Deloitte Global mining and metals report explores key trends shaping the industry’s future
NEW YORK, NY, USA, 30 JANUARY 2024—Released today, the 16th annual edition of Deloitte Global’s mining and metals report, Tracking the trends 2024, explores key trends facing mining and metals companies and how the sector is navigating a complex matrix of challenges, opportunities, expectations, and demands. Each trend draws on the experience of Deloitte’s worldwide network of mining and metals professionals, offering insights about how the industry is addressing critical matters such as supply shortages, environmental, social and governance (ESG), emerging technology, and the uncertainty of today’s global economy.
“Navigating the volatility in the geopolitical sphere as well as in commodity markets will not be easy for mining and metals companies in the coming months. But given that the sector touches the lives of people the world over, it is imperative that companies work to meet the challenges that lie ahead as well as actively build purpose-led organizations that fulfill their responsibilities to society.”
says Ian Sanders, Global Mining & Metals sector leader, Deloitte Global
Mining and metals navigating complexities and opportunities
Right now, stakeholders are hard-pressed to secure their supply chains as shortages in certain critical metals loom—metals that are vital to the energy transition. With supply alternatives such as urban mining, still in their infancy, downstream companies and even governments are striking deals with miners and metals providers in a reshuffle that has seen some traditional value chains realign over the past 12 months.
Organizations also remain under pressure to better the efficiency of existing assets and operations by embracing generative artificial intelligence (Gen AI), leveraging third party delivery models with specialized back-office capabilities and unlocking new value in assets. At the same time, mining and metals companies should continue to meet ESG expectations in day-to-day operations.
Collaborating with industry peers, suppliers, and competitors can help companies better tackle these pressing matters. And with strong business strategies in place and 2050 sustainability targets as the North Star, now is the time for the mining and metals industry to accelerate growth.
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 companies to achieve their objectives as they seek to capture and convey the value the industry generates.
Putting purpose at the heart of mining and metals—creating social momentum: With demand for certain critical metals outstripping supply in the near term, the mining and metals industry will likely need to seek greater capacity in previously unmined regions. As such, harnessing the power of purpose to build trust will be more important than ever. Purpose-led growth requires new value to be created for stakeholders and requires unequivocable buy-in from leadership. While many mining and metals providers are already influential forces for economic development, there is a tremendous opportunity for them to become greater instruments of progress.
Navigating global uncertainty—building capacity to thrive in the face of disruption: Geopolitical tensions, Gen AI, talent shortages, and the pressures of achieving net-zero are each converging to create an uncertain business environment—and mining and metals companies will have to become more agile if they are to capture opportunities and manage associated risks. Dynamic strategizing and embedding optionality can help enable mining and metals businesses to proactively adapt to changing scenarios and allow them to exercise different options as situations and priorities change. But as the forces shaping the mining and metals industry evolve, transparency and accountability will become ever more important to stakeholders and the best possible governance at the board level will be vital.
Dealmaking for future-focused growth—rethinking minerals and metals investments: Seeking to increase access to resources that could prove critical to sustainability and accelerate new production capacity, companies are exploring how strategic investments can fuel growth and bring important metals supplies online faster. To do this, companies should look outside of traditional investments to include joint ventures and strategic alliances, as well as think creatively about investment structures and who to approach for investment, such as governments, OEMs, and others throughout the supply chain.
Working toward net-zero—building capacity and future-proofing ESG strategies for a credible transition: As providers of the raw materials needed to create a sustainable future, mining and metals companies are perfectly positioned to lead the way in terms of sustainability. Organizations that act swiftly could be rewarded through enhanced resilience and value generation opportunities. But organizations should move beyond tackling emissions as a standalone issue and apply a broad and forward-thinking approach to mitigating climate change, including creating climate transition action plans, focusing on how to uphold leading practices, and looking to collaborate with their customers, suppliers, regulators, traditional owners, and competitors to create material change.
Collaborating with governments to rethink regulation—unlocking critical resources through permitting: In many parts of the world, permitting processes for mines span years or even decades. While it’s important that projects receive proper scrutiny, a new approach is needed to deliver critical minerals within a time frame that reflects 2050 net-zero goals. To do this, an optimized pipeline of projects with the right technologies should be developed along with an integrated and streamlined application and review process. It’s also important to do more than collaborate with Indigenous rights-holders through mandated procedures, but rather establish true partnerships that provide communities with direct participation in projects and the fruits of their successes.
Going back to grassroots—nourishing growth through investments in exploration: Major miners may need to start spending more on grassroots exploration instead of relying on the acquisition of a finite number of smaller exploration companies. To do this, organizations should look to better align their exploration efforts with their strategic directions and harness technologies, such as artificial intelligence (AI), to speed their identification and evaluation of targets. Also, investing in appropriate ESG training and implementing leading practices from day one will help ensure that potential risks from new exploration are well managed. Ultimately, both exploration and M&A have roles to play in growth but finding a balance between the two will be key to companies’ longevity.
Addressing workforce challenges through a skills-based approach—equipping mining and metals companies for the future: With skills shortages and an aging workforce looming, mining and metals companies would be wise to rethink how they address workforce challenges. One way is to switch the focus in organizations from roles to skills. With workplace agility and flexibility growing in importance, separating some work from job descriptions allows organizations to tap into the full range of workers’ capabilities and to find new ways of working. Industry players should also consider collaborating with universities to produce curricula and vocational education that align with the needs of the mining and metals sector.
Unlocking new value in existing assets—balancing complex priorities and meeting supply demand through operational optimization: The combination of operational technologies (OT) and advanced visualization and analytical tools are revolutionizing decision-making within the mining and metals industry and changing paradigms in long-standing functions, such as mine planning and maintenance. Leveraging OT to gather information, companies can re-create assets in the digital world, allowing processes and systems to be visualized and simulated. Both simulation and optimization can be deployed strategically, tactically, and operationally to determine which investments, scenarios, or processes may deliver the best value. Many software-based simulation and optimization programs are available for different mining and metals applications and can often be deployed relatively quickly and inexpensively.
Bringing Generative AI into mining and metals—capitalizing on current and future opportunities: Adopting Gen AI presents a range of attractive opportunities, including addressing energy security and improving profitability, generating operational efficiencies and resilience, and reducing emissions. The mining and metals industry can look to other industries already applying Gen AI for high-impact practices and use cases, such as how Gen AI can help companies navigate complex supply chains, unlock the value of data, and transform their workforces. Companies should determine what use cases are most relevant and can be scaled for the greatest return on investment. Mapping and prioritizing implementations in this way will also help establish whether a build or buy approach is best.
Third party delivery models—gaining agility and competitive advantage through next-gen approaches to outsourcing: With the current global risk landscape as well as supply chain disruptions, many companies are turning to third party delivery models (TPDMs) for certain business functions, such as cybersecurity, data and analytics, and ESG reporting, to fill capability gaps, drive value and agility, and provide end-to-end solutions. Given the cyclical nature of mining and metals, TPDM provides an attractive way to dial certain activities and their outputs up and down quickly. By rethinking operating models and outsourcing certain functions or tasks to third parties who have the latest knowledge and capabilities, as well as teams whose businesses center on delivering value in specific areas, mining and metals companies can dedicate more time, people and resources to core operations.
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