Challenges in the Mining Industry

The objective of the study at hand is to elucidate in detail a strategy for the long term period that can help in attainment of corporate objective of maximization of shareholders’ wealth in junior mining company (referred to as MinCo). The current study intends to address different ways of formulating sustainable ways of increasing prices of shares in junior mining companies. Also, this study intends to analyse whether it is plausible for the current strategies to attain the desired outcomes (Bettencourt et al. 2014).  Moving further, this study also intends to address whether MinCo is looking for the appropriate commodity in the right nations, provided their current status. Furthermore, this research intends to arrive at appropriate business strategies that Min Co can adopt for attainment of business objectives.

MinCo,that is a junior mining company belonging to the mining industry is necessarily going through a phase of uncertainty that is necessarily being developed owing to turbulence in commodity prices, volatility of prices, enhanced regulations, shrinking profits along with altering global demand.  This has affected the wealth creation process of shareholders of firms operating in this industry (Sambhanthan and Good 2016). Basically, this has pushed all the mining corporations to shift business strategies, undertake novel operating models and look for new and advanced technologies that can help in boosting overall production efficiency in a cost effective manner as well as safely.  

During the past decade, the mining segment is said to have dramatically changed, shifting from different conventional exercises to diverse mechanical exercises of mining. In essence, this kind of transformation has enhanced the operating efficiency and lessened the operating cost to certain extent (Brodie et al. 2017). However, together with the current fact, overall mining industry is encountering more complicated threats than ever before that are market driven or else nature driven, for example, prices of commodity as well as deeper ore bodies. In essence, the present requirement of the segment is to turn different challenges into genuine business value (Goh and Kauffman 2015).

The current study attempts to comprehend what is taking place in the entire mining segment and specific strategy that can be pursued to stick to the enhancing challenges. A swot analysis has been undertaken on particularly trend in the mining segment. There are certain areas of focus in the mining industry include:

Competitive Production: Effective planning is necessary along with help of advanced technologies to enhance the process effectiveness across the mining value chain starting from exploration to effective excavation to thereafter beneficiation and finally rehabilitation (Rothaermel 2015).

Data Sources

Measures of Health and Safety: It can be hereby mentioned that development and implementation of novel technologies in particularly health and safety operation is necessary to guard manpower as well as machinery (Miranda and Stowe 2017)

Upgrade of Mineral along with value addition: Determining minable resources along with mineral reserves in a cost effectual manner can also help in understanding effective and innovative strategies (Bosko et al. 2016). Superior grade reserves are observed to be depleting, therefore, in that case, processes need to be improved for the purpose of converting inferior grade resources into particularly high grade ones.

Resource effectiveness and inventive culture: Development and maximisation of different opportunities can be carried out by way of innovation or else automation (Becker 2017). This in turn is said to augment cross functional capability of the mining industry.

The current study intends to carry out a analytically evaluation of the junior mining company by employing secondary sources of data. The secondary sources of data include prior works of other scholars, books, articles as well as journals, industry reports, government reports, official websites, newspapers and magazines among many others. As correctly indicated by Sheremeta (2015), there are varied structured text (specifically, reports, outcomes of different previously conducted surveys and prior literature among many others) that collated as qualitative data for the research study at hand. Specific data that is utilized for the study for the most part include theory that points out towards definite set of diverse inter-interrelated themes, description along with propositions that can deliver systemic standpoints concerning events otherwise situations by indicating towards associations among different variables

A deductive research approach is undertaken for the purpose of the present study. Essentially, this can aid in formulating hypothesis for conducting the study that has the groundwork on subsisting premise, concepts and can help in formulation of a strategy for evaluation of the sketched hypothesis (Haladay et al. 2015). For itself, deductive approach is adopted for reflection of examining od premises of the study and for moving from interpretation from specific to specifically generalization of varied notions. In addition to this, there are several any causal relations else wise any kind of association appears to the signified by a particular theory, and then it might possibly prove to be true in definite cases. For that reason, deductive research approach can be considered to be a vital advance that can make examination of connection or association easier and help in deriving diverse generic state of affairs.  As a consequence, for the purpose of the current study, deductive approach can facilitate the process of formulation of particular hypothesis in practical way and propose links between diverse variables (Suwardy and Ratnatunga 2014). Subsequently, it is indispensable to consider the outcomes of the evaluation and arrive at conclusive judgements.

