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Mine 2024: Preparing for impact
PwC’s 21st Mine report focuses on how the industry is planning for impact—retooling and reimagining itself to be a key contributor to sustainable growth.
There is rising demand for the metals that can be found in every smartphone, every car battery, and in the many products that enable the expansion of renewable energy technologies. But as demand for these materials increases, the mining sector faces shortages of critical minerals, environmental concerns, and the need to adopt more sustainable practices. Supply chain disruptions in the metals sector and geopolitical tensions have led to increased interest in reshoring and securing local supply chains.
By using smarter technologies, adopting eco-friendly methods, and focusing on recycling, mining & metals companies aim to close the gap in critical materials while protecting the environment. Through investing in innovation and in new ways to create value, the sector is not just meeting today’s needs—it’s building a more sustainable future for everyone. At PwC, we provide mining solutions to suit your needs, delivering value through innovation.
How will the industry adapt to the changing world?
The mining and metals sector is currently experiencing significant advancements, particularly in the areas of sustainability and technology. Companies are increasingly focusing on enhancing operational efficiency through the use of generative artificial intelligence and other emerging technologies. Additionally, there is a strong emphasis on meeting environmental, social, and governance (ESG) expectations, which includes improving safety standards and engaging in circular economy practices. These efforts are crucial as the demand for critical minerals continues to rise, driven by the global energy transition and the need for sustainable infrastructure.
The mining and metals sector has demonstrated its ability to achieve record profitability and growth. But miners faced a renewed stakeholder focus with a decidedly different flavor: it's not just what you mine but how you mine, how the materials are processed, and how they are used further down the supply chain. Mining is a highly profitable sector with a global reach, and stakeholders increasingly expect ESG transparency and reporting. Organizations that can build trust through ESG are more likely to increase their market share and access greater availability of finance. In addition, there is increasing pressure from end customers who want products to meet socially responsible standards.
With a growing number of companies and governments around the globe setting net zero targets, PwC expects demand for critical minerals used in batteries and other green technologies to grow in step with this transition. Miners that successfully position themselves to respond to this increased demand for critical minerals are best placed to succeed in the long-term net zero transition. However, over the short term, demand and supply imbalances will put pressure on miners and challenge their long project development timelines. Pricing will be volatile, and substitutions will emerge. Technology shifts will impact demand.New vertical entrants and shortening supply chains will challenge traditional business models.
The mining and metals sector of tomorrow will look very different from today’s. Digitalisation will transform business operations and mine sites. New skills are being called on to respond to demand for new minerals and to operate the expanding use of green technologies. The transition away from minerals such as coal will also play an important role as the industry seeks to retain existing jobs and attract new talent as demand for new minerals grows.
For many mine operators around the world, mine closure and decommissioning will be a key consideration in their ESG efforts. Industry surveys indicate that nearly 20% of currently operating mines are likely to close in the decade ahead (source 2) This poses challenges for mining companies but also for communities and governments on whose land they operate. To manage closures and decommissioning sustainably, miners will need to collaborate with stakeholders on financing, post-mining land-use goals and transitional support for employees and communities.
Source 2: https://www.icmm.com/en-gb/stories/2021/mine-closure-challenges-for-government-and-industry
Key trends impacting the industry
- Growing demand for new minerals
- Availability of free cash flow
- Acting on ESG delivers long-term value
- Tax transparency helps to build credibility
- ESG thinking opens new opportunities to grow through mergers
Growing demand for new minerals
Clean energy technologies critical in the global transition to net zero will require more mineral inputs. The International Energy Agency predicts that the world will need six times as much of those minerals by 2040 (source 3) to achieve net zero by the mid-century. Some minerals will require even greater increases in production. For example, demand for lithium for electric vehicles and other batteries is projected to grow more than 40-fold by 2040. Other high-demand minerals include graphite, cobalt, nickel and copper. For miners, the exploration and development of sites for these mineral groups will pose both a challenge and an opportunity.
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Global Energy, Utilities and Resources Leader, Partner, PwC Netherlands
Tel: +31-88-7921328
