According to our annual evaluation of risks and opportunities in the global mining and metals sector, disruption is rapidly redefining the mining and metals sector’s understanding of where the largest obstacles – and avenues to development – may lie. Climate change and rising stakeholder expectations are becoming more powerful forces of change. Nonetheless, we see more possibilities than hazards for miners ready to make the transformative changes that may produce long-term value for businesses and the communities they serve.
1. Social and Environmental
Miners are working more to incorporate environmental, social, and governance (ESG) considerations into business strategy, decision-making, and stakeholder reporting as ESG factors become a higher priority for investors, shareholders, and a larger set of stakeholders. Stakeholder pressure on topics like biodiversity and water management is projected to increase, requiring miners to gradually plan for mine closures and better manage the water-energy nexus to meet expectations.
The global transition to a low-carbon economy presents both risks and opportunities for miners. There is a risk that demand for some minerals, such as thermal coal, could drop precipitously as countries adopt more aggressive carbon reduction targets. However, there is also an opportunity for miners to develop new technologies and processes to reduce emissions throughout the value chain – from exploration and mining through to processing, smelting and refining – positioning themselves as leaders in the low-carbon economy.
3. License to Operate
With growing stakeholder demands for transparency and accountability, miners will need to continue to improve their social license to operate (SLO) by demonstrating their commitment to responsible and sustainable business practices. This will require a focus on inclusive growth, community engagement and development, and effective environmental management.
4. Access to Land and Water
As the competition for land and water intensifies, miners will need to proactively engage with local communities and other stakeholders to ensure they have the social license to operate in an area. In addition, they will need to put in place robust policies and procedures to mitigate the risk of conflict over land and water use.
5. Resourcing the Future
The mining and metals sector is facing several challenges in relation to sourcing key minerals and metals – from declining grades to complex geologies and geopolitical risks. In response, miners will need to adopt a more proactive approach to minerals and metals sourcing, including securing long-term supply contracts, stockpiling strategic minerals and metals and investing in exploration.
6. Technology and Innovation
The mining and metals sector is under pressure to improve its productivity and efficiency in the face of dwindling reserves, declining grades and increasing costs. As such, miners will need to increasingly adopt new technologies and approaches – such as digitalization, automation and artificial intelligence – to drive operational improvements.
7. Volatile Markets
The mining and metals sector is exposed to several volatile markets, including commodities, currencies, interest rates and energy. In response, miners must diversify their businesses and product portfolios to reduce their exposure to market volatility.
8. Regulatory Change
The mining and metals sector is subject to various environmental, social and governance regulations. As such, miners need to be proactive in monitoring regulatory changes and ensuring they have the necessary processes and systems in place to comply with new requirements.
The mining and metals sector is facing several challenges in the coming years. However, there are also significant opportunities for miners willing to embrace change and adopt new technologies and approaches.
Newfoundland Gold is a Canadian gold mining alliance of companies dedicated to bringing awareness to responsible mining and innovative exploration and development. Find out what companies are a part of Newfoundland Gold, and find out how your company can be a part of Newfoundland Gold, too!