To remain viable into the future, mining companies have to become more adept at balancing short-term investor expectations with long-term business imperatives, while dealing with challenging market conditions, including price volatility, geopolitical turmoil, rising costs, declining grades and a general lack of financing.

Professional services firm Deloitte Touche Tohmatsu Limited (DTTL) last week released a report, ‘Tracking the Trends 2015: The top 10 issues mining companies will face this year’, which highlighted that, to embrace the need for longer-term thinking, mining companies were getting back to the basics to clarify what they stood for, what they believed and what they planned to achieve in the long term.

“There is no doubt that mining companies operate in complex geographies where they face increasing challenges in responding to regulatory and compliance requirements. At the same time, they have an imperative to adapt to changing market conditions, adopting new innovations as they seek to produce more for less cost in a world where volatile market conditions are the new normal and geopolitical conditions are increasingly impacting on economic decision-making,” DTTL Canadian and global mining leader Philip Hopwood said.

In its seventh iteration, the report delved into the pressing trends facing the mining industry in the year ahead and aimed to offer strategies that companies could employ to adapt to changing industry dynamics.

The report found that the most significant trend among miners was to refocus operations back to basics in the pursuit of operational excellence. To heighten operational excellence, miners would have to rethink their traditional operational processes and consider their cultural approach to costs.
DTTL noted that innovation was the new key to survival, as survival depended on more than just cost control.

“Miners must overcome their traditionally conservative tendencies by embedding innovation into corporate DNA; thinking big, testing small and scaling fast; leveraging emerging technologies; becoming part of an innovation ecosystem and preparing for new operational realities,” the firm advised.

Also, embracing a new energy paradigm could help reduce project power costs. The report recommended that miners consider a new approach to energy, including the use of unconventional fossil fuels and gaining stakeholder buy-in for the development of renewable- energy facilities.

DTTL explained that dwindling project pipelines meant that to prevent the risk of future supply constraints, mining companies needed to find a better balance between meeting short-term investor and analyst expectations and maintaining project pipelines.