TORONTO (miningweekly.com) – Cyclical behaviour and short-term focused shareholders had pushed a ‘switch to growth mode’ to the top of professional services firm EY's yearly ranking of business risks in mining and metals companies globally.
"A switch to growth mode, productivity improvement and access to capital are all critical risks for mining companies around the world – and Canadian companies are no different. But we have some additional risks that companies here can't afford to let fly under their radar.
“Increased transparency requirements – such as the Extractive Sector Transparency Measures Act which came into effect on June 1 – and a looming skills shortage are issues that should be top-of-mind for mining companies in Canada,” said EY Canadian mining and metals leader Bruce Sprague.
EY's latest report titled 'Business risks in mining and metals 2015 to 2016' noted that in Canada an estimated 40% of the workforce in the resource extraction sector was at least 50 years old and about 33% of those were expected to retire by 2022.
"These retirements would impact operational continuity and lead to a great loss of organisational know-how and operational experience for mining companies," Sprague argued, noting that it was a big issue that companies needed to address.
“Strong talent management programmes that focus on retaining the right people for today's challenges will be as critical to the future success of mining companies as investment in exploration."
According to the report, the top ten business risks for mining and metals companies today, compared with the top ten in EY's 2008 report at the peak of the super-cycle, provided a stark contrast to the issues faced now and then, and underlined the cyclical nature of the sector. Only three of the top-ten risks from 2008 ranked in this year's top ten.
"A focus on regaining lost productivity has led to a serious lack of innovation in the sector, which pushed it into our top-ten risks this year. There's a lot of room for improvement when it comes to innovation. It's no secret that compared with most other industries, there has been minimal transformational innovation in the mining sector.
“That's something companies across the board really need to prioritise if they're to thrive into the future,” Sprague emphasised.