Surface Mining: Challenges
Three clear challenges that are currently facing the global surface mining market are the industry's environmental impacts, intense levels of competition and various labor constraints.
- Perhaps the most widely discussed challenge facing the global surface mining industry is its environmental impacts, alongside more stringent associated government regulations.
- This challenge was identified based on the fact that a preponderance of industry researchers (e.g., Future Market Insights, Transparency Market Research, Research Nester, Market Research Future, MarketersMedia) are currently discussing environmental impacts as a major factor that is "hampering the growth" of the global surface mining market.
- According to Future Market Insights, surface mining is differentiated from many other forms of mining in that it generally has a more extensive and prominent impact on the surrounding environment.
- This negative environmental impact, paired with what Transparency Market Research, ResearchNester and Market Researcher Future describe as increasingly "stringent environmental regulations," are currently restraining the market's growth.
- However, companies in the industry are somewhat able to counter the environmental impacts associated with their surface mining operations by establishing clear safety zones around mining areas.
- Additionally, to the extent that developed governments are more aggressively expanding their focus on environmental safety, key players in the surface mining industry are also looking to less developed countries for growth opportunities in a more relaxed legislative environment.
- Another clear challenge facing the worldwide surface mining market is the intense competition between industry players.
- This market hindrance was selected based on the discussion of a variety of industry experts (e.g., Transparency Market Research, ResearchNester, Reports and Data, MarketersMedia), all of whom highlight the current level of fragmentation across the surface mining marketplace.
- Specifically, Transparency Market Research reported that the global surface mining market is highly "fragmented," and that many of its key players including BHP Billiton, Vale SA, Rio Tinto, Anglo American, Freeport-McMoran, Barrick Gold, Tech and Goldcorp are aggressively competing for market share.
- Notably, market fragmentation can create a number of adverse impacts, including trapping capital and liquidity, creating price competition and leading to other significant financial and operational inefficiencies, per the Institution of International Finance.
- However, Reports and Data highlights the fact that a number of prominent industry players are actively engaging in mergers and acquisitions to maintain or gain market share.
- This strategy of further consolidation is expected to help moderate the current level of industry fragmentation and have a "positive impact" on industry growth over the coming years.
- Finally, the labor constraints were identified as another clear challenge facing global surface mining operations, based on the consensus of market researchers such as Market Research Future and MarketersMedia.
- These labor constraints include not only the dearth of sufficiently skilled labor, but also increasing labor safety regulations.
- According to Market Research Future, surface mining companies are currently "struggling" due to these labor challenges, and factors such as the unavailability of skilled manpower are expected to hamper overall market growth through 2023.
- However, surface mining organizations are addressing at least part of this challenge by prioritizing the development and application of new technology, both to comply with the newest labor safety regulations, as well as to do so without sacrificing operational efficiency.
- Similarly, mining companies are leveraging different forms of technology to help offset the skilled labor shortage in key regions.
- Meanwhile, global consultancy Accenture recommends a variety of tactics that surface mining companies can employ to better attract and retain the newest generations of skilled mining labor.
Several other surface mining industry challenges were identified as part of this research, most notably: (1) the industry's relatively higher transport costs and (2) land acquisition difficulties. Specifically, Future Market Insights reported that transportation costs account for a disproportionately high 50% of total operating expenses for many surface mining players, but that "proper economic planning" is being employed to address this challenge. Additionally, Transparency Market Research asserts that issues in acquiring land are acting as a "restraint" on the global surface mining market. Although fewer publicly available and/or free resources were located to corroborate these challenges, the fact that both were reported by credible industry experts suggests that they may also be meaningful for industry players.