The four year anniversary for the Global Financial Crisis (GFC) is quickly approaching. Even though the metal mining industry recovered quickly, the improvements for many other industries and regions has come about much more slowly if at all.
Those that implemented fiscally conservative measures early (Canada, England, Germany, etc.) are better prepared. The recovery for those that took a wait-and-see approach may not arrive for a long time. As leaders in the Eurozone try to prevent their economy from unraveling, the situation of Too Big to Fail is quickly becoming Too Big to Bail. U.S. financial markets have recovered (on paper), but unemployment remains high and election year politics will prevent any meaningful decisions from being made. Meanwhile, China has been implementing measures to keep its economy from overheating.
Today, a stark contrast exists between the haves and the have not’s. Australia, Canada and Chile are prime examples. These countries are blessed with abundant natural resources and they have the ability to harvest and export them. The government encourages investment in the mining sector and works with the mining companies to provide a platform on which they can compete: fair regulatory environment, healthy infrastructure and security. Americans tend to joke about their neighbors to the north, not realizing Canadians have been fiscally responsible while creating jobs in the natural resources sector at home and abroad at the same time. In reality, many nations, including the U.S., could learn how to better manage natural resources from these countries.
Four years is a mere blip on the mining timeline. Metal prices did suffer a setback in the 2008-2009 timeframe, but nothing near the cyclic downturns miners endured in the early 1980s, 1990s and 2000s. Some miners did not survive. And, after each of those periods, there was a respective surge in growth. Is the industry prepared for a protracted recovery? If it is struggling with headwinds, such as manpower and energy, now, how will it cope with the next bull run?
The answers lie in technology, training, communications and leadership. This edition of E&MJ carries two stories (Maintenance, p. 48 and Logistics, p. 32) that discuss how the industry is using technology to improve operations. In many cases, technology frees manpower in one area to be deployed in another. As the author of the maintenance article concludes, mining companies can invest as much money as they want in equipment and technology, but it’s useless unless the miners are trained on how to use it correctly. Worse, a safety mishap could be a major setback for a mining operation.
Mining companies rely heavily on reputation. The best miners want to work for the best mining companies. Investors want to hold shares in leading mining companies, not losers. Surrounding communities are more receptive and often take great pride when the local mining company is viewed as a leader. Usually the forces that oppose mining or progress in general hail from wealthy regions nowhere near the mine. Their influence can be diminished if the mine has solid local support.
Great mining companies communicate well. Many mines have exemplary safety performance and very strong environmental track records. How many people know about the benefits of working with or for your mining company? That story should not go untold.