Gap in talent: global mining companies face looming successor crisis
Four of th...
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.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.