Methodology

For the purpose of the current study, a descriptive research design can be applied. In essence, this specific design of conducting study essentially can facilitate the process of exploring and elucidating while presenting important information on different matters linked to research topic under reflection (Couper et al. 2017). The study at hand undertakes this specific descriptive research design particularly because this utilizes secondary data together with comprehensive evaluation of formerly acknowledged evidences that are important to a huge extent.

For carrying out the present study, qualitative research technique can essentially be used for initiating the procedure of investigation into definite reasons behind specific behaviour (that might be ethical otherwise unethical) of individuals (Delery and Roumpi 2017). This study carries out extensive evaluation of prior case studies, procedures of thematic evaluation along with systematic measurement of past academic literature for scrutiny of the amassed qualitative data.

Analysis of data and illustration of business logic is carried out by scrutiny of prior literature presented earlier by scholars linked to current subject matter under deliberation.

Systematic review of prior literature: In this case, a desktop based research study has been undertaken for the purpose of analysing pertinent literature that comprises of recent reports, books as well as articles accessible in public domain. As rightly suggested by Leiblein et al. (2017),competitiveness of any kind of economic segment can necessarily be benefited by way of developing novel and advanced technologies together with automated customs of operating. With no exception this mining segment is also reliant on technology and unquestionably can be benefited by various developments in technology. As indicated by Galliers and Leidner (2014) Strategy of Mining can be described as the association between business of mining and its present as well as prospective business facets (Li and Liu 2014). In essence, it also ascertains the long run aims as well as objectives of particularly the mining segment and specific courses of along with suitable ways of management of resource for carrying the distinct objectives. Basically, there are varied strategy levels implied and are hereby shown in figure 1 below.

As suggested by Radomska (2015), corporate strategy illustrates overall scope of junior mining business and the specific market in which the business operates. Corporate strategies in this regard first and foremost takes account of exploration of options of novel acquirements, specific vertical integration along with allocation of varied resources between different units of business. As suggested by business strategy elucidates that the firm competes particular within the mining segment or market and for the most part concentrates on competitive advantage over competitors (Frølich et al. 2014). In addition to this, this study talks about efficient strategy that essentially concentrates on management of resources at mainly the operational level.

Data Analysis and Explanation of Business Logic

As rightly indicated by Bettencourt et al. (2014), the mining strategy validates that concerted technology improvement shall play a vital role for novel innovations and enhances the competitiveness of the entire mining sector. Different components engaged in the successful strategy scheme are effectual execution, long term possibility, uncomplicated and agreed upon aims, insightful understanding of overall competitive environment as well as resource allocation. Essentially, a scrutiny of internal along with external evaluation of a corporation or else an industry is a significant part of strategic planning procedure. In this connection, it can be hereby presented through a SWOT Analysis framework that is a vital and functional tool to be used in Strategic planning (Sambhanthan and Good 2016).

As per prior literature it can be said that optimal use of mineral resources can be attained by reworking as well as executing novel technologies by means of best mining exercises, thorough geoscientific research as well as development, investigation along with sustainability. In essence, these might consist of techno economic plus geoscientific improvement in the mining segment, reinforcing the method for regulating mining as well as limiting unlawful mining projects, enhancing the implementing of government along with private mining establishments, effectual management and enhancing performance, inspiring novel technologies (Brodie et al. 2017). This also involves efficient research and development schemes, maintaining associations and partnership with prosperous mining field nations across the entire globe, expanding mineral survey as well as exploration sectors by categorising of exceptional economic zones, distinct window power for mine lease substantiation, management of human resource and building of capacity.

