These organizations will need to consider the desired culture of the teams, defining what success looks like when the culture is in its desired state. While fossil fuels have helped to improve living standards around the world since the 18th century, their associated greenhouse gas emissions have led to global warming. Nevertheless, companies in the sector have reason for optimism, thanks to high prices for commodities from iron ore to copper. We have automated hauling. But better days lie ahead. Our research underlines how much has . To support the country's growing gold mining industry, we have opened a new commercial laboratory in Yamoussoukro. And this matters. But increasingly, because youre creating a bunch of infrastructure, usually in concert with other partiessome of them governmental, some of them other companies, perhaps competitorsyou have to create a workforce for many of these places. Markets are increasingly fragmented. The global imperative to support decarbonization efforts is forcing organizations to start rethinking the skills and capabilities needed to achieve the net-zero workforcea sustainable workforce that meets and supports organizations net-zero carbonization ambitions. Instead, the world will need more critical minerals and raw materials to power the global economy of the futureand these resources will need to be mined sustainably. David Hunter: What did that do to the production and profitability of the industry worldwide? Future of mining industry | Deloitte Insights Rising U.S. Lithium Industry: A Potential Quandary For - Forbes This rebound has placed the mining industry in the top echelon for five-year TSR, according to BCG's recent 2021 Value Creators Rankings. Current targets published by mining companies range from 0 to 30 percent by 2030, far below the Paris Agreement goals. For downstream intermediaries, the incentives for branding may be minimal, but consumer-facing companies have much to gain. Most mining companies have made a full recovery, and the industry finished 2020 with an impressive one-year median TSR of 26%. It was a little unexpected how quickly demand grew. Bad though 2020 was, its price swings were far less daunting than those seen during the global financial crisis. 5 out of 20 fastest-growing industries from 2019 to 2029 are in To learn more about McKinseys research on this and other topics, please visit McKinsey.com. (See Exhibit 5.) However, there are some "green shoots," they say. Overview Value added by the mining industry U.S. 2000-2021 Value added by the mining industry U.S. 2000-2021 Value added by the United States mining industry (excluding oil and gas). And compounding that with whats happening in terms of where we have to go to look for ore bodies, a fundamental phenomenon thats occurring is that the mature resource basins of the world, the places that weve historically gone to extract minerals, are depleting. Most mining companies are less prepared for future broad economic shocks today than they were during the global financial crisis and many prior crises. In this episode of the McKinsey Podcast, McKinsey partner Chris Mulligan and Mukani Moyo, senior expert, discuss the complexities mining companies face in far-flung locations and the impact of technology on productivity. For those performing essential services and therefore unable to work remotely, operations have focused on providing epidemic protectionensuring sanitation, personal protective equipment, and safety of the workplace environment. To support the teams when using digital tools, it is important that principles for decision rights, escalation protocols, and role accountabilities are clearly identified. So volatility is here to stay. In the top companies, digitization goes beyond mining operations and planning. It was the roads. In the first quarter of the year, widespread lockdowns hammered the S&P index by 30% and lowered commodity prices by double digits, eroding total shareholder return (TSR). SA hosts 25% of Australia's gold resources. Compared to a chip fab or something that will run 99 percent of the time, or maybe an offshore oil rig, which will be around 80 percent, the mining industry is more like 60 percent, and some parts, even lower. What can we learn from the decades top ten performers among mining companies with $5 billion or more in market capitalization? For example, applied in tandem with demand forecasts, advanced analytics can optimize production planning, the supply chain, and operations. 3 https://www.bcg.com/publications/2020/mining-needs-to-go-faster-on-climate. All qualified applicants will receive consideration for employment without regard to race, color, age, religion, sex, sexual orientation, gender identity / expression, national origin, protected veteran status, or any other characteristic protected under federal, state or local law, where applicable, and those with criminal histories will be considered in a manner consistent with applicable state and local laws.Pursuant to Transparency in Coverage final rules (85 FR 72158) set forth in the United States by The Departments of the Treasury, Labor, and Health and Human Services click here to access required Machine Readable Files or here to access the Federal No Surprises Bill Act Disclosure. The global mining equipment market size was estimated at USD 135 billion in 2022 and is expected to expand at a compounded annual growth rate (CAGR) of 5.1% from 2023 to 2030. Net zero and the energy transition will drive demand for metals. I think a big area of focus is going to have to be in building up the capabilities around lean operations, and asset productivity. 