Mine 2019

In many industries, the largest companies make sufficient investments in technology to merit an executive-level position to manage information technology. Among the top 40 miners, only seven have a chief technology, chief information or chief digital officer.

Automation and digitization are gaining some momentum in the industry, as companies look to reduce production costs and improve efficiency. But miners need to look at other industries that have led in the successful deployment of technology and apply similar thinking to their own businesses.

Examples of success with technology in the mining industry include Agnico Eagle’s deployment of an LTE network three kilometres underground at its LaRonde mine in northwestern Quebec after a pilot project last year. The technology lets workers communicate and share data and video in real time, improving both productivity and safety.

With technology evolving so quickly, the mining industry needs to become more agile in how it uses it, which will also require employees to embrace and champion the change. To encourage this mindset, companies should take a closer look at how employees learn and what they want. Employees, particularly millennials, want to learn and stay current, but they’re also looking for the personal benefits technology can offer, including mobile access to their work and greater flexibility around when they work.

Canada’s mining industry creates billions of dollars of value each year that benefits many stakeholders, including governments, employees, shareholders and others.

Through taxes and royalties, mining distributes a significant proportion of funds and earnings to governments. Last year, the six Canadian companies listed on the global top 40 paid aggregate direct taxes of US$1.6 billion and royalties of US$858 million. They also made US$78 million in community investments. For the five companies that reported employee costs, salaries and wages totalled US$4 billion. Outlays on dividends, share buybacks and capital spending created additional wealth.

At a time when public opinion perceives corporations to be retaining wealth, it’s important for Canada’s top miners to show stakeholders the full picture. Relying on public filings and financial reports is no longer sufficient. Instead, companies need to explain their total contribution to society.

For the mining industry to improve public perception of its brand, companies must diversify their ranks to better reflect the world they operate in.

Collectively, the Canadian miners listed on the top 40 are heading in the right direction when it comes to improving gender diversity, but the pace of change is slow. They’re making some progress, with women accounting for one-quarter of Canadian board appointments last year, compared to 21% among the global top 40. Looking at new senior management appointments, the respective figures were 27% for Canadian companies and 12% globally.

In 2018, the overall board composition of Canada’s six miners in the top 40 was 21% female, which was on par with the global rate. Women comprised only 10% of senior management positions, which was slightly below the global figure of 11% and raises the question of how the industry will be able to find female leaders with industry experience to fill board seats in the future.

On their own, equity initiatives won’t be enough to address the imbalance. Achieving gender diversity and inclusivity needs to become a strategic imperative for companies, which means they can’t look at it as just another human resources policy. Rather, the issue requires board oversight and the involvement of top leadership. Companies also need to embed diversity and inclusion into business objectives, performance measurement processes and compensation incentives.

The world’s largest mining companies have made significant improvements in addressing how their operations affect the environment. Most of the top 40 have committed to greenhouse gas reductions of between 3% to 5% by next year. They have also stepped up their public reporting on sustainability issues. But in today’s environment, disclosure on its own isn’t enough to win and maintain the trust of stakeholders, many of whom want to see direct and visible progress.

The mining industry doesn’t appear to have kept pace with some other industries when it comes to setting clear and measurable environmental goals. Companies need to do more, especially as a growing number of institutional investors are now assessing how companies approach environmental, social and corporate governance issues before they look at investing in them.

Savvy companies have made the risks and opportunities associated with climate change a strategic matter that garners direct oversight from their boards of directors. Some are also tying a part of overall compensation to how well employees manage sustainability efforts. At Teck Resources, for example, sustainability performance affects at least 5% of senior management team members’ annual target bonus. New ideas and policies like these will help the mining sector catch up to, and keep pace with, stakeholders’ evolving expectations.