"The future of work is another critical factor for the industry. The COVID-19 pandemic has clearly had a major impact on the workforce. As companies review their return-to-site strategies, a future-focused transformation is just as important as driving a trusted transition in the short-term. Technology will play a key role in enabling this two-geared approach."
What services does EY offer to the mining industry?
Traditional business models are being upended, sectors are converging, workforces are transitioning and the global economy is becoming ever more complex. Disruption is the new normal, and businesses are either disrupters or they are being disrupted. That’s why we take a rounded approached. The firm offers four integrated service lines — Assurance, Consulting, Tax and Strategy and Transactions — and has deep sector knowledge to help our clients capitalize on new opportunities and assess and manage risk to deliver responsible growth. With more than 6,700 mining and metals practitioners (2,000+ in the Americas), our strong global connectivity enables us to assemble the right teams, share leading practices across the world and address mining and metals companies’ needs, whatever location they are active in.
How does EY’s Canadian Mining Eye Index work and what does it aim to achieve?
The Canadian Mining Eye grew out of a desire to gain quarter-over-quarter analytical insights that we could collect and distribute across the industry. It tracks Canadian mining sector performance of 100 TSX and TSXV mid-tier and junior companies and is used as a tool to communicate industry analysis, insights and forward-looking outlooks on a quarterly basis. The report is fully digital, and each release typically includes an interview with an industry expert who shares their perspective on performance and top-of-mind issues for the sector.
Can you elaborate on the results of EY’s 2020 Global Mining Risk Survey?
The EY Top 10 business risks and opportunities — 2020 survey found that the top four considerations for mining companies are: license to operate (LTO), future of work, digital and data optimization, and reducing carbon footprint. Looking at the list year-over-year, we have seen a big shift from the traditional corporate social responsibility approach towards adopting a holistic environmental, social and governance strategy. That’s why we weren’t surprised to see LTO at the top of list for the second year in a row. But considerations for LTO have evolved and are now more than just social.
As our clients face a broader set of political, social, consumer and economic stakeholders, how they define LTO will change. For example, the way a company addresses consumer preferences for transparent supply chains or engages government relations when operating in countries with stronger political influence will have a major impact on a company’s LTO and long-term value.
The future of work is another critical factor for the industry. The COVID-19 pandemic has clearly had a major impact on the workforce. As companies review their return-to-site strategies, a future-focused transformation is just as important as driving a trusted transition in the short-term. Technology will play a key role in enabling this two-geared approach. It’s changing the way people work and mining must continue to adapt its digital agenda to attract talent with the right skills and experiences to meet the demands of the future workforce. This overlaps into the need for improved digital and data optimization. Our research shows that the industry is aware of the benefits of the digital revolution, but are grasping to identify where to start or on which initiatives to focus on.
Why do you think the mining industry has been slow to adopt new technologies in comparison to other sectors?
First, the mining and metals sector has intrinsic risks that keep executives awake at night. Although the benefits of new technologies are quite proven, there are many costs and resources associated with adoption, which can take away from other functions of the organization. Executives may face a prioritization conundrum, pushing digitization to the side to focus on other priorities.
Second, the sector hasn’t traditionally been an early adopter when it comes to new practices, including technology. As a result, companies assess their risk profile and appetite based on the performance and outcomes of industries that have gone before them and either succeed or failed.
Third, notoriously failed technology programs have triggered more caution from the sector. Executives have been hesitant to adopt new technologies without the positive use cases to support them. Someone once said, no one in the industry gets fired for not adopting new technologies. And I would reply “for now.” As we continue to bring on professionals from other sectors into mining and metals, the old behaviors will start to morph and new technologies will be viewed as laden with opportunities.
How do you think the COVID-19 pandemic will impact the introduction of technologies at mine sites, and the industry’s appetite for innovation?
COVID-19 has certainly taught us that things we once thought were impossible are possible — and can be done quickly if you put your mind to it. Whether it is operations, workforce, supply chains or other key aspects of life, we all had to rapidly reinvent and deliver newer ways of doing business. Employees moved online to work remotely, assets are being monitored virtually and some supply chains are moving to blockchain. The focus at the onset of the pandemic was to leverage and amplify existing technologies, but as organizations shift conversations to look at what is coming next and beyond, there will be greater opportunities to drive the innovation agenda. The pandemic has pushed companies to think differently, not only to survive, but to also thrive. And we can expect this type of thinking to be applied beyond digital as the industry looks to address long-term challenges like climate change or cybersecurity.
By the end of 2020, in what direction would you like to see the industry going?
I would like to see the industry embark on digital transformation, as well as profound innovation. This is foundational to revolutionize the sector. The digital revolution is the new normal. But it doesn’t necessarily mean that all companies must address this subject in the same way — there are opportunities for each company to do something different.
The most profitable businesses are the ones driven by digital — to optimize efficiencies and reduce costs, plus address some of the risks and opportunities mentioned earlier. So, within the next 12 months, let’s hope the digital debate becomes something of the past.