1 Similarly, BHP has launched a pilot project in autonomous shipping and deployed drones to increase onsite safety. And even though China is a resource-rich country, the amount of extra coal, iron ore, and copper, as well as a bunch of other commodities that China needed to consume in order to grow at the rates that it wanted to, entirely outstripped its own national ability to serve their own demand. Learn about Deloittes offerings, people, and culture as a global provider of audit, assurance, consulting, financial advisory, risk advisory, tax, and related services. Mining companies looking to capitalize on these trends will need to consider the future of work as they move toward integrated operations centers (i.e., Nerve Centers) that help guide decision-making across the value chain and reduce siloed behaviors. Metals and mining companies will be expected to grow fasterand more cleanlythan ever before. BCG X disrupts the present and creates the future by building bold new tech products, services, and businesses. Sales growth and dividend yield were the two biggest contributors to TSR growth. Recognizing that diversity is not only a moral imperative but also a business necessity is a fundamental step. Every sector is adopting new technologies to improve efficiency, achieve operational cost savings, and maintain sustainable growth, and the mining sector is no exception. Diversified players, which tend to be larger companies, produced a median TSR of 1%, the second best of any commodity category. Even though South Africa's short-term growth has been hit, its medium and long . In countries like Congo, mining of various minerals causes conflicts in . https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/path-to-net-zero-more-mining-companies-setting-targets-to-reduce-emissions-61626513. Operational monitoring and control systems have enhanced the productivity, safety, and . Today, as it continues its automation program, the company is also decarbonizing its fleet of haulage vehicles. New business models explain the success of some other top-ten performers. For example, Rio Tinto has implemented a mine automation system that includes a 3D visualization tool, as well as automated drilling systems and autonomous haulage trucks and long-distance rail. Those skills will become important. A Complete Mining Industry Overview: 2021 Data & Trends - Gethrough Certainly in the long term its cheaper, and the productivity has proven to be higher. Deloittes Tracking the trends 2021report explored the following action points for mining companies to optimize their digital journeys and unlock sustainable value: The future of work in mining is not only about introducing new technologies but also about considering what role these technologies will play and what work will look like in a new organization that imbibes these new technologies. Northern Star started as a relatively small company with a market cap of $120 million; it would be difficult for larger companies to replicate such success. Chris Mulligan: For some of the reasons that Mukani spoke about beforethe time frames for making investments before earning returns, as well as the scale of those investmentsit meant that perhaps people chased the investment opportunity too long in regard to the China supercycle. Muller plays an integral part in leading the Future of Work movement within South Africa by providing strategic guidance to business leaders on navigating the complexity of digital disruptions pertaining to changes in work, workforce, and workplace, and how to create exponential professionals. Global Mining Outlook 2022 - KPMG Global Please enable JavaScript to view the site. Companies in the sector are expressing renewed confidence, fueled by high commodity prices, fewer concerns about overcapacity, and a clear electrification trend worldwide. Mukani Moyo: One of the things that weve done in our research is to create the metric that tries to quantify productivity in a mining context by taking into account all of these inputs that go into a mining operation and also trying to disentangle those variables that a mining management team doesnt have control over. The devaluation or divestment of anything ungreen. Increasingly, investors, governments, and communities are voting with their feet in response to companies ESG. They recognize that its no longer an option; its a matter of competitive advantage. US Mining Industry | Mining in America - Industry Statistics How lithium mining is fueling the EV revolution | McKinsey Chris Mulligan: When we look at utilizationhow much a piece of equipment is actually used in terms of the time that its sitting on-sitemining, unfortunately, is among the lowest that we see across industries. Talitha Muller is the Future of Work program manager for Deloitte Africa and a member of the Global Future of Work Regional Leadership forum. Theyre building hospitals. It created a large global demand for many commodities, which others then scrambled to provide. Australia - Mining - International Trade Administration COVID-19 struck at a time when the mining industry was already grappling with multiple problems: lackluster financial performance; structural weakness; heightened uncertainty about the industry cycle; and growing pressure from investors, governments, and communities over environmental, social, and governance (ESG) practices. In the past decade, the greening of investment portfolios has gone mainstream, as more and more traditional investors divest from carbon-related businesses. Ongoing digital mine innovation is expected to transform the key aspects of mining during the next few years.