On a recent trip to Germany, the news broke that U.S. President Barack Obama knew the NSA was listening to German Chancellor Angela Merkel’s phone calls. That made for some interesting conversations in the beer garden. Then at a press conference for the German Engineering Federation (VDMA), the chairman of the association explained that this is a serious topic and that several of their members have complained about industrial espionage. The NSA is probably not probing German equipment manufacturers and services providers, but their competitors domestically and abroad may be. While industrial espionage is nothing new in this area, some of the company’s most valuable intellectual property can be saved to a thumb drive and pass right through security.

Coincidentally, at the same time, The Australian published, “Miners face increasing risk of cyber attacks.” The story was based on a Global Information Security survey performed by Ernst & Young, which reported that 41% of mining and metals respondents had experienced an increase in external cyber threats during the past year. Of the 1,900 companies surveyed, 39 were classified as mining companies. An EY paper, “Cyber Hacking and Information Security: Mining and Metals,” is available at www.ey.com.

The report said that the field of suspected hackers had grown more complex, from rebellious students targeting symbols of authority as a protest and a reflection of their technological prowess to include criminals, national governments and “hacktivists.”

More recently, mines have become the target of organized crime in certain regions where that element is pervasive simply because of the large cash flows and the ability to launder money. Disruptions at mine sites could benefit white collar criminals and competitors. As an example, the article said a speculator could take a long position in a base metal on one of the exchanges and then disrupt production by hacking into mining operations to cause a price spike.

While that seems a bit far-fetched, mining companies have become far more reliant on integrated IT systems in their constant quest to improve productivity and reduce costs. This increases their vulnerability and exposure to cyber attacks. With the number of mergers and acquisitions that have taken place over the years and the need to raise capital, it’s hard to believe a mining company could keep anything secret these days. Sometimes companies let their guard down during these periods.

Spying and conspiracy theories run deep at the mines, especially in the U.S. It runs the gamut from regulators using drones to increased inspections based on political persuasions. Some companies have hired hackers to fight back. With the centralized nature of many business functions, groups are increasingly being asked to assess cyber risk, but restrictive security measures could impact operations. The good news is that if the mine’s servers crash and they lose everything, they can call the NSA. They have you covered.

The editorial staff at Mining Media International would like to wish our readers a happy and safe holiday season. Enjoy this edition of E&MJ.

Steve Fiscor, Editor-in-Chief, E&MJ