Prior studies help in understanding trends in global mining industry. Trends in worldwide mining industry reflect the fact that in the current years different trends have stemmed in the mining sector (Goh and Kauffman 2015). This involves enhancing demand with regard to supply along with increasing the mining cost, expansion of different exploration actions throughout the entire globe, assuming progressive strategy measures to improve varied mining actions in their nations.

Analysis of these trends in the mining industry is establishing the manner of production and at the same time generating exclusive challenges. Again, in certain aspects and for potential stance, it is important for industry growth. Increasing challenges carry opportunities as a well-toned scheme is necessary to satisfy and deduce increasing challenges (Rothaermel 2015).

Bosko et al. (2016) suggests that effectual mining strategic judgements deliver the suitable operational activities for mining segment at the appropriate time. Essentially, mining segment nowadays handle unparalleled challenges, varied opportunities as well as threats. In this regard, it can be said that aim of SWOT analysis is to draw attention to important strengths, weaknesses, opportunities as well as threats for the entire segment by evaluating publicly accessible information. In essence, the SWOT evaluation shall decode conclusions into tactical acts so that mining sectors can implement opportunities and guard against different threats (Becker 2017).

As correctly mentioned by Sheremeta (2015), the methodology of analysing internal as well as external facets can be considered to be most significant for mining segment for upcoming period. This can help in understanding different strategic factors that again can be grouped under strengths, weaknesses, opportunities, along with threats.

Strength: Analysis of prior works and research studies has helped in identifying effectiveness of the present strategies of mining firm and aids in understanding their strengths. As rightly put forward by Haladay et al. (2015), junior mining industry is observed to have superior values and is said to be bestowed with considerable mineral resources that are available on the globe. Based on this observation it can be said that Minco is also said to have huge amount of mineral resources. Therefore, it is not imperative that every nation possesses abundant resources. However, every nation does have abundant resources but every nation plays an important role in the process of production as well as manufacturing resources by consuming in certain ways. However, an instance presented can help in explaining the factor. Australia plays an imperative role in the procedure of production of minerals at a worldwide scale. The nations that are essentially rich in certain kinds of mineral resources do not essentially make exploit all of their resources possessed by them alone. Conversely, nations can often be seen to export varied resource that they possess in abundance and import the ones that they need. Suwardy and Ratnatunga (2014) suggest that there exists a gap between operational sites as well as software technologies. As per Couper et al. (2017), this identified can be bridged by way of assimilated processes of planning along with optimization. Several advanced nations are also following this same procedure of operation. There are global procedures across the entire industry that can help in deriving clear path for upcoming growth.  Therefore, management of Minco can also adopt the same strategy for attainment of upcoming growth.

Again, skilled professionals such as geoscientists and several mining engineers among many others with cross functional competency are present in the specific market and can be entirely used. Management of Minco can also make use of skilled professionals that are present in the market for development of the operations of the firm (Delery and Roumpi 2017). Again, commercial mining investments as well as assimilating sustainability can be regarded as leading trends from worldwide mining corporations. Undertaking opportunities and at the same time maximizing various positive influences in various operational sites and assimilating sustainability principles can enhance the procedures to pursue growth and add values to the overall mining industry (Leiblein et al. 2017). Based on this observation, it can be said that undertaking this strategy can direct the way towards operational and functional efficiency along with savings of costs.

Weaknesses: As correctly mentioned by Galliers and Leidner (2014), inadequate management of risk owing to different internal as well as external facets in different mining industries such as unplanned incidents at different mining sites can lead the way towards grave production loss. This might direct the way towards cause injuries or else even prove to be fatal to employees. Essentially, this can delay different projects for period of long run or else even can direct the way towards absolute closure. Insufficient procedures and management of quality owing to resource constraints, constraints of schedule can lead to delay in supply of material supply and damage operations considerably (Li and Liu 2014).

Inefficient communication as well as management of stakeholder might stem owing to too late else wise too early communication with firm’s stakeholders, incorrect stakeholders in the specific project or every now and then the management shall not deliver for the involvement of stakeholders. In essence, this might possibly hamper overall transparency along with honesty in the stakeholder associations (Radomska 2015). Therefore, based on this observation, it can be said that management of the firm MinCo can concentrate on development of processes of communication with their stakeholders for development of operations. Essentially, innovative processes of communication can be developed in this regard that can subsequently direct the way towards development of operations.

