Tracking the trends 2018 The top 10 issues shaping …

1 Tracking the trends 2018 . The top 10 issues shaping mining in the year ahead Contents Changing for the better 03. 1. Bringing digital to life 04. 2. Overcoming innovation barriers 10. 3. The future of work 16. 4. The image of mining 22. 5. Transforming stakeholder relationships 28. 6. Water management 34. 7. Changing shareholder expectations 40. 8. Reserve replacement woes 46. 9. Realigning mining boards 52. 10. Commodities of the future 56. Out with the old, in with the new 63. Harnessing the winds of change C. KI. NG. THE T. RE The last 10 years have seen the rollercoaster of N.

2 A. highs and lows in the mining sector continue. During DS. TR. this time, we have seen an emergence of innovative 10. RY. TH. Y. A. companies adopting transformative practices. As EA R. S. R ANNIVE. we now stand in the middle of what appears to be another bull run for some commodities, the next 10 years will see the continuation of rapid change in the industry against a backdrop of declining ore body grades, decreasing availability of tier one assets, and continued focus on shareholder returns. To thrive amid this volatility, companies must rethink the traditional mining model.

3 Change is coming and mining companies must find ways to remain relevant.. Philip Hopwood Global Leader mining Deloitte Touche Tohmatsu Limited 02. Tracking the trends 2018 . Changing for the better This 2018 edition of Tracking to strengthen balance sheet image. It is also resulting in a the trends heralds a milestone, performance, reduce debt, more disciplined investment marking our tenth year of exercise capital discipline, and approach one that may publication. Over the past simplify portfolios, this has ultimately expose the dark decade, commodity prices resulted in improved valuation side of conservatism as supply reached both historic highs metrics, record free cash flow, shortages begin to loom.

4 And historic lows, mining and stronger shareholder companies engaged in both returns. In many respects, the In this tenth anniversary significant acquisitions and mining sector is once again report, Deloitte's global mining consolidation, and operational poised for growth. professionals once again share realities shifted irrevocably in their experiences to help the face of a digital revolution. However, unlike previous cycles, identify strategies companies For an industry considered mining companies appear to can take to smooth out the staid, change has been have learned from the lessons recovery and minimize the surprisingly constant.

5 Of the past. In paving new paths industry's historical boom for the future, the aim now is and bust cycle. This year, That theme holds true over to change for the better. This our professionals also share the past year as well. After goal is driving their ongoing their outlook for the future hitting the bottom of the cycle, investments in innovation by identifying, in some cases, prices for many commodities and digitization, inspiring their potential industry disruptors have been slowly recovering, approach to the workforce of which may be on the horizon. driven by Chinese government the future, manifesting in their Thank you sincerely for stimulus and improved commitment to strengthen your years of support.

6 We demand in both developed and government and community look forward to your input emerging economies. Coupled relations, and guiding their and feedback. with the industry's commitment efforts to repair their public As the mining industry's value proposition is increasingly called into question, mining companies are beginning to see that they cannot succeed into the future unless they change the way they operate. This is about more than enhancing efficiencies. It's about re-establishing trust with stakeholders and collaborating to devise better responses.. Glenn Ives Americas mining Leader Deloitte Canada 03.

7 1. Bringing digital to life Using data driven insights to drive value In recent years, mining waste in the areas of execution, companies have come to realize process, structure, and design. that value, like beauty, may be Now, however, it is becoming in the eyes of the beholder. clear that success for mining Once measured by how well a companies isn't truly about company extracted resources, adopting the latest applications the industry's value proposition (apps) and technologies, which may be shifting to how well a will continue to evolve. Instead, company acts on information it's about embedding digital to optimize production, reduce thinking into the heart of their costs, increase efficiency, and business strategy and practices improve safety.

8 In short, data to transform the way corporate and the ability to organize, decisions are made. To succeed manage, and process it is in this effort, miners need a rapidly becoming a competitive clear vision of how the future differentiator and may even digital mine might transform spur new business models. core mining processes, the flow of information, and supporting The adoption of new back office processes. technologies initiated this shift, as miners recognized the power of digital solutions to remove 04. Tracking the trends 2018 . The future digital mine network that uses Internet of optimize their systems, from Transitioning to the future digital Things (IoT) sensors to capture pit to customer.

9 The aim is to mine typically begins by focusing data in real time. create an information layer, or on core mining processes with digital nerve center , that brings the goal of automating physical Yet, the real value comes together data across the mining operations and digitizing assets. from unlocking the insights value chain in multiple time This includes the adoption of within this data. To do so, horizons to improve planning, autonomous vehicles, drones, companies must rethink the control, and decision making three-dimensional (3D) printing, way they generate and process (see figure 1).

10 And wearable technologies, all information. This involves operated through a connected using data driven analytics to Figure 1: Integrated operational planning, control, and decision support Integrated operational planning, control and decision support Real time Data platforms Real time sensor data to Integrated well governed drive short interval control in execution, data platforms support all processes reduce variability, and shorten and all time horizons planning cycles Historical Future Reporting and analysis of historical Future insight derived from data and insight gained from historical analysis to improve planning, analysing trends .