Autonomous Mines Fast Approaching

Q: What gap does Clareo fill in the market?

A: We are a strategic consultancy that focuses on accelerating innovation and transformation in companies. In the mining industry, we noticed that companies were caught in a vortex of incrementalism and a fast-follower paradigm, so there was minimal adoption of new technologies. Mining tends to resist transformation more than other industries when it comes to technology and sustainability.

Our approach is based around principles that engage companies in an alternative manner, particularly the mining industry. Mine closures strongly impact surrounding communities. We strive to teach stakeholders how to be more proactive partners in places such as Mexico, Latin America and Africa. To transform the industry, a highly engaged and inclusive program is necessary. Many companies have already adopted similar principles. We stay away from being too restrictive as each mine, country, region and jurisdiction has specific issues that cannot be resolved in a general manner. Our approach is flexible and adapts to the needs of each player.

Q: What would you consider to be the main consequences of the metal-price downturn and what role does Clareo play in this context?

A: When prices dropped, CEOs began to sharpen their focus on poor financial performance and productivity in operations. Processes became incredibly more effective and sustainable after companies re-evaluated their performance. Four years ago, we kicked off an initiative to measure how companies engaged with communities, the government and other stakeholders to promote better outcomes in the industry. I co-chaired a three-year initiative with Mark Cutifani, the CEO of Anglo American, which involved most of the major CEOs in the mining industry, NGOs and indigenous communities. Out of that effort came the formation of the development partner approach in 2014, as well as the faith- based dialogues with The Vatican and Church of England.

Q: Why does the mining industry underinvest in technology and innovation?

A: The main factor centers around the massive cash flow that was previously injected into the sector. It pushed companies into a comfort zone. Mining operators were completely blind to cost reduction thanks to their financial reserves, driven by super-high prices. The industry was awash with money and innovation was low before the supercycle. Operators need to articulate strategies that invest in transformation and it does not necessarily have to involve millions of dollars to be efficient. The process can be done through collaboration. The first step toward innovation and sustainability is to recognize the importance of securing capital returns and community engagement. We work with companies like Goldcorp, which is responding positively to our approach. The strength of the innovative push ultimately depends on the budget and commitment of the company.

Q: What role does the public sphere have to play in the development of the sector?

A: Innovation ultimately depends on the country and the amount of commitment it shows. The government’s role is to collaborate with the industry to promote sustainability and transformation while facilitating development. But the collaborative muscle should be strengthened and the public sector has to be careful not to smother the industry with too much prescriptive regulation. Successful countries are characterized by an engaged government that injects money into innovation and does not suffocate the private sector.

Mexico has to be more systematic and deliberate about the development of its resources. The country has many advantages, and it has not reached its full potential. It is ultimately closer to being a developed country than a developing country when compared to mining jurisdictions in other countries. The sophistication of its law is comparable to countries like Chile and Australia.