Flatter commodity prices in recent years forced the industry to look closely at cost control and leaner operations to boost productivity. Most mining CEOs know this pathway results in diminishing returns. The next big wave of productivity gains will come from the successful integration of innovation across the supply chain.
In our CEO Insights – Mining report, the world’s mining leaders recognised that integrating innovation strategy within the business plan was critical to survival.
Australia has a mature resources industry built on the back of more than 100 years of experience in attracting foreign investment. The strength of the nation’s resource sector has supported much of our economic growth and helped underpin social development.
Our world-class expertise in developing mining operations has come about organically – it developed from specialised networks and clusters of mining companies. The Australian mining sector is now firmly entrenched as a leader in the global supply chain, not just at home.
Subscribe to The PickGet your Free Copy of THE PICK - Australia's Premier Resources Sector Investment Magazine - direct to your inbox...
Interestingly, 60% of global mining software is developed in Australia. According to Austrade, exploration and mining software generates $600 million a year of mining related revenues, including $240 million of exports, and directly employs 2500 people.
About 600 Australian companies have mining operations overseas, including more than 200 ASX-listed companies with exploration and production activities in Africa.
Our 2014 Innovation State of Play survey identified Africa is an example where early movers have gained the advantage over their slower peers. Late comers often struggle because they don’t understand the local conditions.
The 2014 survey of mining executives showed that it’s actually less risky to be an early mover than to wait, as long as a structured framework for implementation is in place.
“To wait may seem the safer option but by then the market is often crowded,’ report co-author VCI’s Graeme Stanway said. ‘Conservative followers also tend to have an unsupportive environment for innovation implementation leading to poor outcomes.”
A quote from one of the CEO Insights interviewees:
“If you go back thirty years, all the major mining companies used to have their own technology departments. I think it’s good they don’t because companies need to go to the market to get their solutions.”
We should be doing all we can to ensure the smaller end of town, start-ups and researchers have meaningful ways to connect and collaborate. The lesson for big miners is to support this process as they are likely to benefit directly from the innovations that emerge.
We recently completed the third biennial survey of mining executives as part of the Innovation State of Play platform. The platform also welcomed the METS Ignited growth centre as a supporting partner.
Early results from the 2016 survey of more than 700 senior executives from miners and equipment suppliers show the highest rated response for catalysing the innovation ecosystem was to participate in industry collaboration. They also emphasised the importance of the relationship between mining companies and research institutions.
The message is clear – innovation success is about seeing and doing. Don’t wait for innovation to be proven before you move.
Get involved and be part of the first wave, as followers are less likely to succeed when it comes to implementing innovation.