Gap in talent: global mining companies face looming successor crisis
With the majority of CEOs in the mining industry at or nearing the age of retirement, the sector is facing a harsh reality: a gap in talent.
Four of the top executives at the world’s 10 biggest public mining companies are over 60. Rio Tinto, First Quantum, Freeport-McMoRan and New Gold have CEOs who are well over 60, but have refrained from commenting on retirement.
Visions of retirement packages and riding off into the sunset is becoming more appealing for executives as the industry continues to get battered by everything from sinking commodities prices to a general lack of financing. The end of innocence, for the mining industry, is here.
"There is a shortage of potential CEOs because the industry doesn't invest in people," said Mark Bristow, the 56-year-old Chief Executive of mid-tier gold miner Randgold Resources.
"Some companies will not survive because they don't have enough competence to operate as a standalone company,” said Bristow.
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According to Reuters, industry executives, recruiters and analysts worry there isn’t enough people with the right skills and experience to replace the old guard.
"It's a very limited supply of experienced people who know the industry and who have the capability of getting it out of the very difficult place it is in today," said John Byrne, managing partner at global recruiter Boyden World Corp.
Douglas Groh, a portfolio manager at Tocqueville Asset Management, said mining companies typically focus on building projects when they plot the future, not career paths.
"The industry is not good at succession planning. It is more in the moment.”
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The nature of the mining industry is undoubtedly a boom-bust situation, which in return makes recruiting and cultivating future workforces challenging.
"We have an industry where our core skill is eating our own seed corn. We don't bother to plant the corn, we eat it," said Benjamin Cox, the CEO of junior miner Aston Bay Holdings. "I'm a second generation mining executive; I wonder if there will be a third."
As more executives continue to contemplate retirement the need to concentrate on talent management has never been more prevalent.
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