Price Change or Real Change?

As commodity prices climb there is a sense of optimism ahead of Diggers & Dealers this year.  Rather than self-congratulating, the mining industry needs to ask itself – have we really changed?

In some aspects the answer is clearly yes.  Unprofitable assets have been switched off, those that have survived have done well to shore up their balance sheets and the industry’s approach to exploration is more pragmatic and disciplined than a few years ago.

Despite these improvements we have still failed to improve in the two areas that would add the most value to the industry; continuous innovation in operations and engaging and communicating with all stakeholders.

When it comes to resolving these issues the industry is stuck in a perfect catch-22 – when prices are low we can’t afford to address these issues, when prices are high we don’t need to.

Innovation in Operations

The mining industry has undoubtedly been forced to innovate over the past few years.  However, in my view this innovation has been predominantly financial.  To improve safety, lower costs and increase production – the big three for continuous innovation in operations – we must change the way we think about people at work, their contributions and how to harness these contributions efficiently and effectively.

Continuous innovation in operations comes from those with the intrinsic knowledge of operations, whose ideas, when well evaluated and applied have a real impact on the organisation.  This requires an effective line of communication from upper management to the front line.  Too often ideas from the front line are lost due to unnecessary layers of bureaucracy that hinders the transfer of accurate information.

In most cases structural change and cost cutting takes time and often by the time this change is fully realised, the opportunities to really improve operations are lost.

Engaging Stakeholders

The way the mining industry handled MRRT debate arguably did more damage than the tax itself. The gap in perception between what mining thinks of itself and what the rest of the country thinks of mining was already significant.  Somehow we managed to make things even worse.

The mining industry is right to focus on investors, but it is wrong to neglect the local communities and industries that we help support.  Those on the Eastern seaboard aren’t interested in the percentage of GDP that mining accounts for, they want to see the tangible results of how mining betters communities, from the local level right through to the national level.

So far we have failed to coordinate our messaging across the spectrum.  Our messaging is disjointed, appealing to whatever audience we seem to be targeting.  Not having a core message only degrades the credibility of the individual messages we deliver.

It’s now time to promote this industry as the comparative advantage of this country.  With good economic fundamentals we have the opportunity to progress a positive social agenda.

It’s time to get started.