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If the last year has taught the mining industry anything, it would be the sheer unpredictability of the sector. Commodity prices continued to dip toward unprecedented lows as the anticipated resurgence of commodities appears farther away than the industry had hoped. Miners are left to brace for more possible bad news in 2016.

But that's not to say that there are not still opportunities to shave costs, improve productivity, and position for the upswing. Deloitte's "Tracking the Trends 2016" report details several strategies that will help companies navigate the mine field that is today's mining industry. Deloitte’s top strategy? Investment in innovation.

"One strategy involves a continued investment in innovation," the report suggests.
"Companies embracing innovation are improving mining intensity whilst reducing people, capital, and energy intensity."
"In fact… some miners have realized energy saving of 10-40% by investing in renewable energy installations, deploying innovative energy technologies, and driving towards more automated mine processes to optimize energy consumption."

Beyond improvements in energy consumption, miners can focus on automating both processes and vehicles to achieve significant productivity gains. In an article to World Coal, ABB's Adrian Beer suggested that the integration of information technology (IT) and operational technology (OT) can help miners achieve dramatic efficiency gains.
"[IT/OT convergence] allows the entire operation to optimize its production processes to maximize efficiency improvements, sometimes as high as 5-10%, which are results that drop straight to the bottom line."
As sensors become increasingly affordable and as equipment becomes more internet-capable, mining companies will be able to collect and analyze large amounts of data enabling them to pinpoint drains on productivity.

Mobius Command and Control software allows unmanned vehicles to perform in hazardous areas without endangering the operator.
Our Mobius Command and Control software allows unmanned vehicles to perform in hazardous areas without endangering the operator.

"The move toward autonomous vehicles and automated technologies has already revolutionized mining operations," reads Deloitte. "As the 'intelligence' of these machines grows, they will be able to perform increasingly complex tasks, including hazardous activities--reducing labor costs and enhancing productivity as a result." Mining major Rio Tinto demonstrated in numbers released in October that a network of autonomous haul trucks in the Pilbara region outperformed a manned fleet by an average of 12%.

Investment in innovation holds many benefits to mining companies, but this is only one of the suggestions offered by the mining experts at Deloitte. To explore additional suggestions and to gear up for mining in 2016,



"Unfortunately, primarily due to risk aversion (of cost and technology) there is an old adage in the mining sector that 'miners like to be first to be second,'" says EY's Business Risks Facing Metals and Mining 2016 report which focuses on ten industry conditions that could create risks or opportunities for mining companies going into the new year. Amongst the risks highlighted by EY, innovation, or rather mining's natural aversion to innovation, makes the No. 10 spot.

"It is clear that compared with most other sectors, there is a deficit of transformational innovation in the [mining] sector," EY reported.
"The first automated truck was seen 20 years ago and yet there is not a complete fleet in existence at a mine."
The closest thing we have seen to having a fully automated fleet is Rio Tinto's Mine of the Future that touts a network of 69 unmanned haul trucks. Rio's competitors are working to catch up, but in 20 years should not the sector as a whole be farther down the innovation cycle with a technology that is clearly beneficial?

EY's point? Those that innovate will survive. Those that don't? Well, you get the idea.

So, where is the innovation? Driven by seemingly unending demand of the super-cycle's upswing and peak, mining companies were scaling with one focus: output. Little consideration was placed on productivity or innovation, only meeting demand as quickly as possible. However, with today's market now swinging the other direction, miners find themselves in opposite conditions with boards and investors highly averse to any spending outside of necessary operations.

Even amidst these conditions, EY suggests miners are still in a position for investment in innovation: "Just as 'necessity is the mother of invention,' so is super-correction the catalyst for fresh innovation in the sector." As short-term cost cutting methods have been depleted, the report goes on to recommend innovation as a major key to surviving the bottom of the cycle and positioning companies to take off when the anticipated upswing takes place.

As can be seen from the opening quote, though, mining companies that are interested in innovating face an uphill battle, both culturally and through current market conditions. Our aim today is to provide three ways mining companies can avoid the pain of incorporating innovation into their operations:


the Cover of the 2015-2016 EY business risks in mining and metals report


Sustainable mining is a responsible best practice of modern mining organizationsMining organizations are faced with balancing the location of ore deposits and environmental impact of obtaining them. Sustainability practices are designed to mitigate environmental and social impact during the normal course of work.

"Coal mining, particularly surface mining, requires large areas of land to be temporarily disturbed," says the World Coal Association. "This raises the number of environmental challenges, including soil erosion, dust, noise and water pollution, and impacts on local biodiversity." Mitigating the adverse impact on the environment is a challenge that extends to all types of resource extraction. Mines of all types are also faced with a potentially negative impact on social, safety, and political factors.

In recognition of these challenges, most mining companies are taking steps toward "sustainability," and many countries require a sustainability plan in order to maintain a license to operate. From Newmont Mining Corporation's mission statement, sustainable mining means taking steps toward environmental stewardship, social responsibility, and safety.

Sustainability Success Stories

Xstrata Coal's Westside mine concluded operations in 2012. Years before the closure, replanting and land reclamation efforts were already underway to develop a landscaped environment for the community to enjoy. Xstrata estimates the area will be completely reclaimed by 2035.

Watch the Westside Story Video...

Both GoldCorp and Vale contributed significant amounts of money to sustainable mining initiatives. From their 2013 sustainability reports, we find that GoldCorp spent $15 million on site reclamation to promote environmental sustainability, and Vale devoted $3 million to a global UN-backed anti-AIDS project to promote social sustainability.