPMG.
Technology and disruption are viewed as the #2 strategy for achieving growth.
Top two growth strategies:
– Organic growth
According to the report, respondents identified organic growth through exploration and capital investment, together with innovation and technology transformation as the two most important strategic objectives to achieve growth for their organisation. Some 70% also said that today’s mining companies need to embrace new business models as the traditional public mining company model was becoming more difficult to maintain.
– Technology disruption
This year’s KPMG survey suggested a change in strategy was needed to be more productive and efficient to achieve longer-term sustainable growth, with technology transformation being significant to that.
Some 75% of respondents viewed technology disruption as an opportunity rather than a threat, with only one-third of respondents of the opinion that disruption would weaken or eliminate current industry leaders.
Interestingly, less than half of respondents thought their own organisations were active in disrupting the industry and KPMG said this indicated that more work was needed at the strategic level in companies and by boards and senior executives.
For more information,, read the full KMPG Risks and Opportunities for Mining – Global Outlook 2020 report here, along with a special KPMG Global Mining COVID-19 analysis.
In an upcoming article, we’ll explore how Universal Field Robots can assist with our robotics and automation solutions to drive productivity, safety and sustainability improvements.
