There are limits to mechanization in mining, and labor will always be a critical factor in this business. There are risks in excavation and working under the earth, and people who work in mines carry certain degrees of risk, no matter how thorough safety measures may be. Companies in the mining sector must always provide for technological upgrades to make their business safer, and to ensure that all workers are adequately insured, with the ability to provide for their families in the unfortunate event of a disaster. Top stock market investors never fail to assess these factors before buying into any mining company.
Managing people in the mining industry is not a matter of good intents alone. Companies which own mines in more than one country, have to contend with different standards and legislation with respect to Industrial Relations. All properties do not operate to the same standards, which can be an issue immediately after property and company acquisition. Labor unrest and union action can disrupt production, with cascading effects that go beyond an individual owner company. A mining company, which is not able to manage these risks effectively, is on the path to destroying its stock market value.
For example, Century Mining (CMM) from Canada has made an important innovation with respect to managing its Industrial Relations. This company formed by a team of technocrats and entrepreneurs, and which specializes in turning around mines which have not done well, shares ownership of its new property in Peru with workers. This creative move, at a single stroke, neutralizes the disadvantage of a North American company owning valuable property far away in the third world. It may not be a formula that can work on a universal basis, but it shows a path for management of other mining companies, plagued by confrontational relations with their labor forces.