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Mining leadership in a maelstrom: A conversation with Rowan Phendler

  • 4 July 2024

The global mining industry rode the China boom, reset after the GFC, has been jolted by a technology revolution and is now getting into the thick of an energy transition. Good time to be a mining CEO, right?

Resourcing Tomorrow 2024 is putting a spotlight on this question, with help from Cripps Leadership Advisors global head of natural resources, Rowan Phendler.

Phendler, who has worked with natural resource company boards and senior executives for the past 14 years, will head a Resourcing Tomorrow panel examining mining leadership in an era of arguably unparalleled change for the industry. He’s co-authored some must-read papers of late, building on discussions with mining leaders such as Dominic Barton, Mark Cutifani, Jody Kuzenko and Rohitesh Dhawan.

Beacon editorial director Richard Roberts caught up with Phendler to find out what he had learned from the interviews and where, and why, mining’s leadership conversation was shifting.

Richard Roberts: It would be good to get a perspective from you, given the interaction you've had with the industry during this latest 20-year window, on what you see as the three most significant shifts in mining industry leadership, and/or in leadership styles, in this period?

Rowan Phendler: Over the past 15 years I’ve spoken to countless leaders within the mining industry and I would say there have been four key shifts in the leadership.

Firstly, communication and collaboration.

The way that organisations and their routines are sculpted to execute upon work has changed. Most mining companies have a top-down, triangular hierarchy which works well in a relatively stable business environment. But these hierarchies create decision bottlenecks. In a fast-moving environment, this can mean that leaders find themselves with authority but without the information they need to make effective decisions. Today, a collaborative or collegial leadership environment that draws upon the knowledge and experience of a diverse team of people, and has routines built in to ensure that information flows up and down that structure effectively, is much more adept than a command and control set up.

Second, emphasis on sustainability and ESG.

Mining leadership increasingly prioritises sustainability and strong ESG practices. This shift is driven by growing awareness of environmental impacts, regulatory pressures, and stakeholder demands for responsible mining practices. With mining being in the spotlight and under scrutiny like never before the expectations of each stakeholder group have gone up, resulting in leaders adopting a more inclusive approach and involving various stakeholders – including communities, governments, and NGOs – in decision-making processes.

Third, bringing the outside in.

The mining industry is increasingly recognising the importance of workforce development and diversity. Attracting and retaining skilled workers, and ensuring diverse and inclusive work environments, are becoming critical priorities. Some of these key changes are a focus on skill development, diversity and inclusion, and health and safety. There has also been a significant shift into bringing the outside in. That is, talent from adjacent industries into mining.

This has to be one of the key shifts required for the industry to survive and bring in diversity of thought. Mining is archaic compared to oil and gas, and we have a lot to learn. 

Fourth, the focus on technology and innovation.

The integration of advanced technologies such as automation, AI and data analytics is transforming the mining sector, making operations more efficient, safer and cost-effective. This is resulting in a new wave of leadership requirements around being proficient and open-minded to change. Rio Tinto chairman Dominic Barton is a prime example of this, and it’s outlined in my recent paper.

Richard Roberts: How have these shifts been reflected in the way the industry is perceived/received by stakeholders? Obviously investors, generally, have liked stronger balance sheets, so-called capital discipline, and higher equity returns, but they probably – definitely – haven’t seen the level of consolidation many would like.

Rowan Phendler: The mining industry has garnered positive reception from investors due to stronger balance sheets, capital discipline, and higher equity returns, though they remain frustrated by the lack of significant consolidation.

Despite financial discipline the inherent volatility of commodity prices and geopolitical risks continues to pose challenges. Investors remain wary of these factors, which can significantly impact the performance and valuation of mining companies. The interrelated disciplines of environmental and social performance have coalesced with governance into a single concept — ESG — with formalised reporting and disclosure requirements that have become a priority for investors, stakeholders, and regulators.

This shift has pushed ESG issues to the forefront of agendas, but the industry is often seen as lacking in effective ESG oversight. Organisations are under increasing scrutiny from all angles, particularly from investors, resulting in very few large-scale private equity firms investing in mining today.

Despite financial improvements, historical environmental damage, labour disputes and community impacts continue to shape negative perceptions.

While continuous evolution and improvement in ESG practices could attract new pools of capital and gain community acceptance, executives and boards must consistently apply a sustainability lens to all company activities. This holistic approach is essential to boost investor confidence, meet evolving stakeholder expectations and ensure the long-term success and reputation of mining companies in a rapidly changing landscape.

Richard Roberts: On the consolidation tangent, is the industry's top and particularly mid-level talent stretched too thinly across the larger groups? Or is there more quality competition for places than ever before?

Rowan Phendler: The mining industry's consolidation trend has made top and mid-level talent spread thinly across larger companies. This often happens without adding more staff, putting extra pressure on current leaders. At the same time there’s more competition for jobs than ever before, as companies now want people with specialised skills in areas like sustainability and technology. This has made the job market very competitive. Companies need to balance these challenges to make the most of their workforce and grow sustainably.

