The Unique Challenges Facing The Gold Mining Sector in 2018
The gold industry has kept the Australian economy strong for the better part of the last century. Times have changed, though, with tight margins, high costs, and deeper deposits, and a whole host of new challenges facing the gold mining sector. The modern age presents its own problems, as companies struggle to adapt to new data-driven operations.
As many miners are ageing out of the business and approaching retirement, there is a distinct lack of new miners waiting in the wings to pick up their downed tools to take over the operation. This includes the most skilled specialists and managers in the industry. Currently, there are thousands of available jobs in mining, but skills shortages and changes to visa regulations make it extremely difficult to find highly-skilled specific workers.
This is a particular problem for Australia as the country has the world’s second highest operating costs. The reason for this is the remote deposits and the cost required to power and fuel those mines and transport the product. Australian wages also factor into this, as they are higher than in many other countries. This isn’t helped by the skills shortage, this is driving up wages as it becomes more difficult to source replacements.
Gold exploration took a nosedive in 2012 and a lot of that is down to the price of gold and a lack of interest from investors. While the government has introduced incentives to attract new campaigns, it’s certainly a long-term challenge. It affects drilling companies, assay labs, consumable supplies, and surveyors.
Using data-driven understandings to drive value
Mining companies have now realised the importance of the value of data. Mining has always measured a company by how well they extract resources, but now every company must act on the collected information to optimise their production, find new ways to reduce costs, upscale efficiency, and dramatically improve safety. Data and the ability to organise, manage, and process the information is very quickly becoming the most competitive difference between competitors in the market, and will absolutely create a new level of data-driven mining for the future generations. Adapting to this change is one of the most challenging and expensive hurdles mining companies face today, but they are changes that will drive the future.
The Price of Gold and AUD vs USD
Gold prices are fairly volatile, they aren’t subject to the typical supply and demand limitations that other commodities are. With the majority of mined gold still in circulation, it isn’t converted, reused, or consumed like the base metal tends to be. Unfortunately, the price is also impacted by world affairs, politics, and conflict. The instability created by these factors generally have a positive impact on gold, and stable periods can weaken the price. For Australia, the exchange rate presents a unique challenge as the AUD is more volatile than the USD.
Automation plays a huge role in the challenges faced by the gold mining industry. Everything from the automated back of house processes to automated vehicles makes a difference to how a site runs, how productive it is, and it even affects employee morale. Fitting automation processes and automated machinery in without losing staff is one of the biggest challenges. There is no doubt that automation replaces human roles, and in the eyes of money-making, automation simplifies everything, but in order to do that, change needs to take place within.
As concerns about water availability increase, mining companies must create more effective and innovative ways to use, re-use, recycle, and save water in water-scarce areas. They also must manage the wastewater to ensure the environment surrounding mines, and the river systems downstream from mines, that stretch across the entire country are not contaminated. Water management is quite possibly the biggest challenge to date for mines, but without complete waterway protection, our future as a country is at risk.