INNOVATION : STATE OF PLAY MINING INDUSTRY SURVEY 2017

Transcription

1 INNOVATION : STATE OF PLAY MINING INDUSTRY SURVEY 2017 SUMMARY INSIGHTS The 3rd biennial survey of more than 800 global mining leaders reveals the impact of a rapidly changing international marketplace and its effect on innovation. SUPPORTED BY COPYRIGHT 2017 ALL RIGHTS RESERVED VCI PTY LTD

2 321 companies Global mining leaders share their views on innovation Our 2017 survey of innovation across the global mining industry is the third major survey of its kind undertaken by VCI in conjunction with platform partners The University of Western Australia and METS Ignited. The survey, conducted between August and December 2016, received more than 800 responses from industry executives, across 60 countries. While the 2016 survey sought to build on data gathered in the 2013 and 2015 surveys, its main objective was to assess the impact of the changing global mining market and its effect on innovation. The 2017 survey also takes more in-depth look at key industry drivers including social pressures, collaboration across the ecosystem and digitisation. VCI worked closely with the Chamber of Mines South Africa and Chamber of Mines India on this year s survey. They provided input to the survey and helped in its distribution. VCI would like to thank the many mining and associated services companies that took part in the survey. Research such as this is an important part of the development of the sector and will contribute to a robust future respondents 69% executives

3 Innovation : State of Play ESTABLISHED IN 2012 INDUSTRY WIDE SURVEY 330+ responses across the globe FULL ECOSYSTEM SURVEY 800+ responses Launch in mid INAUGURAL SURVEY 55+ responses across Australia 2015 CEO INSIGHTS Interview series with 15 CEOs and Chairmen across the globe 2017 CROSS-INDUSTRY REPORT Interview series with CEOs across the resources, agriculture, health, infrastructure, defence, arts, culture and tourism industries to compare and contrast the state of innovation and identify share opportunities What this survey really does is drive an arrow through the major mining innovation issues. I hope people pay a great deal of attention to it. MINING CEO

4 The mining industry is marked by cyclicality Crude oil Copper Iron ore Gold 8x 8x 7x 7x 6x 6x 5x 5x 4x 4x 3x 3x 2x 2x 1x x PERIOD 1 Rise of Japan PERIOD 2 Post-Japan reversion and plateau PERIOD 3 Rise of China PERIOD 4 Post-China plateau Note: Prices listed in chart are 2016 World Bank forecasts published on July 26th 2016

5 We are at a pivot point WE ASKED: Which of the following macro trends will have the biggest impact on mining over the next 15 years? 37 BY % OF RESPONDENTS Technological change and disruption Environmental pressures Technically aware generation entering the workforce Asian (inc. India) economic development Global integration Transparency and regulation Geopolitical tensions Ageing population Income inequality Urbanisation The Market, Moore s Law and Mother Nature are the three biggest forces shaping the world today. THOMAS FRIEDMAN

6 The risk of technological disruption is real Areas most subject to disruption over the next 15 years BY % OF RESPONDENTS Sensing & data Artificial intelligence, decision support and analytics Robotics and automation Biological and chemical engineering Advanced materials Manufacturing techniques Energy technologies Integrated and continuous processes Communications technology and connectedness

7 Different regions have different needs WE ASKED: Where in the value chain do you see the greatest value over the next 15 years? EXTRACTION EXPLORATION ENVIRONMENT PROCESSING END-TO-END OPTIMISATION EXTRACTION

8 Society s expectations are increasing WE ASKED: Why is mining perceived negatively in society? 76 % 46 % 31 % HIGH PROFILE ACCIDENTS COMMUNITY IMPACT ENVIRONMENTAL IMPACT

9 Systemic design is required for sustained success WE ASKED: How should investment in innovation achieve the best overall social, environmental and economic outcomes? Companies should focus on 2 key areas of outside the fence investment for the highest return 37 % 30 % INVEST IN LOCAL SERVICES AND INFRASTRUCTURE FOCUS ON LOW FOOTPRINT DESIGN

