Opportunities and Challenges of Mining Industry

INDUSTRY PROFILE
REPORT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
Current Strategic and Operational Opportunities and Challenges of Mining Industry..........1
Sustainability of Mining Industry in the Contemporary Global Political- Economic Context2
Pyramid and Stages................................................................................................................2
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Industry refers to group of business who work in same business line. Mining is the
activity of extracting a precious thing or metal out of the ground or mine. There are four types of
mining - underground, open surface (pit), placer, and in-situ mining. Mining Industry concerns
all the organizations involve in this industry which extract precious minerals or geological
materials from the ground. Reports will highlight on Mining industry, its strategic and
operational opportunities and challenges and sustainability of mining industry. Report will also
focus on the concepts, theories and frameworks use by mining industry (Mikesell and Whitney,
2017).
MAIN BODY
Minerals can be referred to as one of reason of strong economic growth. There has been a
strong demand of iron and steel which benefitted the mining sector. Revenue of businesses
operating in the sector rose by 23% reaching upto $600 billion.
Current Strategic and Operational Opportunities and Challenges of Mining Industry
There are some strategic and Operational Opportunities of Mining Industry of UK as
there is rise in demand for resources for industry. Apart from this the opportunities are included
to as under:
Digitization- This is regarded to as one of the most important factor leading to gaining
insights into other countries market. Digitalisation will be helping into identifying and knowing
the preference and changing pattern into demand of customers. Mining industry could be
incorporating latest and advance digitalisation technology such as Automation trucks so that their
operations could be improved.
Differentiation in business model- There will be variety of opportunities in terms of
merger and acquisition this will be termed to as successfully integration of 2 organisations.
However in this opportunity it is very much important that firm is not only focusing on driving
financial profits but focusing on cost synergies and rationalising product line as well.
Integrated supply chains- This is the proper network of suppliers and factories through
which raw materials could be acquired and transformed to customers. The mining supply chain
will be extracting raw materials through transportation of all product to its end use customers. It
is required for the firm to achieve higher operational performance and efficiency into supply
chain process.
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Strategic and Operational Challenges of Mining Industry are as follows –
Some of the operational and strategic challenges faced by mining industry of UK and it is
required by them that they are identifying it on timely bases so that they could resolve it as well.
Access to energy- There are many areas where the resource will become depleted, under
this situation mining industry need to find out new frontiers of exploration. But for this miners
will require more financial resources so that they could be building up infrastructure and
improving service as well.
Health and safety- It is very much clear that working as professional into mining
industry will be calling for greater amount of risk for health and safety for those who are
working. These hazards include like that of chemical, inhalation, which are damaging human
body parts. This is regarded to as risk into mining industry which is due to increase in surface
temperature and unpredictable climate as well (Rangan, Chase and Karim, 2015).
Sustainability of Mining Industry in the Contemporary Global Political- Economic Context
The detailed description of the sustainability in the mining industry on financial and
economic grounds are as follows:
Political Fluctuations– it is has become imperative for mining operators to manage
political risk during their operations to sustain. It is very essential for a business to possess ideal
knowledge of fluctuation and change into government policies and then planning according to
the specified change mining industry could be sustaining into marketplace. With the help of this
mining firms could be able to build up their policies and brining certain level of changes as
well. As the contemporary world is very much complex and rapidly changes so for mining
industry it will become difficult to easily sustain.
Economic sustainability- There are numerous ways through which sustainability on
economic grounds could be assured. Primarily with the use of undertaking energy efficiency
approaches such as use of rope conveyor to bring cost of diesel trucks and emissions. Reducing
in the consumption of energy have proven to be highly economical for business organisations.
Conduct Market Research – Mining industry should conduct research on the basis of
weekly, monthly, quarterly, half-yearly and annually on global, national and local level so that
they can get the knowledge of every those aspects and factors of marketplace (directly and
indirectly affect the industry). This will lead the industry to take correct measurable
actions/steps for the future happening which can negatively impact the industry (Searcy, 2016).
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Pyramid and Stages
SUSTAINABLE DEVELOPMENT GOALS
It is also known as 17 global goals which are decided by the United Nations General
Assembly in 2015 (Sustainable Development Goals, 2019). Mining industry impacts those 17
goals. But there are some goals which mining industry impact directly. These goals are –
Innovation and Infrastructure, good jobs and economic growth, clean water and sanitation, and
climate action.
Innovation and Infrastructure – Industry should think about innovative process of
extract materials from ground so that infrastructure doesn’t get impact such as heavy rail
transport and tunnel boring. Also, industry should do infrastructure activities for the public and
environment. Like the centralised site automation will help in urban planning this will require
intelligent movement of workers and equipment for maximising while cutting down waste.
