Accelerating digital to transform
Canadian miners in the Top 40 continued to be world leaders in digital transformation, focusing on increasing efficiency, enhancing safety and mitigating cybersecurity risks that global mining leaders say are increasing in likelihood and severity.
Partnerships and alliances with technology companies have become a key element in Canadian digital strategies. For example, Teck has partnered with Canadian start-up LlamaZOO to create MineLife VR, a virtual reality program that accelerates planning by turning data into an immersive visualization of a mine’s complete life cycle. Partnerships are helping mining companies to keep pace with change and to become market leaders in transformation.
Miners are using technologies that include artificial intelligence and digital twins to explore digital pilot projects. The upswing provides the opportunity to test the cost-saving potential of digital technologies before deployment at scale.
Canadian miners showed a strong commitment to safety, making up more than a third of the global Top 40 companies that reported decreased or steady injury frequency rates in 2017. Miners are also turning to technology in this domain, using predictive analytics to identify hazards and autonomous technology to remove people from high-risk tasks like drilling and blasting.
Organizations are also addressing the human factor in accidents. For example, a few Canadian mining companies are studying and monitoring operator fatigue to best decide how and when to intervene.
The power of partnerships
With rising shareholder expectations and a 5% growth in aggregated global labour costs, Canadian miners are unlocking value through collaboration to reduce costs, consolidate infrastructure and increase sustainability.
In this vein, Quebec-based miners have gained access to new financing sources by entering into alliances with government, private equity and capital markets. These partnerships provide timely access to cash and connect leadership with experience from outside the mining industry.
International tax impacts
US tax reform has had a positive impact on Canadian mining companies with operations in the United States. These companies saw their tax burden fall by 15%, reducing the effective tax rate by approximately 5%.
But tax reforms may have a different effect for miners with operations across the Atlantic, as reports circulate that some African governments may use tax as leverage to adjust their home countries’ shares of revenues from operations. While these claims are considered unsubstantiated, Canadian companies must pay attention to how they engage with foreign governments in the areas of taxes, royalties and sharing of economic benefit.
Diversity and governance
Canadian miners continue to show leadership in boardroom diversity. For example, women make up 25% of directors among Canadian miners, compared to 19% among their global peers. While the Top 40 companies nearly matched the Canadian year-over-year increase in boardroom representation by women, Canada slightly leads the global group as a whole.
Renewed exploration interest
The upswing in the mining cycle has renewed enthusiasm for exploration, an area of strength for Canadian miners. Exploration spending among Canadian-based companies rose 31%, more than doubling the average increase of the Top 40. The eagerness for exploration is also reflected in the 2018 rise in equity financing activity in Toronto, the location of world-leading exchanges with listings focused on early development and exploration