More change is on the horizon for global mining companies, a market that's seen its share of flux and volatility in recent years, outgoing Anglo American Plc Chairman John Parker said March 29.
Parker, speaking during the Financial Times Commodities Global Summit in Lausanne, Switzerland, said the industry has been somewhat slow to embrace digitization and automation to boost productivity and improve operations. But it will have to, and soon, he said.
"There is a transformation here that I believe will mean big changes," he said. "Technology-driven mining is going to be critical in the next decade."
Parker, whose company's interests include iron ore and metallurgical and thermal coal, was in a reflective mood during his talk, following the announcement last month that he plans to step down from his post. His comments Wednesday ranged from advice for an incoming chairman to Brexit to the factors that fueled the commodities crash a few years back.
Iron ore and coal prices, particularly metallurgical, have rebounded since. However, Parker said it's important that the industry learned lessons from the downturn, which he said was caused by "a supply crisis."
"We, as an industry, over-invested," he said. "Really, the most important thing is to ensure that your balance sheet does not get overstrained in what is an industry with plenty of shocks to shake it about."
Anglo American's strategy for navigating the downturn included paring assets and reducing debt. The moves better positioned the company to weather low prices and invest in new technologies to lift productivity.
Going forward, Parker said miners are likely to launch more joint ventures, rather than always going solo, and be cautious about the speed with which new deposits are developed. As for his transition from the chairman's seat, Parker said any successor needs to be "shock-proof."
"The volatility of this industry really does push a number of surprises through the boardroom door," he said, adding that remaining stable and calm are essential qualities.
One of Anglo American's newest shareholders, Vedanta Resources Plc founder and Chairman Anil Agarwal, who said earlier this month that he would take a 13% stake in Anglo, said during a separate discussion at the FT summit that he'd like to see Parker remain for at least a few years.
Parker expressed mutual respect for Agarwal, but seemingly brushed off the suggestion.
"He's a new shareholder in our registry. And he will be treated with the same respect as all of our shareholders, and that includes listening," Parker said of Agarwal. "You don't always get themes that are consistent across all shareholders, but you listen to them with respect."
When asked for his thoughts regarding Britain's exit from the European Union, Parker confessed he had been in favor of remaining.
"The vote went in another direction," he said. "The reality is we could talk from now until noon tomorrow about what might happen; the answer is nobody knows. The outcome is far from certain."
Parker said the U.K. has sufficient existing talent to weather the uncertainty and pointed out that there have already been some inward investments made in the region since the referendum. Now, it's time to galvanize around a clear industrial strategy.
Parker said he supports the free movement of trade, talent and investment across borders. "One senses that we're moving toward a more protectionist world right now," he added.