Mines must innovate to succeed - study

IOL pic july29 BR Mining 6867 INDEPENDENT MEDIA Photo: Simphiwe Mbokazi, Independent Media

Cape Town - Mining houses in Africa needed to push the innovation envelope if they wanted to succeed in a sector characterised by plunging prices, deeper and more dangerous mines and labour unrest.

This is according to a study released by Deloitte on Wednesday at the Investing in African Mining Indaba in Cape Town.

Innovation State of Play: Africa, a study conducted by Monitor Deloitte and the Mining Indaba, was aimed at understanding how African mining companies were innovating in order to strengthen and enhance their efforts.

It is the second of a three-part global series including Canada and Australia.

Andrew Lane, Africa Mining leader at Deloitte, said: “We wanted to assess participants' current innovation efforts and gain deeper insight into the key pain points and gaps in companies' innovation capabilities, as well as explore the broader issues the sector faces and hopes to resolve by becoming more effective at innovating.”

The survey findings shine a light on some key issues in the industry, such as whether the industry was future-proofing itself through innovation; if innovation strategies were being integrated throughout companies; and, if the answer to these two questions was no, how quickly they could catch up.

The report talks to three levels: core innovations, which optimise existing products for existing customers; adjacent or incremental innovations, which expand into new business; and transformational innovations, which are breakthroughs and inventions for markets that don't yet exist.

Lane says the report shows that the African mining sector is midfield in terms of innovation focus and impact. “This hints at an opportunity for the continent to push ahead and truly lead through innovation, particularly as the operational context lends itself to thinking and working differently to unlock efficiencies.”

The report found, while significant attention was being given to innovation by senior leadership and strategies were in place, mining companies had so far been unable to jumpstart the process due to a lack of a systemic approach. The study also noted the level of innovation in mining in Africa to be relatively balanced at 61 percent core, 23 percent incremental and 16 percent transformational.

This mix, which was found to be similar to that of the Canadian market, is described as healthy.

While both markets had a strong focus on core products and markets, which included an emphasis on technological solutions to optimise old techniques, there was significant scope to unlock higher levels of innovation.

In the African context specifically it emerged that companies found it a challenge to spread risk and were less likely to adopt innovations in-house, but may be successful through an external ecosystem.

Lane says innovation needed to address the mine system holistically, incorporating it into the likes of social, labour and stakeholder spheres.

“This is a view that is more inclined to be embedded in Africa's mining players and one behind which there is a rallying call to capitalise on more.”

He says, to unlock the potential of innovation and create a sustainable mining sector, companies needed be clear about what they were working on and how they saw their businesses of the future. “Importantly, senior management needs to champion innovation and the appropriate governance structures need to be in place,” he said.


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