Strengthening collaboration in the mining industry

In Deloitte’s 2017 Tracking the Trends report, collaboration between the government, mining companies and all relevant stakeholders is considered essential for developing a shared vision for the mining sector.

Deloitte Australia national mining leader Nicki Ivory noted that historically, mining companies have not been good at collaborating, but this was beginning to change.

One of the biggest areas of contention between governments and mining companies is the copious amounts of ‘red tape’, with Australia having some of the most stringent approvals processes for mining projects.

This, according to Ivory, is also hampered by the rise in ‘green tape’ – the lobbying from various community groups that do not want mines to be built or want mines to be closed down.

“That’s becoming an even bigger issue for mining companies because they also have to deal with the red tape and it adds to the time it takes to build [a mine],” Ivory told Australian Mining.

“Green tape can hold up mines far more than some of the compliances with government regulations.”

Ivory referred particularly to Adani’s proposed Carmichael coal mine in Queensland’s Bowen Basin, which has been wrought with green and red tape that has delayed its development.

She added that green tape was less predictable, making it harder for mining companies to deal with.

“There’s no rule book that says these are the things you need to do,” Ivory said. “It plays out a lot in social media and that’s the stuff that the mining industry struggle to deal with.”

Despite the contentious red tape, Ivory noted that the Australian Government was trying hard to foster collaboration with mining companies.

She highlighted government initiatives such as METS Ignited – which was developed to accelerate the mining equipment, technology and services sector in Australia – and the Minerals Research Institute of Western Australia which was created to find new ways to do things in the mining industry.

Coupled with the need for government to bolster collaboration with mining companies is the importance of attracting investment to further support the industry.

Ivory suggested the government should look at cutting down on red tape, particularly due to the perception of Australia as a place that takes a lot of time and patience to do business.

She highlighted that while some of these regulations are really important, others may not be, and the government should investigate ways to make the approvals process more efficient.

Another method Ivory suggested to attract mining investment is for companies to restore the trust of their investors through greater transparency, respect and a focus on returns. This in turn will generate more investment, she said.

Ivory believes a key way mining companies can also foster collaboration is through focusing on the societal outcomes of their projects or community efforts.

“They’ll put in place social responsibility objective and maybe build some things in the community but do they actually fully understand the societal issues that governments are dealing with on various levels?” Ivory said.

She placed green tape under societal issues and said mining companies should work together with the government to engage with communities and turn around the perception that mining is bad.

“[Mines] are not bad, they deliver really good things for the country which flows back into the community but how do we get the community to understand that?” Ivory said, a question she called on mining companies to ponder.

She emphasised that the community is the third leg of the triangle – including the government and mining companies – that needed to be addressed.

The Tracking the Trends report highlights four key methods mining companies can employ to foster greater collaboration between all stakeholders and ultimately support a shared vision for the sector.

Build long term solutions: Develop long term views to solve societal issues that will benefit the business.

Link societal outcomes to business success: Consider including social issues in project planning, develop cross-functional teams that are well versed in business and societal issues.

Measure social outcomes: Acknowledge the benefits of properly addressing community and government concerns. This could be through community impact studies to measure the factors, including job creation, professional satisfaction and financial and physical security.

Align with government: Work with the government to find ways to support broader local, regional and national development.

This article also appears in the August edition of Australian Mining.