This current period for the mining and metals industry is possibly one of the most difficult it’s had to endure. From market volatility to a decline in commodity prices, there’s been a need to cut costs and increase efficiency at the operator and technology levels. Not to mention various other challenges such as regulation, geopolitical risk, natural resource limits, shareholder activism, and public scrutiny. Without a doubt, there’ll always be a demand for minerals, if not more than before. However, for certain mining companies to thrive and succeed, they need to keep in mind these seven trends in the mining and metal industries to stay on top.
1. Shifting to a Low-Carbon Economy
Demand for minerals isn’t going anywhere. The desire for most companies and governments to switch to a low-carbon economy will require an energy transition that’ll need more minerals. In the 18th century, fossil fuels helped increase the standard of living and led to the first industrial revolution. Yet, they also added more greenhouse gas emissions into the atmosphere, creating the climate change crisis we’re dealing with today. To minimize this issue, shifting to a decarbonized system is the only way forward. Compared to fossil-fuel energy and transportation systems, their low-emission energy counterparts are more mineral-intensive. This creates an excellent opportunity for the mining industry, although it’s essential to consider that mining companies will also have to reduce their emissions to ensure a well-rounded, low-carbon economy.
2. Access to Resources
Just as space exploration has gained newfound interest, the need to go beyond the typical mining zones and explore the unknown is essential as prime, low-risk mining areas become depleted. Mining companies will need to use new technologies for extraction and processing or go into unchartered territories. Thanks to automation and digitalization, and technological breakthroughs, mining efforts will be more efficient and targeted. The socio-ecological fabric of innovation in extractive industries must consider an integrative approach to assess potential new business models, processes, and possibly external factors such as social and environmental ones too.
3. Financing Mines in New Ways
In the first decade of the 21st century, China triggered a commodity boom that sent prices plunging. Mining companies had to reduce debt ratios and improve their balance sheets while also minimizing risk. This led to new financing solutions such as royalty and metal stream agreements, and, to spread the risk, more capital-intensive projects will be needed. As the CEO of Rio Tinto stated, “Big miners need to reinvent themselves.”
4. Following a Social Contract
The mining industry has to be especially aware of what the local community thrives in. This will ensure a successful project and the possibility to gain a license to operate, which has been a significant challenge in recent years. Just take Greenland as an example. At the moment, the footprint left by the mining sector is vast. Not only has automation limited the employment opportunities at the local level, but it also adds stress to water levels and using insufficient and inefficient technologies and methods that contribute to climate change. Thus, new business models have to be created to keep the balance between a pleased local community and profit.
5. Making Way for Big Data
Transparency, in general, can always help build relations. When it comes to data transparency, this is especially crucial in developing relations with stakeholders. Collecting and processing massive amounts of data will be critical for mining companies to shift to smarter mines. Governments will probably push for disclosure of subsidiary structures to address tax base erosions. Consumers will want an increase in value chain transparency, and investors will want non-financial data to assess the risks in their mining portfolios better. Mining companies will see better relations developed with stakeholders at every level by having data more readily available.
6. Considering Geopolitics
We’re currently experiencing a period of trade wars, increased protectionism and popular resistance to globalization and free trade. This creates other obstacles, for example, many local laws are now requiring minerals to be processed before they’re exported. This directly affects the mining industry. Let’s also not forget the steel and aluminum dispute that happened during the Trump Presidency with China. While there’s no answer for how to navigate this situation best, it’s essential to consider and factor in geopolitics for future business models and processes and risk assessment.
7. Unlocking the Mining Workforce of Tomorrow
It’s no secret that the mining workforce is much older than other sectors, and they’re struggling to hire new, fresh employees. Couple this with new technologies that demand employees to learn new skills, we can see a critical turning point for the mining workforce at the moment. The best way forward would be to find employment for those workers who can’t pick up new skills or find innovative technology that’s simple and easy to use. With new technology and a new way to do business, the mining industry will also attract top talent that can drive its digitalization and automation processes.
At CyanoGuard, we’re on a mission to keep up with these trends by offering a solution that lowers your greenhouse gas emissions, offers transparent data, and is an easy-to-learn cyanide-monitoring solution. If you’d like to learn more, then please explore our solutions page.