Over the past decade, commodity prices reached both historic highs and historic lows, mining companies engaged in both significant acquisitions and consolidation, and operational realities shifted irrevocably in the face of a digital revolution. For an industry considered staid, change has been surprisingly constant.
That theme holds true over the past year as well. After hitting the bottom of the cycle, prices for many commodities have been slowly recovering, driven by Chinese government stimulus and improved demand in both developed and emerging economies. Coupled with the industry’s commitment to strengthen balance sheet performance, reduce debt, exercise capital discipline, and simplify portfolios, this has resulted in improved valuation metrics, record free cash flow, and stronger shareholder returns. In many respects, the mining sector is once again poised for growth. However, unlike previous cycles, mining companies appear to have learned from the lessons of the past. In paving new paths for the future, the aim now is to change for the better. This goal is driving their ongoing investments in innovation and digitization, inspiring their approach to the workforce of the future, manifesting in their commitment to strengthen government and community relations, and guiding their efforts to repair their public image.
AXIOS Consultants our global mining professionals help identify strategies with our client companies so that they can take to smoothing out the recovery and minimize the industry’s historical boom and bust cycle.
- The mine of the future dominates the landscape of the mining industry, with digitization and automation more important than ever. But success for mining companies won’t be about adopting the latest applications and technologies, but rather the embedding of digital and innovative thinking into the heart of their business strategy. This won’t be easy as competition for digital talent and those who can deliver insights from data is fierce.
- Boards are under increasing pressure as the transformation in their sector will require new ways of thinking and access to a diversity of views. This will not only be key inside the enterprise but also to the relationships with governments and local communities, the public image of mining, and in response to shareholder activism.
- Mining companies need to be mindful of the disruptive impact of technology on their commodity investment decisions. At the same time, they must respond to the issue of reserve replacement as budgets for exploration and development continue to dwindle and the appetite for acquisitions remains low.
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