21 October 2014

Meercats and Mining – Are we one and the same?

I get "out and about" a fair bit and was recently in Melbourne for the IMARC & RIU Conferences - oh and conveniently to see Hawthorn go back to back!! It seems the mining industry in recent times has an uncanny likeness and closely mirrors the behaviours of meercats!

Seemingly gone is the old "7 year cycle" and has been replaced with a volatile 7 day cycle. Only in years to come can we all look back and see that the extreme volatility was all part of a slow and steady upwards trend! Is that a light at the end of the tunnel, or a train coming towards us?

Observing the industry and speaking to a vast array of professionals on a daily basis, I see distinct similarities in the current industry as I do with a gang of meercats! Many are waiting to see what the leader does. Copies and follows them.

I can hear David Attenborough's voice loud and clear! "It's a bright and sunny day out on the vast West Australian desert plains. No rain in months, food sources are scarce and every move is fraught with danger! The sentry meerkat (watch guard) gingerly surfaces from their safe burrow, stands on his hind legs propped up by his tail and acts as a lookout while the rest of the gang all head to their highest vantage point to look for food and frolick in the sun!

The sentry, slightly disturbed and permanently nervous from previous encounters believes that he spots danger on the horizon! Is it danger, or just his imagination! With a distinctive warning bark, the guard warns the gang and everyone sprints to their nearest tunnel. The gang is safe, for now! But was there any danger in the first place?

Precious time passes. The gang are all hungry and many won't make it through the next few days. The sentry is always the first to emerge from the burrow to check for danger and we repeat the process!".

It seems that a lot of the mining industry are watching each other - too closely. Waiting for someone else to make a move. Waiting for signs that the coast is clear. The majority are highly risk averse, stuck in the past, too slow to innovate and their pace to progress would closely match that of a glacier! We are predominantly governed by conventional thinking, yet we are one of the worlds' oldest industries! Do I have the solutions? Not particularly. Merely an informed observation! Everyone is an expert! Everyone has an opinion! No-one has a definitive clue!

Mining is risky by nature - otherwise you are not a miner! You have next to no control over prices and you are exposed to the fluctuations, unknown variations in the ground (grade, structure) and Murphy's Law will dictate that, more often than not, your projects will be in some farfetched remote and inaccessible location under hundreds of metres of cover. It's an incredibly expensive process that requires strong commitment!

We are a robust industry and we'd all love to see things turn for the better. A more stable and predictable market will emerge and a return to sustained growth will happen! It is a light at the end of the tunnel.

We need to lose the meerkat sentry behaviours and be driven by our own instincts! Scour the horizon for danger yourself, believe your own due diligence and take the leap! If we change the way we look at things, the things we're looking at will change!

Take the step! You might get eaten, but you might also succeed…………..

Keen on your thoughts!?