Modern Mining March 2020

MINING TRENDS

Exploring global mining trends affecting African mines Deloitte Global’s mining report, Tracking the Trends , explores key trends facing mining companies in their quest for improved productivity, financial discipline, operational excel- lence and sustainable growth. Speaking to Munesu Shoko at Mining Indaba, Andrew Swart, Deloitte Global Mining and Metals leader, highlighted some of the key trends that are relevant to the African context and their implications to the local mining fraternity.

T he business of mining has never been easy, and as South Africa’s President Cyril Ramaphosa once put it, “mining is an industry that is not for sissies”. As an industry whose fate is tied to the cyclical nature of the commodity sector, mining companies often feel the pinch of sustained dips in the market, and only feel the relief when prospects pick up again. Although mining companies can’t entirely disentangle themselves from this cycle of boom and bust, increasing pro- ductivity and seeking ways to reduce their costs can provide some shield against the downward cycles of the market. In its Tracking the Trends report, Deloitte notes that in the face of these challenges, mining compa- nies have continued to make strides in recent years. Many are embracing intelligent mining through investments in automation and technology mod- ernisation. Some companies are addressing climate change and investor concerns through decarboni- sation and uncovering of new opportunities through joint ventures. Some mining companies are also revisiting their talent and diversity strategies, working to strengthen relationships with local communities, and seeking ways to create value beyond compliance:

deliver socio-economic impact while simultane- ously fostering operational efficiency and business competitiveness. Thanks to these efforts, many mining companies have been able to streamline their portfolios and cre- ate more robust balance sheets, putting them in a stronger position than in the last cycle to weather a potential downturn. However, there is still much work to be done as miners grapple with a host of external challenges, from an uncertain geopolitical landscape and technological disruption to increased demands from both communities and investors. Deloitte’s 12 th annual edition report features insights, strategies and forward-thinking ideas packaged as 10 major trends currently affecting the global mining industry. In a one-on-one with Modern Mining at the Investing in Africa Mining Indaba 2020, which took place in Cape Town from 3-6 February, Andrew Swart, Deloitte Global Mining and Metals leader, highlighted the five key trends that speak to the African mining sector at the moment and their implications to the continental mining market. The rise of the social investor The mining industry continues to face multiple com- plex challenges, and one of them is the increasing – and increasingly divergent – demands from investors, ecosystem partners, workers and impacted communities. Swart says the drive towards socially con- scious profit is no longer limited to environmental activists. Mining investors, he says, are demand- ing greater transparency around the true social, economic and environmental impact of mines. To help regain the investor trust, the Deloitte report suggests that “miners should embrace a commit- ment to value beyond compliance”. The report finds that investors have in recent years become more serious about min- ing company commitments to environmental remediation, energy efficiency, diversity, health & safety, as well as fair treatment of community stakeholders and employees. The trend toward what is termed “responsible investing” has seen individual investors and institutional asset

Andrew Swart, Deloitte Global Mining and Metals leader.

Increasing productivity and seeking ways to reduce costs can provide mines with some shield against the downward cycles of the market.

32  MODERN MINING  March 2020