Investing now for future growth and replacing inventory to support the development of new assets will be vital for the Australian mining sector, according to Trevor Hart, KPMG Global Mining leader speaking at the 5th annual International Mining and Resources Conference (IMARC) in Melbourne.
“The optimisation of assets and a focus on debt reduction are the two key aspects of securing a positive future for 2019. Many sector leaders have been addressing these for the best part of a decade,” said Mr Hart. “While there is a logic to that, it means the mining sector is now on the cusp of new investment for future growth. It needs to replace, or add reserve inventories – or indeed develop new assets.”
Mr Hart said that many in the sector were now recognising this need as the industry underwent significant cultural and structural change.
“Technology and collaboration are the vital parts of achieving a smooth transformation in a sector that is rapidly embracing innovation and dealing with the challenges of disruption on a global scale,” he said. “I see enormous potential in the digitisation of mining to help achieve efficiencies and reduce costs, at the same time improving safety. We have only just begun to see what can be delivered through the uptake of technologies such as drones, autonomous vehicles, and 3D printing as well as ways to share intellectual property within the sector.”
He said in addition to transformation, an uptick in M&A activity in the ENR sector globally together with significant increases in exploration budgets would be the key themes for 2019 and beyond.
Mr Hart also pointed to the rise of Environmental, Social and Governance (ESG) as a driver of change in the sector and said that ESG considerations were now firmly on the table in ENR boardrooms.
“We are seeing the mining sector leaders retooling production in mines, and at the same time, recognising that environmental challenges, such as water and fuel usage, point to the areas where rapid improvement is needed and that is also positive.”
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