Candidates coming from the major and mid-tier houses are also disinterested in joining the junior mining market due to the lack of capital and price volatility, resulting in a significant consolidation of talent within the bigger firms. 

Richard Roberts: If it's been an important evolutionary phase in industry leadership and style, what must the next stage bring: more emphatic change? Is broad technology literacy, including the related risk culture, the biggest gap for the industry, and maybe the most critical given the industry's recruitment needs and challenges?

Rowan Phendler: Today, a collaborative or collegial leadership environment that draws upon the knowledge and experience of a diverse team of people, and has routines built in to ensure that information flows up and down that structure effectively, is much more adept than a command and control set up.

This goes back to the first question in which leaders moving forward need to be able to foster strong communication and collaboration, and less command and control. They need to put emphasis on sustainability and ESG, for investment, stakeholders and general perceptions in the market.

They need to be open to bringing in talent from adjacent industries and most importantly open to a diverse team that has proven to increase productivity and revenue.

And there needs to be a massive focus on technology and innovation, resulting in a forward-thinking company and one that is less archaic.

The firms successful in doing this will be a much more attractive option for candidates. The majors have generally done this very well, but it is still lacking within the smaller firms. The old school mentality of having candidates with only mining experience has to be a thing of the past. 

The mining industry has always placed an emphasis on roles when recruiting, but I believe that shifting the focus towards skills could create new possibilities. A good example of this is the high demand for heavy equipment operators. The mining industry tends to search internally for candidates to fill these positions, or in sectors such as oil and gas. However, if companies were to focus on the skills needed to perform those roles then the talent pool widens significantly.

We must look at how we can compete with firms such as Apple, Google and Microsoft. The abundance of talent available, from executives to machine operators, drivers and maintenance personnel, is massive, and we are missing out.

Richard Roberts: Has the industry lost a lot of the risk-taking daring that defined it in the 1960s and 70s, and earlier, and is that a good or bad thing?

Rowan Phendler: The mining industry has become more risk-averse compared to the daring ventures of the 1960s and 70s, leading to both positive and negative outcomes.

On the positive side, this shift has resulted in improved safety and environmental standards, greater financial stability, better regulatory compliance, technology, and an increase in diversity within the workforce, bringing in a wider range of perspectives and skills.

However, the reduced appetite for risk has also led to a decrease in exploration, and potentially less competitiveness, with some investors viewing the industry as lacking ambition. Overall, whether this change is beneficial depends on how well the industry can balance maintaining stability with seizing new growth opportunities.

Personally, I think the shift is exactly what the mining industry needed and it is with organisations like the ICMM that we can enact real change and development.

Richard Roberts: What have been your two top takeaways from the recent discussions you had with industry leaders that fed into the series of papers Cripps has put out?

Rowan Phendler: I would say the trends toward adaptability and humility, and building a learning culture.

The traditional command-and-control leadership style is no longer appropriate in the mining industry's evolving landscape. Leaders must bring qualities such as humility, curiosity, empathy and courage to navigate uncertainty and foster innovation. This means being open to diverse perspectives, embracing new ideas, and leading with a collaborative approach, both internally and externally, rather than relying solely on expertise and authority. Mark Cutifani, former CEO of Anglo American and now chair of Vale Base Metals, emphasised the importance of creating spaces where leaders can engage with others, listen actively, and learn from different viewpoints. This adaptability allows leaders to effectively lead through complexity and change.

And then, to thrive in a rapidly changing environment, mining companies must cultivate a culture of continuous learning and experimentation. Torex Gold CEO Jody Kuzenko highlighted the value of a feedback-rich culture where leaders can learn from successes and failures alike. This involves providing opportunities for leaders to expand their knowledge beyond their immediate expertise, engage with diverse stakeholders and adapt their strategies accordingly. Creating such a culture not only enhances leadership capabilities but also enables organisations to innovate and respond effectively to emerging challenges.

Richard Roberts: On the upcoming Resourcing Tomorrow panel discussion, how timely is it to be talking about group think and breaking out of the echo chamber? As in, are leadership styles and actions in the industry – among a sufficiently large cohort of the industry's leaders – now reflective of the messaging that has been coming out vis-a-vis ‘new’ ESG, safety in all its forms, diversity, waste, recycling, etc, or is it just that the conversation within the industry needs to get a lot louder so more people outside can hear it?

Rowan Phendler: I think it has moved to be much more reflective but we as an industry have a lot to still change and adapt to.

The conversation needs to get louder, and we must get the buy-in from governments, education and the general public. We have a long road ahead and will require industry leaders, politicians, and influencers to helps us get there.

A prime example was the World Gold Council’s documentary on gold with Idris.

Rowan Phendler
Rowan Phendler

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