Mining 2.0: Sustainable Cash Flows Has New Meaning

November 05, 2018

Expert Opinion Article by Dean McPherson, Head, Business Development, Global Mining Toronto Stock Exchange & TSX Venture Exchange


It is no secret that the end of the most recent mining cycle left the sector with a bruised reputation. Lower investment returns relative to other sectors of the market, combined with environmental concerns and substandard gender diversity practices, all served to feed negative public perception. On the heels of the commodities boom of the early 2000s, it could also be said that the sector was plagued by the irrational exuberance and hubris of the previous period.

As a result, the general sentiment was that many investors, millennials, in particular, were reluctant to invest in the sector.

Heading into 2018, stakeholders were in agreement: the mining industry needed to embrace progress and effect positive change to restore the image of the sector in the eyes of investors and the public. This year, we’ve made great progress on the road to recovery. In fact, I would say we’re entering “Mining 2.0”; a new age of responsible and innovation-based mining, fuelled by new sources of demand such as battery energy technology and positive macroeconomic fundamentals. 


The Momentum Builds for “Mining 2.0” - Mining in 2018 and beyond

With the modern investor in mind, mining companies have taken necessary steps to evolve and align the mining sector with global trends; placing an increased focus on corporate social responsibility (CSR), gender diversity and innovation.

The Mining Association of Canada’s “Towards Sustainable Mining” initiative is an example of the sector’s commitment to responsible mining. Large institutional investors are now requiring a review of CSR policies as part of their investment decision process. As a result, companies are being proactive in their engagement with community stakeholders, adopting consequential environmental practices and committing to the safety and health of employees.

Organizations like Women Who Rock and Women in Mining are relentlessly advocating to increase and diversify the talent pool. Their grass-roots efforts are gaining widespread support from stakeholders and companies as women are encouraged to pursue leadership careers in the mining industry.

Innovation is a constant pursuit in any industry and mining is no exception. Companies are continuously seeking ways to optimize existing processes in order to deliver value to their bottom-line. Recent innovations include using drone technology to make aspects of exploration more efficient and utilizing new water-saving methods to process ore, as well as automation efforts in extraction and transportation.

Mining is the foundation of the future; infrastructure and technology advancements are possible because of mining. Like many aspects of modern society, the mining sector has undergone a reckoning and realised it can do better. There is potential for all stakeholders to benefit as the mining industry advances. It took a supercycle and a prolonged downcycle to create our own type of revolution; however, I think we can all agree the future is looking brighter with “Mining 2.0”.


This article is provided for information purposes only and is not intended to provide any type of advice. This article is not an endorsement or recommendation of any specific securities in any industry nor is it an invitation to purchase securities listed on TSX Venture Exchange or Toronto Stock Exchange. Listing on TSX Venture Exchange or Toronto Stock Exchange does not guarantee the future performance of a security or an issuer.


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