Despite market volatility and softening commodities demand, Canadian mining companies should keep investing in their projects, according to a new Deloitte report.
Tracking the Trends 2013 finds that miners are continuing to face significant challenges, such as mounting costs and demand uncertainty.
Glen Ives, Deloitte Canada’s Americas mining leader, said companies need to keep thinking long term.
“[The issue of mounting costs] is expected to worsen in the short term as commodity prices continue to dip, workers demand higher wages and regulatory costs rise,” he said.
“But rather than halting production in the face of shareholder demands for more immediate returns, miners should be making investments today to meet the expected long-term demand for commodities.”
The report advises that miners set a solid strategic direction and “hold the course amidst shifting industry realities” in order to cash in a future rebound in commodities demand. It advises that companies should:
- prepare for increased mergers and acquisitions activity in 2013;
- strengthen relationships with local government to minimize the impact of growing resource nationalism;
- find innovative ways to deal with a looming skills shortage; and
- expand the use of information technology and data analytics to enhance safety, improve operations and reduce costs.