The resources industry has struggled to learn from repeated mistakes as it rides Australia’s boom and bust cycles, according to a prominent industry commentator.
MBA director and professor at the UWA Business School, Dr Allan Trench, was commenting ahead of a ‘big issues’ summit day to be held as part of the inaugural four day convention of the Australia Geoscience Council in Adelaide on October 15.
“My hypothesis is that many investment decisions – or just as importantly, the lack of new mining investments periodically – inadvertently act to drive an exaggeration of the commodity cycle,” Dr Trench said today.
“Few boards of the resources majors seem inclined to invest, for example, during a downturn.
“But on the other side of the ledger, these same boards seem to have a habit of paying too much for assets in the ‘good times’.
“It seems obvious we struggle to collectively learn as an industry from these repeated mistakes.”
Dr Trench said geoscientists became little more than ‘cannon fodder’ each time the mining industry elected to take a turn for the worse.
“It is difficult at any time to prevent the impacts of the forces of supply and demand that drive the rise and fall of commodity prices over time,” Dr Trench said.
“However, there is an obligation on the resources industry and its board-level decision-makers, to have more positive influence on the challenges such cyclical periods throw up.
“There is even an onus on geoscientists and other industry technical professionals to ask themselves what more they could do to mitigate or avoid being in the firing-line when a downturn hits.
“They may have for example, the opportunity to learn additional skills beyond technical excellence in their respective disciplines.
“We would need to ensure however, that such multiskilling does not rob the mining and energy sector permanently of the key expertise it needs to develop and operate ever more complex and dicult ore bodies or gas and oil basins in the future.”
Dr Trench is also a non-executive director of several ASX-listed minerals companies and a representative for the independent metals and mining advisory, CRU Group.
More than 2000 delegates are expected in Adelaide for the Australian Geoscience Council Convention (AGCC 2018).
For more information, visit www.agcc.org.au.