 Analysis of prior studies reveals that there are several regulatory constraints that chiefly associates to acquiring mining as well as exploration licenses. The junior mining company also encounters the threat of acquiring licenses. In essence, these are mainly driven by both national as well as global governing authorities. Particularly, in present scenario, there are mining regulations along with exploration issues and these are said to be subject to alterations and is governed to a large extent by nation specific (Frølich et al. 2014). In essence, it is considered to be difficult for different worldwide mining corporations to deal with region specific regulatory associations. Therefore, based on prior observations it can be hereby stated that management of Minco can concentrate on regulatory constraints that are present in different nations.

In addition to this, mining segment is explicitly complicated owing to the extent along with range of different mining operations. Owing to the particular nature, effective safety is necessarily a chief concern for the entire industry. In case if not handled appropriately, it can present a potential risk to specifically health as well as safety.  As observed by Bettencourt et al. (2014), there are also frequent strikes along with carelessness that affects those adversely junior mining corporations. Also, inadequate training and frequent failures of equipment can lead to interruptions in operations. Furthermore, majority of the nations involved in the mining operations are pursuing old technologies. Founded on this observation, it can be said that management of MinCo can focus on implementing novel technologies. There are few business concerns that are concentrated on innovative strategies. Conventional manners of mining are widespread under developed nations and to certain extent in developing nations. Several corporations are said to be somewhat rigid in different developing nations (Goh and Kauffman 2015). There are different nations that are essentially rigid and can help in transformation from old exercises to new ones, probably due to investments. However, in long run investment in the process of innovation can introduce merriment in the business concerns drastically. Based on observations, it can be said that management of Minco can address the identified issues and think about investing in innovation for innovating operations.

Opportunities: As correctly indicated by Rothaermel (2015), embedding effectual administration, monitoring project risk facets can prioritize operational excellence as well as capabilities development at different mine operations. In essence, this can help in enhancing levels of efficiency of operations. Concentration on innovation can be considered to be important to handle present operational challenges and convert the same into different opportunities. Miranda and Stowe (2017) suggests that it is incredibly valuable throughout the mining business arena and this gets initiated from exploration of mines to processes of extraction, various safety, different environment along with mine closure. In essence, investment on particularly innovation illustrates vision of a company towards various futuristic opportunities. Management of Minco therefore needs to inspire openness for various novel approaches and undertake novel technologies in a bid to expand technologies as well as grow businesses (Bosko et al. 2016). Minco as a junior mining firm has the need to concentrate on different futuristic solutions instead of operating on subsisting methodologies. Again, MinCo belonging to this industry can concentrate on varied pain points and specific technology can play an important role in addressing all the identified pain points of the firm. However, it is not imperative for mining firms to develop all the requisite technologies. As an alternative, the same can be formulated in collaboration otherwise joint ventures with various industries such as information technology ITES and many others.

Threats: As rightly put forward by Sheremeta (2015), commodity price competition is observed to be a major threat among different worldwide mining firms. Similarly Minco also is also said to encounter this threat. As observed by Suwardy and Ratnatunga (2014), mining firms are necessarily going through volatility of both price as well as commodity. In essence, this might perhaps affect budget of the companies. For the case under consideration as well, it can be said that this factor is said to be a threat for the Minco as well.

Conclusions

Based on the SWOT analysis that delivers basic structure of important challenges encountered can help in improvement of performance of business of MinCo. A proper tradition of persistent enhancement as well as monitoring savings of cost and revenue augmentations in the segment can help in expansion of the mining business. Based on analysis of amassed data from prior studies and systematic review of literature, it can be hereby said that there are core segments that call for instant attention to concentrate on development of growth of mining industry. The study can help in development of Minco by undertaking eco friendly mining, lower cost of manufacturing as well as production, and compromising health as well as safety. Indeed, it can be attained by implanting sublime stratagem, novel technologies as well as innovative manner of operating.

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