Good Jobs and Economic Growth – Mining Industry should create more job and should
invest their excess money in that industry where job opportunities are high. This will lead to
create more capital, more investment, more employment and more income. This all lead to high
GDP and growth of economy. As the UK mining industry is creating variety of products like
t6hat of metals, fossil fuels and industrial minerals so they are employing about 36000 people in
2013 producing £34 billion minerals.
Clean Water and Sanitation – During extraction work, mining industry should be
careful about the drinking water and non-drinking water. If they use water for the work so they
should find out the technique to clean the used water. Moreover, they should not throw their
wastage or dust in the water. Also they should make ponds, lakes and rivers to store water for the
public.
Climate Action – Economically development, Infrastructure development and climate
change are interrelated. If industry will try to harm the nature and infrastructure, this can lead to
natural disaster. When disaster happened, relative nation's economy growth get slow. So mining
industry should work for nature like they should plantation, they should promote biodiversity etc
(Hopkins, 2017). They must be consistent with their commitment to Paris Agreement and UN
sustainable development goal so mining industry should be following it carefully. It is require for
them to follow environmental goal framed around global sustainability agreement and
frameworks.
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CSR FRAMEWORK
Carroll Pyramid is the CSR framework, which was propounded by Carroll. Carroll
Pyramid explains that how and why mining industry should focus on their social responsibilities
(Carroll's CSR Pyramid, 2018).
This framework broke the whole responsibilities into 4 parts –
Economic Responsibility – Mining industry's economic responsibility is to make profits
through their mining activities as it is the only way through which survival and long term societal
benefits could be assured. There should be no wrongful ways to earn more and more profits.
Legal Responsibility – In this point, mining industry should follow the laws and
regulations of the government of the nation, where they are doing mining activities. Laws like
Employment legislation, equality act, health and safety act and Environmental protection act
should be followed by industry with strictly.
Illustration 1: CSR Pyramid
(Source: Corporate Social Responsibility, 2014)
Ethical Responsibility – Mining industry should treat every miners equally and
ethically. Industry should not differentiate between two communities or minors or people. They
should also fulfil the expectations of society by doing proper CSR activities.
Philanthropic Responsibility – This responsibility consist of improving the life quality
of miners, customers, communities and society. It can be done by providing job and fair
payment, charitable donations and undertaking infrastructural projects etc (Carroll, 2016).
STAGE OF CSR
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There are 5 stages of CSR -
Age of Greed – It is called Defensive CSR. In this stage, CSR is seen as protected against
the value of stakeholders of business/industry. They are greed about the support of stakeholders.
Thus, they do CSR activities to protect their organization/industry.
Age of Philanthropy – It is called Charitable CSR. Here, CSR activities is done by
organization/industry to do donations, sponsorships, charity, foundation of trust and participating
in events against social issues faced by societies and nation.
Age of Misdirection – It is called Promotional CSR. Here, CSR is adopted as one of the
promotional strategy. They misused the word “CSR” and use it to enhance their brand value,
customer value, sales value and goodwill for the industry or organization.
Age of Management – It is called Strategic CSR. Here, CSR is seen as the process of
management of organization. They do CSR as the part of management. Also, they made a
different department namely, CSR Department, whose focus is only on CSR Activities and
consumer benefits. Also they do CSR strategies which is only implemented for customers.
Age of Responsibility – It is called Transformative CSR. Here, CSR activities are seen
as to identify the reason behind the in-sustainability of organization/industry and remove that
cause so that they can sustain in long term (Idowu and Vertigans, 2016).
STRATEGIES ADOPTED ON CORPORATE RESPONSIBILITY
The stages of CSR are taken into account to further understand the strategies which are
implemented by Mining industries on corporate responsibilities.
Defensive CSR – Mining industry will use this strategy to gain their stakeholders'
supports. For this, industry can do various activities like – participating in employees and
customers beneficial activities, conducting stakeholders beneficial events etc.
Charitable CSR – In this strategy, Mining industry will do charity or donation to gain
their stakeholders' support primarily Communities. They can collect charity from various parties
and give it to charitable trust or can use this charity in that purpose for what this charity was
collected.
Promotional CSR – This strategy is adopted when industry when looking to promote their
brand or enhance their goodwill or customers' base. For this, they can do so many medi related
advertisements and promote those activities which can attract their stakeholders.
