Extracting value: Sustainability the weak link in resources and minerals supply chain

  • A recent survey shows suppliers could do more to enable the mining and minerals industry to achieve their goals for sustainable development.
  • The challenge is for suppliers to remain engaged and not lose profit while contributing social and environmental value.
  • Lack of relationship and trust remain as hurdles to mining companies extracting value from their supply chains.

The mining and primary production sectors remain strong as businesses transition through COVID-19. Yet a recent study shows that Australian suppliers could play a greater role in enabling the mining and minerals industry to achieve their goals for sustainable development. Barriers that are limiting mining and minerals business' ability to maximise the contribution of suppliers to business outcomes, were a limited understanding of their client’s business’, insufficient time and resources to dedicate to managing suppliers effectively (from the mining company’s perspective), and preferred vendor status. When mining companies had successfully engaged with suppliers, the supplier understood the needs of the business and tailored its approach accordingly. The supplier could demonstrate how its own commitment to sustainable development would benefit the mining operation so understood the needs of their client. In short, the supplier created value for the mining operation by reducing costs and providing an improved solution (compared to existing solutions). The supplier also knew the life cycle impacts of its own goods and/or services on the mining operation’s business.

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