Rubén de J. Del Pozo Mendoza
AIMMGM (Association of Mining Engineers, Metallurgists and Geologists of Mexico, Zacatecas District)
Expert Contributor

Five Challenges Mining Will Face in 2021

By Rubén de J. Del Pozo Mendoza | Thu, 01/07/2021 - 13:12

This dying 2020 hit us out of the blue and immutably; that upheaval has changed the world we know and forced us to change the way we do things. The mining industry has done its part. Mining has seen in this new reality an opportunity to rethink operations, expenditures, digitalization and the impact on communities, among many other important factors. On deep reflection, here is my perspective on five elements that will challenge the mining industry in the coming year:

1. Balance between operating costs and productivity

The pandemic has generated, without a doubt, an increase in operating costs: healthcare, transportation, protective equipment, medical tests, adaptation of spaces, among others. It has also generated a slower operation that makes it more difficult to reach objectives. In summary, it has generated greater expenses and a decrease in production. The challenge is about finding the condition to accelerate the automation of processes and to generate a leaner, more agile and lower cost operation.

2. Government relations 

Globally, governments have been empathetic to their industry and have created conditions for a relationship of congruence and mutual understanding in dealing with the pandemic. Unfortunately, the same is not true for Mexico, where it has been a major challenge due to the lack of understanding of the government toward the mining industry, generating unnecessary wear and tear and a weakened line of dialogue that prevents finding opportunities rather than risks. Although before this health crisis we were in a moment of perplexity due to the recent cancellation of the mining fund, today, we are warning a double blow of uncertainty has been generated for investment in Mexico. The great opportunity is then the awareness of the government to accelerate the ability to reach agreements between the parties.

3. Social license

The scenario itself is challenging due to the conditions described in the previous points but it is made even more difficult when the stimulus to communities derived from support programs using capital from the former mining fund are at risk at a time when empathy and support for communities is most needed. Mining has always demonstrated its solidarity and even more so in situations of vulnerability, but creating these programs is not the responsibility of the industry, which is why the pessimism of the people in the areas surrounding the operations can generate crises in their relations with the companies. It is, therefore, very timely to generate a clear and fair legislation, a policy of support and placement of resources that corresponds to the way in which mining production contributes to tax revenues, which in its proper distribution can help the people of these areas that generates a virtuous circle.

4. Digitalization

The new reality accelerates the need in mining to digitalize its processes and redefine the way it interacts with technology. The great challenge is to stop thinking about replicating past models in the digital world, even though many companies continue to develop products and services with pre-pandemic models. To look at the world through the eyes of technological opportunities, according to the Tech Vision 2020 survey, 52 percent of people interviewed believe that technology is embedded in almost every aspect of their daily lives. In fact, 19 percent state that technology is so integrated into their lives that they see it as an extension of themselves. So the time is right to create a digitalized, hyper-connected, remote mining sector that allows for pandemic-proof operations and the like.

5. Labor force

In the face of new technologies, people must adapt not only to create but also to be productive in the face of digitalization, which means possessing openness, new skills, time management in the home office and personal balance, above all in relation to the emotions that arise in the face of new ways of working and interacting with others. The task belongs to all of us, and we must accelerate the process of incorporating technology into our productivity by finding new ways of thinking and facilitating processes at low cost and with human balance.

In this, as in other crises, it is very pertinent to look for the opportunities we have to grow as human beings, as an industry and as a government. I am convinced that changes can generate a better awareness of the way we interact with others; we will be more profitable and the benefits will permeate society.