Deloitte has released its 11th annual mining report Trend Tracking. The report reveals several major trends facing mining companies. As the industry enters a new stage of development, mining companies need to consider more and more issues in formulating corporate strategies, including stakeholder participation, talent, regional risks and shortage of imported commodities, the report said.

This year, key areas of mining concern include the use of analytical tools to control risks and optimize supply chains; in addition to meeting compliance requirements, it will also have a positive impact on industrial clusters and the whole society; change public perception of the mining industry, and attract and retain diversified labor force.

Phil Hopwood, Deloitte Global Partner in Mining and Metals, said: “The mining industry is expected to see the strongest growth in a decade, but the market environment today is completely different from what it used to be. Subversion and volatility have become the norm, and rapid changes have challenged the adaptability of the industry as a whole. In this new world order, if mining companies are only satisfied with the current value created for industrial clusters, they will not be able to obtain the support of talent, investment or industrial clusters. Mining companies need to take a further stand and develop differentiated business models to create long-term value.

Xu Bin, Deloitte China Mining Director Partner, stressed: “Digital supply network construction is just emerging in the mining industry. Mining enterprises are expected to achieve the interconnection of supply chains from mines to ports, break operational constraints, and fully understand the end-to-end situation of the supply chain, so as to improve asset utilization, operational efficiency and productivity, and ultimately achieve cost savings.

In the past, when mining companies formulated strategic plans, the guiding principle was usually to achieve the highest output at the lowest possible cost. In this way, in the expectation of rising commodity prices, mining companies will continue to expand the size of mines to achieve higher returns. Although the bubble has long been broken, many mineral company still need to work hard to solve the remaining problems caused by this strategy.

Hopwood believes that mining companies need to broaden their strategic horizons. Effective strategic planning should not only focus on reducing production costs, but also consider the role of individual assets in the investment portfolio, value creation path, risk and income balance, and how companies stand out in the eyes of stakeholders. These important choices will ultimately help mining companies formulate investment allocation strategies, establish partnerships, and identify capacity development goals.