John Chambers is executive chairman of Cisco. John Thornton is executive chairman of Barrick Gold.
Canada was built on its mining heritage. Today, the industry contributes about $54-billion a year to Canada’s gross domestic product – a driving force of the national economy. Yet mining lags behind other industries in one critical aspect: digital innovation.
That shortcoming significantly threatens the industry’s ability to meet future demands and survive in the digital age. By 2020, 75 per cent of businesses will be a digital business or preparing to become one. Companies that fail to embrace this trend will not survive.
Compounding this challenge, the mining industry faces lower commodity prices and maturing mines that are becoming more expensive to operate and less productive. In 2014, the combined value of the top 40 global mining companies shrank by $156-billion (U.S.), approximately 14 per cent.
Last year, Canada’s resources sector (oil, gas and mining) shed 15 per cent of all its jobs, nearly one in six workers. With the Canadian mining sector directly contributing nearly 375,000 jobs, this is a battle the country cannot afford to lose.
Mining needs to reinvent itself. The only way companies will cut costs and increase efficiency will be to embed digital technologies in every dimension of how mines are operated and managed. This transformation will require technology companies and the mining industry to partner together in new ways.
We are already seeing such partnerships take root. Last week, Cisco and Barrick Gold teamed up for the digital reinvention of Barrick’s business. Over the course of the partnership, Barrick and Cisco will bring digital capabilities to Barrick’s entire organization, from its mines around the world to Barrick’s head office in Toronto.
For the rest of this column, click here: http://www.theglobeandmail.com/report-on-business/rob-commentary/for-mining-companies-digitization-is-the-next-gold-rush/article31947408/