In our 2015 survey, we were finally able to prove with data, what until then we had suspected – being a follower on innovation is likely to deliver lower incremental value over time.
Following leads to hesitancy, a lack of internal alignment and poor performance when implementing technology.
This year, through benchmarking and targeted global interviews we identified a few companies that have been outperforming their peers as quick, targeted, needs-driven innovation. This is the first of four case studies that I will explore over the coming weeks.
Sibanye Resources: Unlocking ore body value through innovation
“Our strategy is built on the fact that after 100 years of mining, there still remains more g0ld in South Africa than in any other region in the world… it’s about getting access to this.”
In 2013, Gold Fields spun out three ageing South African gold mines to focus on its suite of mechanised operations spanning three continents. Three years later, in May 2016, the company it created, Sibanye Resources, closed at a higher market value than its parent for the first time. By that point it had surpassed its parent company on share-price performance, production and dividends paid to shareholders.
Chief Executive Officer Neal Froneman attributed Sibanye’s success to five key factors:
- Deep, local knowledge of geology
- Mechanising through the use of close union and government relationships
- Breakthrough innovation in extraction technologies to reach reserves
- Involvement in industry collaboration (Phakisa)
- Countercyclical acquisition of assets
When it comes to innovation, Froneman says to keep it simple:
- Take your current approach and modernise it as much as possible
- Find and focus on your biggest lever for step change
- Don’t find excuses (research, getting your house in order) to not get started
This extract from the 2017 Innovation: State of Play Mining Industry report, is part of a 4 part series covering leading innovators and their key to success. The introduction to the series can be found online on our blog here. The report is on sale now.