Anglo American’s CEO, Mark Cutifani, warned the mining industry against complacency in his plenary
session speech at the recent World Mining Congress.

The conference’s technical program, which included several hundred presenters and co-authors, spanned a variety of topics that comprise the nuts and bolts that help structure the industry of today—from underground mining to mining economics, and ethics/sustainability to applied exploration geophysics. However, remarks by speakers at the event’s plenary session provided a backdrop of the current issues, challenges and opportunities that will shape and drive the industry of the future.

Despite the industry’s current financial troubles, good prospects still exist: for example, Jacynthe Côté, chief executive of Rio Tinto Alcan, noted that in May, Australia’s federal government conditionally approved the company’s plans to expand mining and extend the life of the Weipa bauxite mine in Queensland, Australia. The mine produced 23.7 million metric tons of metal-grade bauxite in 2012.

Côté told reporters at the World Mining Congress that Rio Tinto would formally decide within the next year on whether to enlarge the operation to help capture rising demand from China. The expansion, known as the Embley project, would extend mine life by about 40 years, depending on actual production rates, and would allow Rio Tinto Alcan to maintain continuity of supply to its two alumina refineries at Gladstone and also to supply the growing third-party market stemming from the realignment of the Chinese aluminum industry.

Operations such as Weipa, for example, lend an air of permanence to the global mining industry—Comalco, Rio Tinto Alcan’s predecessor, began mining the deposit in the 1960s and if current expansion plans are given the go-ahead, the mine could endure for the better part of a century or more. However, the chief executive of one of the world’s largest mining companies sees a future in which the industry could cease to exist as a separate, independent entity unless it changes its basic philosophy.

Mark Cutifani, CEO of Anglo American, remarked to the audience that, “If we, as leaders in the mining industry, continue with our traditional conversations around incremental innovation and change, the mining houses of today will simply become subsidiaries of larger and more efficient industrial conglomerates.

“An even worse scenario may await us in more centrally managed economies, where frustration with rising commodity prices causes national governments to consider pushing more aggressively into resource nationalization conversations,” he said. “Now, while the integration into broader and more efficient private conglomerates would be one thing, the nationalization of the industry would be a difficult development for the industry.”

Cutifani said that taking into account the industry’s contribution to the world’s economic activity—which could conceivably represent as much as 45% of that activity given the industry’s widespread influence on service and support industries, as well as its importance to the productive capacity of other industries—mining could make a “not unreasonable” claim that it is the most important industrial activity on Earth.

“Unfortunately, though, as an industry we’re not very good at telling our story in a way that regular people can see...or more importantly...feel,” he said. “There are still far too many people who simply don’t see the linkage between the role of mining and the indispensability of minerals and metals in a modern, industrialized and highly urbanized society.”

Listing the industry’s well-known challenges—being unable to access mineral resources due to social or legislative limitations, depleting the lowest-cost resources by planning only for the short term, for example—he brought up a less-publicized issue: “We, as an industry, are woefully underspending on innovation and businessimprovement programs given the state of extraction challenges. On a revenue-to-revenue basis, the mining industry spends 80% less on technology and innovation compared to the petroleum sector. This is an astounding figure when one considers our operating costs are increasing at a rate that is three times consumer inflation rates.”

Stressing that the industry must take bolder approaches to get its story, and value, across to political and community leaders; work more closely with local partners to solve the problems that mining commonly causes in nearby communities; and develop a more aggressive attitude toward social, technical and commercial innovation, Cutifani warned that “if we cannot solve these most pressing challenges, other industry leaders, with greater insight and vision for the future, will.”