Mining companies and social media: Enemies or a natural fit?
Australia’s mining industry has had plenty of reasons to dislike the internet after recent online activism against Whitehaven Coal and other companies.
A fake media release emailed to journalists resulted in Whitehaven shares dropping by as much as $300 million on January 7th, before the company was able to respond. Other companies have had their Facebook pages sabotaged, while activists reportedly used social media including Twitter to delay Lynas Corp’s Malaysian rare earths plant.
Anti-mining activists have taken advantage of social media to help raise funds and rally support, as well as criticising companies directly on their own sites.
With all the potential risks, is it worthwhile getting involved?
Considering that top networking service Facebook now has a billion active users, including 12 million in Australia, the power of social media is hard to ignore.
“Companies have a choice to build their reputations through engaging widely in the social sphere, or allow their reputations to be formed by the voices of others if they neglect to engage,” according to Chris Fraser of Swann Global.
By engaging in social media, companies can demonstrate their openness to the community and willingness to engage in a transparent manner, which is hard to do in the old-fashioned manner of simply issuing stock exchange announcements or press releases.
Mining companies such as Rio Tinto and engineering consultancy Golder Associates have found social media useful in recruitment, given the ability to communicate directly with jobseekers at low cost.
Even smaller companies are engaging with social media, including explorer Carpentaria Exploration which has developed its own YouTube, Facebook and Twitter channels as well as running a company blog.
A well-executed social media campaign can help build an investor base and establish a stronger public profile even before undertaking an IPO, according to analysts.
However, before diving in at the deep end it is worthwhile preparing properly:
1) Consider the rationale and research appropriate social media channels;
2) Draw up a social media policy governing usage for employees, and seek appropriate advice. Publish terms and conditions of use on channels such as Facebook;
3) Monitor all online and offline commentary about the company. Avoid deleting posts but instead respond to criticism which falls within terms of usage;
4) Remember that social media is about engaging with audiences, rather than just a platform for company announcements. Be open and authentic and consider feedback as free market research.
By Anthony Fensom, BWH Communication