Mining firms Need disruptive Innovation to Catch up: Survey
93% OF INDIAN MINING LEADERS SAY INNOVATION IS CRITICAL FOR LONG-TERM SUCCESS AGAINST 62% IN AUSTRALIA AND 59% THE USA
The beleaguered mining industry is banking on “disruptive innovation“to achieve the government's vision of self sufficiency and this burden lies on the companies, according to a survey by the University of Western Australia and global consulting firm VCI. Environmental pressures still weigh on minds of Indian miners more than their global peers but 93 per cent of Indian mining leaders believe that innovation is critical for long-term business strategy and success against 62 per cent in Australia and 59 per cent in the USA, the survey said.
Mining accounts for about 2.5 per cent of India's GDP. The sector has been struggling with problems relating to environmental and forest clearance approvals, opposition from local communities and land acquisition, which has impeded growth. The NDA government led by Prime Minister Narendra Modi is now seeking to attract investors to this sector to scale up domestic production.
Innovation State of Play, a platform created by international consultant VCI and University of Western Australia, conducted a survey of miners across the globe. The India report, titled How can India unleash its potential to become a world mining superpower, compiles views from 50 mining leaders of India's top nine mining firms including the Adani Group, Coal India Ltd, Jindal Steel and Power, Tata Steel and Vedanta Resources.
“To achieve the government's vision of self-sufficiency, it cannot just catch up to the rest. It must disrupt the whole industry,“said the report. Quoting a CEO anonymously, it adds, “India has to leapfrog. Fifty years of evolution has to happen in five years. Everyone in India talks about disruption, not innovation. It spills off the lips of the PM, the ministers... no one talks about job creation”. In the last two years, the Indian government has undertaken reforms and policy changes to make mining a more transparent activity.
Almost all pending mining and exploration concessions were made open to reapplication and all undeveloped blocks were ta ken back by the government and consolidated from previous disparate and less economic blocks. The government now auctions these mines through a more transparent process and hopes to attract investors from both India and abroad. The report quotes another CEO, “The steps they took were right — to inject transparency. There were some mistakes, but they were well intentioned.”
But many also suggesting that the government's approach “has killed necessary exploration investment“The government counters that it has and will “rapidly tweak its process until the necessary investment is achieved“. Rapidly refining regulations is not something `traditional miners' are comfortable with but if it works, it can have far-reaching effects.
“This focus on transparency has limited the government's attention on innovation, as it `focuses all of its current reforms on cleaning up the mining industry before it looks to facilitate further investment in technology or innovation in the industry'. In this sense, the burden of innovation has fallen squarely on the shoulders of private companies. It appears that these companies are accepting the responsibility with relish,“the report said.