The global and local drive towards a low carbon future and mining’s evolving world of work are among the top trends ahead for Australian miners in 2022, Deloitte’s Tracking the Trends report reveals.
The 14th annual edition of the report explores the key trends facing mining companies as innovation accelerates driven by the need to meet decarbonisation, environmental, societal, and governance (ESG) goals.
Deloitte Australia Mining & Metals Leader Steven Walsh said the sector was facing one of the most transformative times in its history.
“The level of change and innovation we are seeing across the mining industry is accelerating. This change is being pushed by the demands and expectations of stakeholders across environment, society and governance, and is being pulled by the pandemic-driven adoption of new ways of work,” he said.
“The industry is embracing real opportunities to redefine itself, and to do so faster than many would have predicted a few years ago. Those that succeed in adapting and innovating will position themselves to lead a Mining industry in a new energy future and leave a positive social impact in their wake.
“The core objective of Mining —providing metals and minerals to downstream sectors for all of the myriad uses in society—will still hold in a low-carbon future, but the energy transition absolutely presents a rare opportunity for leaders to reorganise, generate new value, and forge partnerships to create a more responsible and attractive future for the industry.
“The way in which Mining organisations position themselves today in preparation for this more sustainable future could redefine competitive advantage over the next decade.”
Walsh said operators also needed to consider current and emerging work-related trends and technologies, and how people will interact with them, to have any chance of realising their full human capital potential.
“As new technologies are introduced, new roles with different skillsets are emerging, and traditional ways of working continue to be challenged. Mining organisations are redefining the importance and value of their people, and those who are most successful will adapt to and build on concepts such as remote working, flexible work arrangements and workforce wellbeing.”
The ten key trends for 2022:
- Aligning capital allocation to ESG: While much of the focus today is on climate change and decarbonisation, companies should think holistically and ensure their capital-allocation decisions reflect their ESG commitments.
- Reshaping traditional value chains: The energy transition is reshaping the traditional mining value chain, creating new challenges and opportunities for miners.
- Operating in the post-COVID regulatory and tax environment: With commodity prices soaring in 2021, many countries are looking to regulations and resource nationalism to recoup lost revenue during COVID-19. Companies should learn how to operate in this new environment by demonstrating their value beyond tax – including their ESG efforts – to governments.
- Embedding ESG into organisations: Operators should be functionally set up to respond to and address ESG-related opportunities, challenges, and risks, creating operating models to support their ESG commitments, and providing a structure for achieving their goals and a way to demonstrate how they are honouring their commitments.
- Evolving mining’s world of work: For several decades, miners have found themselves starved of talent, but COVID-19, among other issues, has intensified this challenge. Facing this increasingly competitive labour market requires companies to position themselves as an attractive sector and employer, capable of meeting evolving priorities.
- Establishing a new paradigm for Indigenous relations: Indigenous communities, including in Australia, are demanding a new type of understanding and connection with mining and metals companies that participate in their environment.
- Continuing the journey toward innovation-led organisations: While the need for innovation has long been a key trend in mining, a number of recent factors should motivate organisations to intensify their efforts.
- Unlocking value through integrated operations: Operators should make better use of digital transformation to drive effective integrated decision-making – more important than ever as the heightened focus on ESG measures places pressure on companies to manage not only their operational environment, but also social and regulatory challenges.
- Closing the Information Technology (IT)- Operating Technology (OT) vulnerability gap: Mining companies’ cybersecurity has traditionally focused on functions like finance or human resources rather than on the ground at mine sites. However, with more devices being connected, some of the biggest cyber vulnerabilities are around operational technology, industrial control systems, and sensors.
- Preparing operations for a changing climate: Mitigation is only one piece of the puzzle when it comes to climate change. Mining companies should prepare for the physical impacts a changing climate can produce across their businesses and operations as well as beyond their own sites.