The CEO of the world’s largest mining consulting firm says staff cost inflation and escalating project costs due to COVID travel constraints are likely to compress mining suppliers’ margins in 2022, even as higher commodity prices benefit metal producers.
Tim McGurk, who took over from Andy Barrett as group CEO in April last year, says availability of “talented staff” to support demand in mining remains a major challenge for service companies such as SRK and the wider industry. Government restrictions on free movement of people also continues to impact the work consultants typically do, limiting “opportunity and [creating] uncertainty for teams seeking to visit mine sites and to engage with clients and each other”, however, the ongoing global effects of COVID are also driving technical and technological innovation.
“Collaboration on MS Teams has changed the way we think we can work together” and focused attention on realising maximum value from face-to-face engagements, McGurk says.
“I think we will continue to build on the opportunities that digital working provides and create some exciting opportunities for new and enhanced services for clients, and opportunities for employees,” he says.
McGurk says 2022 shapes as a “very active, but difficult” year for SRK, with significant growth prospects in at least three main areas.
“Demand for integrated ESG expertise in mining projects will be a significant driver for projects for many years to come,” he says.
“Due diligence to support company acquisitions looks like it will be an active area in 2022.
“And helping clients demonstrate effective governance of their projects through application of [certain updated] international reporting and disclosure requirements [is another area of opportunity].”
The staff-owned global consulting group increased its headcount in 2021 to about 1500 from circa-1400 a year earlier.
“Company growth is intrinsically linked to our success in attracting some of the most talented engineers and scientists in the industry,” McGurk says.
For more insights into mining and METS trends from Tim McGurk and other industry leaders, order a copy of InvestMETS Leaders 2022.