TORONTO (miningweekly.com) – 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) on Thursday 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 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.

Meanwhile, financing for projects had all but disappeared and its implications were reverberating across the market. While solutions appeared to be limited, juniors could be able to avert disaster by wooing foreign investors, pooling their resources, exploring alternative financing options and positioning for private equity, the firm suggested.

Further, the report cautioned junior companies to take steps to get their assets in order and consider options from partnership and joint ventures to sell and consolidate assets to best capitalise on shifting ownership patterns.

DTTL said shifting industry realities called for a new generation of talent. To attract new skills to the sector, companies would need to commit to diversity, explore new talent management systems, become better at recruiting talent in high demand and invest in more targeted training.

The report also urged miners dealing with geopolitical uncertainty to put response strategies in place, which included lobbying for greater policy clarity, leveraging mining associations to influence government policy, becoming more risk intelligent and planning for myriad scenarios.

Risks regarding stakeholder engagement had in recent times also become more ubiquitous and the report found that companies were struggling to balance competing interests.

“Companies should work to build win/win platforms, communicate in new ways, leverage the power of social media, work with mining associations to negotiate with local communities, improve their corporate giving practices and consult with affected community stakeholders to plan mine closures,” DTTL pointed out.

The report called on companies to find new ways of engaging and collaborating with governments. The firm outlined strategies to counter regulatory uncertainty, which included working to build better government relationships, becoming more vocal in industry associations and through social media, measuring social impact, helping set the policy agenda and better leveraging mobile technologies.