OREANDA-NEWS. July 28, 2016. The mining industry has been good at cutting costs and improving efficiency. But it must work harder at adopting truly transformational innovation to ensure its global competitiveness, according to Deloittes. Releasing the Australian division of its 2016 innovation in mining survey, Deloittes said the sector was running out of ways to cut costs and improve efficiency, and must embrace innovation or risk suffering lasting damage, theaustralian.com.au reported.

Deloitte’s national mining leader, Nicki Ivory said the sector had been through an intense period characterised by price volatility, a slowdown in Chinese growth, difficulty in accessing capital, competition for capital from the renewables sector, and the need to address environmental concerns.

Deloitte’s consulting mining leader David Cormack said the sector faced the challenge of developing more transformational innovation involving breakthroughs and inventions.

That would require mining companies to push beyond the focus on product innovation and expand their view of where and how they can innovate.

“In order to drive higher levels of productivity and growth, mining companies must mobilise their innovation efforts beyond the technical research and development groups and into the wider organisation,” Mr Cormack said.

A key finding of the survey — carried out in association with the Diggers & Dealers Forum and the Association of Mining and Exploration Companies — was that the sector overwhelming believes innovation is a good thing. But the survey found that most companies still favour pursuing operational excellence, continuous improvement, and cost-reduction over investing in transformative innovation.

“Some companies are reluctant to take on additional risk associated with innovation, especially if it could impact cash flow or their licence to operate,’’ Mr Cormack said.