Björn Rosengren, President and CEO of Sandvik Group, shares some of his extensive knowledge on the challenges facing the mining industry today, and how it could look in the future.
Originally published November 2017 in Solid Ground magazine.
As president and CEO of Sandvik Group, Björn Rosengren has a lot on his plate. But with his extensive history at the helm of Swedish industrial multinationals, he is the ideal candidate to expound upon the current and future state of the mining world in general, and Sandvik Mining and Rock Technology specifically. He was kind enough to share some of his time and thoughts with Minestories.
You have a long background within the mining industry. How does your experience shape your views of the industry today?
I’m pretty passionate about mining. I’ve been in the industry, more or less, since 1998. From my perspective, it’s a good industry to work with, particularly when you’re a world leader and well represented. I feel that for many of our customers, it’s not just a company selling and another customer buying; mining is built on strong relationships.
The mining industry appears to be rebounding from a prolonged decline, particularly with regard to commodity prices. How does the recent rally affect Sandvik?
Yes, it was quite a long downturn. The market coming back over the past year is actually a result of investments during that period. From my perspective, it’s not a big expansion in the industry. If you look at the output coming from the mines, it actually goes up 1 or 2 percent every year, and it performed similarly during the downturn. So it’s been consistent but because of low mineral prices, the mines didn’t make as much revenue and that affected capital spending.
Based on your experience, how and where do you think the mining industry should evolve in the immediate future?
Mineral prices will affect how mining companies behave. Speaking for Sandvik, we expected real expansion in autonomous mines since 2005. In fact, at the end of the ‘90s, we had a well-developed autonomous mining product offering. But with every downturn, cash flow becomes limited, which affects spending. Now that the mineral prices are performing well again, our technology has evolved. I’m 100 percent convinced that mines will quickly become more automated due to the available technology. The speed at which this happens may be determined by commodity prices, but the direction is very clear. We are fortunate to be a market leader when it comes to technologically advanced offerings. We have off-the-shelf products that can immediately help productivity, and most mining investments are about getting the tonnage out of the mines safely for less cost.
In mining and rock excavation, there’s always a big focus on sustainability. How do you think these industries can improve on this in the coming years and what is Sandvik doing to assist?
When it comes to sustainability, mining companies are some of the most watched in the world, particularly the larger ones listed on exchanges. They follow regulations, locally and globally. This is important because regulations and demands on the mines will be tougher, not least when it comes to their environmental approach and how they treat their workforce. Safety, too, is of the utmost importance. I think the technology that we’ve introduced into our products is helping customers to become safer and more sustainable; these things go hand in hand. Automation, more fuel-efficient engines, battery technology, these all help environmental conditions. Our ambition and the basis of our strategy going forward is to help our customers be productive and safe.
What part of the mining industry excites you most, both now and looking to the future? Why?
I like underground mining, particularly hard rock. That’s the sweet spot where Sandvik can deliver the most value per tonne being excavated. It’s also where you need the most advanced technology. When it comes to efficiency and productivity, this is where the focus will be. That’s the exciting part of mechanical excavation. The dream of every miner is to leave blasting in the past, as the logistics are so challenging.
The demand for commodities changes over time, with the emergence of different technologies and manufacturing methods. Will the mining industry have to change what it focuses on going forward?
Today gold and copper are the main two minerals driving most of our business. Silver, zinc and others are important too, of course. I think lithium is an area where we’ll see a lot of mining, although the resources are quite limited. Copper will continue, even though we’ve seen challenges in the prices. It’ll still be excavated a lot in the future. When you look at the excavation of minerals, many of them will be more difficult to access. They’re often deeper in the earth, so you have to be able to excavate more rock for the same amount of minerals. It’s human nature to innovate and find ways to excavate the minerals, even if that means going underwater. If there are minerals, there will be mining. The key is to do it responsibly.
In your mind, what sets Sandvik apart from the other businesses you’ve been a part of?
Our strengths are well known: Sandvik is a world leader with a broad equipment range, focusing on mechanical excavation and crushing, loading, hauling and drilling, both surface and underground. This is not so different from our main competitor. Over time, this changes. We will come up with innovative ideas and new products, but the great thing is when you have two such strong players, the focus on R&D makes each company better. It makes you unique, with a strong focus on new technology and performance. It provides quality for our customers, and miners are not prepared to compromise when it comes to quality