NEW YORK, NY, US, 31 January 2023—Released today, the 15th annual edition of Deloitte Global’s mining and metals report, Tracking the Trends 2023, explores key trends facing mining and metals companies and how the sector is providing indispensable value. Each trend draws on the experience of Deloitte’s worldwide network of mining and metals professionals, offering insights about how the industry is making a difference in the world.
“The mining and metals industry underpins around half of the global economy and therefore, is well placed to positively influence social, environmental, and economic development,” says Ian Sanders, Mining & Metals sector leader, Deloitte Global. “It’s time for the mining and metals industry to tell the story of how the sector can provide for and enhance the prospects of the population and the planet—including the critical role it will play in the energy transition.”
Telling a more complete story
Meeting the growing demand for the metals and minerals that underpin economic progress is the story the mining and metals industry should tell. And with the global population on track to hit 9.7 billion in 2050, demand will only increase. Whether from civil infrastructure to transport, technology to agriculture, medical to science, the products of mining support many sectors globally. Most critically, without mining and metals, the energy transition will be considerably more challenging. Minerals underpin most climate change efforts, with demand predominantly stemming from building the new infrastructure required to change energy sources and from electric vehicles and battery storage. The latter alone is estimated to grow tenfold by 2040.[ii]
To overcome perceptions that may slow the flow of these key resources, mining and metals companies are putting people and natural capital front and center in their strategies. They are designing organisations and products for circularity, creating a regenerative ecosystem that finds value in reusing and repurposing materials throughout their processes. At the same time, mining and metals companies are continuing to collaborate and innovate to encourage technological advancement, collaboration, efficiency, inclusivity, and safety in the sector.
Top industry trends
Deloitte Global has identified ten trends that could impact the industry over the next 12 to 18 months. Each of these trends has a role to play in guiding mining and metals companies to success as they seek to capture and convey the value the industry generates.
- Generating a strategic advantage through natural capital: The metrics mining and metals investors base their decisions on are rapidly changing. Traditional calculations no longer provide a sufficient picture of the risks and opportunities presented over a project’s lifecycle and a more holistic approach is needed. As such, mining and metals companies are beginning to detail their impacts upon nature across their operations and value chains to enable an accurate valuation of natural capital in financial disclosures.
“Properly valuing natural capital can be used by mining and metals companies to better integrate environmental, social, and governance (ESG) targets into their strategies, operations, and projects,” says Sanders. “Not only can it help widen the pool of investors to which they have access, it can also start to change the narrative surrounding mining and metals.”
- The role of mining in a circular economy: Mining and metals companies are beginning to reconsider their traditional roles as metal producers, exploring how a circular economy (CE) model can help them capitalise on previously untapped sources of value. A CE model is decoupled from finite materials and is a more sustainable alternative that minimises negative impacts to people and the planet. But to reap the benefits of CE, mining and metals systems should reconfigure to keep metals in their most valuable form, design out waste, and maintain the health of the physical environment.
- Supporting the decarbonisation of economies: Value chain decarbonisation is one of the biggest challenges miners and metal producers face. Now many are collaborating to support or actively participate in research and development initiatives with downstream companies, in a bid to develop and accelerate breakthrough cleantech. Partnerships and investments are creating net-zero pathways that can help these organisations meet their own climate change mitigation goals.
- Speeding successful innovation for greater value: ESG in mining has acted as a catalyst for collaborative innovation efforts, driving companies to join forces to tackle problems, such as decarbonisation, that transcend the capability of any one organisation. Now mining and metals companies are taking the insights garnered from those initiatives and using them to scale and speed innovations across the value chain for maximum impact. Though not designed or accustomed to sharing data, the industry should look to overcome the stumbling blocks that have prevented innovations from reaching their full potential in the past.
- Securing future metals and minerals supplies: Mining and metals companies are taking a fresh look at fortifying their supply chains in order to safeguard raw material supplies that support other important industries. To better understand their exposure, companies are looking to AI-based predictive models that enable them to perform risk analysis, including cyber, geopolitical, and pandemic risks. In the past, security traditionally focussed on internal operational technology. However, now there is a push from mining and metals companies to incorporate security measures across the supply chain.
- Using systems thinking to drive next-level operational excellence: Driven by the global energy crisis and booming demand for critical minerals, mining and metals companies are stepping up their quest for operational optimisation. In doing so, there is an opportunity to provide even greater value to stakeholders, speak to new sources of talent and investment, and change perceptions of an industry that is thought to shy away from cutting-edge innovation. Mining and metals companies are looking to employ systems thinking, design, and modelling to build a more integrated and holistic approach to operations that also considers the impact of new energy sources, extraction methods, and processes.
- Solving complex workforce challenges through collaborative solutioning: The mining and metals sector continues to see workforce challenges as they navigate a fast-evolving labor market amidst a global shift towards purposeful employment. While companies are trying to better reflect the value of people and build ESG policies into corporate strategies to help attract talent, the skills shortage remains an industrywide issue. By bringing together multiple stakeholders across the mining and metals ecosystem—from governance, to regulators, to educational entities and private bodies—the industry can shape a multifaceted, enduring solution to talent sourcing.
- Making workforce health and safety fit for the future: Though embedded into mining and metals workplace culture, safety is ever evolving, and companies are considering new aspects that not only keep people safe but also build diverse, respectful, and inclusive workplaces. This includes better addressing both cultural and psychological safety, which encompass a respect for traditional custodians and their environments, the cultures and communities in which miners and metal providers operate as well as the value placed on diversity, equity, and inclusion. A culturally and psychologically safe workplace is helping mining and metals employees call out safety issues and bring their best selves to work while at the same time attracting and retaining diverse talent.
- Using tax and economic contribution reporting to change perceptions of mining: Whether operating in less developed regions or as part of an advanced economy, mining and metals organisations often find themselves to be a vital source of socio-economic development. With this role comes responsibility, and organisations can expect close scrutiny of their tax and wider economic contributions. Many of the world’s largest mining and metals groups are supplementing mandatory disclosures with tax and economic contribution reports. But external communications are evolving to represent the complete range of payments to governments across the entirety of the value chain. Companies are working to demonstrate their true value to society—a critical factor in changing the perception and trustworthiness of mining and metals companies and their activities.
- Building an industry that thrives through change: Organisations continue to boost resilience as the rate of economic, social, and environmental change will likely only increase in the coming decades. Mining and metals companies are drawing on technologies such as cloud computing that can help make structures, processes, and operations more dynamic and responsive to the challenges and opportunities disruption brings. Actions that support resilience can not only enhance their own longevity but also help secure supply chains that underpin a range of key economic activities, including food production, energy, and infrastructure.
“By harnessing an ecosystem mindset, mining and metals companies are successfully tackling value chain emissions and progressing a more sustainable global economy,” says Sanders. “And by helping other organisations decrease their own carbon footprints, there’s an opportunity for mining and metals companies to speak to various generations who are keen to work in a purposeful sector.”