Dubai: Mining companies continue to grapple with challenging market conditions, including price volatility, geopolitical turmoil, rising costs, declining grades and a general lack of financing. To remain viable into the future, companies must get more adept at balancing short-term investor expectations with long-term business imperatives. This is according to Deloitte’s newly released report Tracking the Trends 2015: The top 10 issues mining companies will face this year.
The report highlights that in order to embrace the need for longer-term thinking, mining companies are getting back to the basics to clarify what they stand for, what they believe and what they plan to achieve long term.
“There is no doubt that mining companies operate in complex geographies where they face increasing challenges in responding to investment, human capital, community engagement, regulatory and compliance requirements,” Salam Awawdeh, consulting partner and Energy & Resources leader at Deloitte Middle East, said.
“At the same time, they have an imperative to adapt to changing market conditions embracing new strategies and tactics as they seek to produce more for less cost, in a world where volatile market conditions are the new normal and geopolitical contexts are increasingly impacting economic decision-making.
Now in its seventh year of publication, the report delves into the pressing trends facing the mining industry in the year ahead and offers strategies that companies can employ to adapt to changing industry dynamics.
“Within our Region, priorities tend to be different from one market player to another driven ― for the most part, by return on invested capital (ROIC) requirements and risk management strategies. We are witnessing clients investing more into strategic workforce planning, employee engagement, career development programs to help push workforce nationalization plans and deal effectively with talent shortages. Some are focused on dealing with commodity prices as they manage phosphate, aluminium and gold portfolios susceptible to price fluctuations that may affect their operations profitability and cash flow. Others are focused on managing operating cost increases resulting from higher raw material, power, freight, and mining equipment costs. And, a few chose to focus on access to infrastructure enhancing their travel time on project sites and avoiding transportation systems breakdown. Our report speaks to the 10 common movements we see shaping the industry today,” Awawdeh, added.