SME President's Page
Before I begin to ramble about the near-term future, it seems appropriate to recognize an important event in mining that occurred 150 years ago in 1871 with the founding of the American Institute of Mining, Metallurgical and Petroleum Engineers, better known as AIME.
SME and its more than 13,000 members should offer congratulations and “Happy Birthday” to AIME on its founding in Wilkes Barre, PA by 23 of the most influential and distinguished leaders of mining at the time. During the next 12 months or so, there will be special events commemorating the establishment of AIME including events at our MINEXCHANGE 2022 SME Annual Conference & Expo in Salt Lake City, UT. Similar festivities will be hosted by our sister societies (TMS, AIST and SPE) that will include special speakers, a video, champagne and cake events and commemorative gifts. I hope that you can participate in honoring and remembering this piece of American mining history. And please read the article in this issue on page 34 by George Luxbacher.
Looking at the present, and especially toward the next 12 months, the stock market and metal prices continue to move in the right direction. We will soon have three choices of COVID vaccines that we hope will knock down another wave and head off another year of social and economic lockdowns. We start the year with a new administration taking office in the United States and some different chemistries in both houses of Congress and in the Supreme Court. We are not able to forecast the weather to the accuracy we desire nor predict the random events that uplift us or challenge our patience. But, because we are a part of the mining and underground construction industries, we are dominantly optimistic, supremely creative and able to turn adversity into opportunity no matter the circumstances we encounter along our paths.
In the words of PricewaterhouseCoopers (PwC), among global industries, “mining has proven to be both resilient and resourceful,” as it addressed the challenges of the past months. Many countries have come to realize that mining is essential during times of crisis and is the bedrock of economic recovery. Yet, events of recent months have challenged many assumptions regarding the wisdom of some business strategies and practices. Together with shifting values expressed by communities, investors and regulators, and in the face of the pandemic, the mining industry’s approach to act locally and implement globally is providing far-reaching and positive responses and actions.
As an example, following on the near collapse of face-to-face business, mining leadership has revisited the risks of critical global-supply chains. Many are implementing plans to invest more in local communities. As a component of a broader environmental, social and governance (ESG) effort, shortening and localizing supply chains can be an innovative and productive form of community engagement that may provide enduring and positive growth opportunities. This style of collaboration has been a cornerstone of the International Council on Mining and Metals (ICMM) members’s response to the pandemic. SME became an Association Member of ICMM in the past year.
There is clear consensus that mining and mineral resources are integral to establishing a sustainable society of the future. However, for success, it will be the company that can adopt a culture and business approach that includes five important components. These will include:
* Access to resources: There will be a need to venture into frontier areas, whether in remote locations on surface, sub-sea, ultra-deep earth, or in space to access the raw materials required by a decarbonized, sustainable society.
* Innovation in discovery, mining, processing and waste handling: New technologies will be needed to find mineral deposits, to extract them with minimal disruption to the ecosystem, to recover all of the useful components of the deposit, and ultimately, to responsibly handle the waste products, if any. The ideal mine of the future will process an ore deposit, using all of the component minerals and leave zero waste.
* Evolving workforce: Deploying new technologies and business models will require mining employees to possess new skills as companies revamp the workforce of the future. Flexibility and balance will be required as some mines will be largely automated with a minimal workforce, while other mines will need to be conscious of host communities desiring an optimized workforce.
* Social contract: Creating new business models that deploy real and sustainable benefits for communities near mines will be key for successful projects before, during and after closure. The way new mines interact with other industries and agriculture and the use, treatment and budgeting of water, land and air resources are components of the contract.
* Finance and economics: Innovative and alternative financing instruments, better feasibility and economic modeling and risk mitigation alternatives such as joint ventures, consortia and production service agreements will become more common for capital-intensive projects, especially in challenging locations.
It is evident from research and publications, as well as in statements by business leaders, that the mining and underground construction industries are making huge efforts to implement all of these drivers for future success. In an unexpected way, the dislocations caused by the social and business disruption of 2020 has accelerated efforts in all of these areas. As daily life moves back to a new normalcy, we need to remember what PWC said about mining as resourceful and resilient. As we continue innovation and improvement in the areas of operational and ESG technologies, mining and underground construction will be the standard bearer of a trusted industry in the next century.
Things are improving!