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Strategic CSR - This is adopted as a part of strategy so that they can grow and compete
their competitors. For that, they do every activities as a part of strategies implications. Also, they
do involve their internal stakeholders in their management team and decision making process to
gain their trust.
Transformative CSR – This strategy is adopted by mining industry for the improvement
the life quality of employees. In these, systematic activities related to CSR is being carried out.
Here they do social activities like – opening school, providing jobs, do plantation, do employee's
insurance etc with a part of their responsibility towards the society. (Asmeri, Alvionita and
Gunardi, 2017).
BUSINESS ETHICS
Business Ethics is an application of manners in the actions of mining industry. Business
ethics is successful in gaining attention of corporate customers which is good for the long
sustainability of mining industry. Also, it helps in creation of brand image. Business ethics create
moral environment at work place which teaches people to do differentiate between what is right
and what is wrong, which leads to fewer mistakes in work/performance.
Business ethics support employee growth which means satisfied employees (miners) and
promote team spirit. This will help the industry to grow more and sustain. Addressing all labour
issue must be their priority like many of the miners are paid poor wages so it is duty of industry
that they are providing good payment to them. Business ethics ensure the follow-up of law of
government strictly (Ferrell and Fraedrich, 2015).
STAKEHOLDER ANALYSIS
Stakeholders Analysis is the process of analysing the extent to which stakeholders will
get affected by changing in any aspect of industry. Analysis of stakeholders can be done by
POWER/INTEREST MATRIX which tell about the prioritization of stakeholders according to
the mining industry. This matrix have four quadrants which tell about the level of stakeholders
for industry. These four quadrants are as follows -
 Keep Satisfy – Those stakeholders who lie in this quadrant, who wants to be part of
mining industry but don't have the power to be in top stakeholders. So mining industry
can not ignore them because of their high interest. So they can communicate with them
according to the requires and satisfy them. Example: Government Authorities.
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 Manage Closely – Those stakeholders who fall under this category, need to manage
proper by industry because they have high power. If industry don't manager them proper
and on time, they will surely become the reason behind project failures. Like – investors,
employees of mining industry.
 Monitor – Those stakeholders who fall under this category need to be monitor (can't
ignore them). Because they are not concerned about mining industry's project. But you
need to communicate with them when it is important. Like – Communities or societies.
 Keep Informed – Those stakeholders who are least interest in mining industry's projects
can come under this quadrant but they have high authority or power to influenced the
industry. Like – CEO of every companies under this industry and shareholders (Lyles and
et.al., 2017).
CONCLUSION
From the above study, it has been summarized that Mining industry plays an important
role in the growth of economy. Mining industry should focus on their problems in the context of
environmental, economical, social and political at global level and CSR strategies so that
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Illustration 2: POWER/INTEREST GRID
Source: Power/Interest Grid (Matrix) for Stakeholder
Prioritization, 2019.

industry can sustain for long time. Also, mining industry should focus on their business ethics
and code of conduct which help them to grow more and sustain for long time.
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REFERENCES
Books and Journals
Asmeri, R., Alvionita, T. and Gunardi, A., 2017. CSR disclosures in the mining industry:
Empirical evidence from listed mining firms in Indonesia. Indonesian Journal of
Sustainability Accounting and Management. 1(1). pp.16-22.
Carroll, A.B., 2016. Carroll’s pyramid of CSR: taking another look. International journal of
corporate social responsibility. 1(1). p.3.
Ferrell, O.C. and Fraedrich, J., 2015. Business ethics: Ethical decision making & cases. Nelson
Education.
Hopkins, M., 2017. CSR and international development. In CSR and Sustainability (pp. 88-108).
Routledge.
Idowu, S.O. and Vertigans, S., 2016. Stages of Corporate Social Responsibility. Springer.
Lyles, A.A., and et.al., 2017. Stakeholders' Perceptions of Care Coordination: A Participatory
Process. Journal of Pediatric Health Care. 31(5). pp.555-559.
Mikesell, R.F. and Whitney, J.W., 2017. The world mining industry: Investment strategy and
public policy. Routledge.
Rangan, K., Chase, L. and Karim, S., 2015. The truth about CSR. Harvard Business Review.
93(1/2). pp.40-49.
Searcy, C., 2016. Measuring enterprise sustainability. Business Strategy and the Environment.
25(2). pp.120-133.
Online
Carroll's CSR Pyramid. 2018. [ONLINE]. Available through:
<https://www.tutor2u.net/business/reference/carrolls-csr-pyramid>
Sustainable Development Goals. 2019. [ONLINE]. Available through:
<https://www.undp.org/content/undp/en/home/sustainable-development-goals.html>
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