10 Innovation is more critical than ever before Companies that claim innovation is critical to their company s survival in the long term. 37 % 41 % 62 %

11 Being a follower is not an option WE ASKED: What is your company s approach, and how successful have you been introducing new innovations into your business? 6 % 12 % 43 % 39 % HIGHLY SUCCESSFUL 17 % 31 % 39 % 13 % SUCCESSFUL 50 % 27 % 20 % 3 % NOT VERY SUCCESSFUL Conservative follower Fast follower Lead industry Lead across industries Less than a half of mining companies describe themselves as leaders, compared to followers.

12 Ecosystem health drives innovation Actions and relationships that drive innovation in the ecosystem. GOVERNMENT AND COMMUNITY RESEARCH SERVICE INDUSTRY MINERS Applied research Fundamental research BIGGEST DRIVER OF INNOVATION Larger service companies Smaller services companies FUNDING 3RD MOST IMPORTANT RELATIONSHIP MOST IMPORTANT RELATIONSHIP Explorers Tier 1 Tier 2/3 2ND MOST IMPORTANT RELATIONSHIP

13 Ecosystem health drives innovation Actions and relationships that drive innovation in the ecosystem. 48 % 57 % 24 % 33 % Believe that Governments should facilitate collaboration platforms Believe that mining companies should involve suppliers in their innovation process View CEOs as drivers of innovation in mining companies Of services companies say that all employees drive innovation

14 A cultural shift to embrace innovation is required A shift in industry culture as well as new skills are required to leverage technological change. Technological change and disruption (robotics, automation, AI) are expected to impact innovation over the next 15 years Resistance to change and skill availability are considered the greatest people challenge to implementing new technologies One in five respondents reported industry culture as the biggest impediment to innovation in mining

15 Business leaders shape this culture WE ASKED: Who is the driving force of innovation in your company; and how do you incentivize your workforce to innovate? All - it is core to our culture Chief executive officer Business unit heads Head of technology Head of operations Frontline leaders (eg. Supervisors) The board Head of strategy Head of information technology Communicate success stories Demonstrated leadership Public recognition Individual incentives We don t Set stretch goals Career promotions Create a burning platform Employee share schemes Company-wide bonuses 0% 10% 20% 30% 0% 10% 20% 30%

16 Key skills are required to foster acceptance WE ASKED: When implementation programs of new innovations fail, what is generally the reason? Change management 24% Project complexity Budget Impatience Unforeseen impacts Insufficient benefits Technology integration Technology maturity 8% 9% 9% 9% 8 11% 10% Many lead operators hate automation. They struggle to imagine a world where they are not leading large groups of people Skills 6% Schedule 3% Partner relationships 2% 0% 5% 10% 15% 20% 25% 30%

17 Diversity could be the answer WE ASKED: Which parts of the mining industry are most subject to potential disruption over the next 15 years? EXTRACTION RESPONDERS 61% MALE 39% FEMALE NEW BUSINESS MODEL RESPONDERS 40% MALE 60% FEMALE

18 What s next? INNOVATION: STATE OF PLAY IN 2017 RELEASE REPORT PRESENT AT CONFERENCES DRILL DOWN INTERVIEWS INDUSTRY ROUND TABLES BENCHMARK Mining Innovation: State of Play 2017 report will be released for sale in Q2 Present results at selected events throughout the year Interviews with select participants on leading themes from the survey report Series of round tables throughout the year exploring key themes from the survey report. Benchmark companies against peers in the industry.

19 Contact us for more information AUTHORS Graeme Stanway Corinna Griebel Paul Mahoney CONTRIBUTORS Peter Nicholls Mark Stickells Sarah Boucaut SUPPORTED BY COPYRIGHT 2017 ALL RIGHTS RESERVED VCI PTY LTD