Mining giant Rio Tinto said that companies such as itself need to find new ways to make the most of technological advances and build them into their partnerships, including everything from government contracts to the customers that they serve.
In a speech at the International Mining and Resources Conference (IMARC) in Melbourne on Tuesday, Rio Tinto CEO Jean-Sebastién Jacques will say that it is vital that the company collaborates better with tech giants to get more innovation into the sector.
Despite recovering well from the huge commodities setback in 2015 that triggered a deep recession, struggles are upcoming primarily from the current trade instability between the US and China, which has led to unexpected volatility in the market.
There has been a solid dip in the copper price, and mining companies such as Rio Tinto have yet to find ways to effectively diversify themselves to solve this problem. With investors pressing for answers, Jacques believes that mining companies need to carve out a new path.
He said it was key for ‘new forms of partnering’ to be about more than just ‘governments, society and communities.’ They would also need to factor in ‘partnerships with customers, suppliers and even competitors.’
One case that he cited was Rio Tinto’s partnership with tech giant Apple, through which they linked up with Alcoa to find a way to produce aluminum without encountering any issues with emissions. He labeled this as ‘an example of competitors working together to advance the future.’
Jacques also believes that working together brings companies much closer to huge tech breakthroughs, such as ships that can steer themselves. Innovations such as these are unlikely to be pioneered by just one company, but they can be utilized by many.
Rio Tinto has already been trying to use some autonomous technology, such as driverless trains. This has been trialed in Pilbara, and the company believes that it can reduce inefficiencies and delays if it can get over all the hurdles that have seen full implementation continually delayed.
Jacques also said that mining needs to find a way to shake up its image, given that the industry is “one of the least trusted on the planet” and that showing new tech solutions could make it more transparent and trustworthy.
As well as the general public, Jacques knows that his audience investors have also lost some faith, with the mining industry having overspent at the wrong time as a recession loomed for the sector. This meant that they spent plenty of money that investors never actually saw a return on.
With the world and media paying more attention to climate change at present, there is also a need for mining to show that it can cooperate with this and cater to the needs of institutional investors by allaying fears over the industry not being as clean as it should.
As technology offers solutions to most of these problems, Jacques also said that any partnerships should always enhance value and stop governments from creating a risk-averse industry.
He said: ‘If a community or government wants a bigger share of the pie, they may need to be willing to take on more of the risk.’ He called for the opportunity to ‘think about a different business model.’