The metals and mining sector is currently recovering from one of the most difficult periods that it has encountered in decades. Due to increasing market volatility and downturn in commodity prices, now cost cuts, automation, and improved operational efficiency have become the new normal for the survival of metals and mining companies in the long-run. Furthermore, the industry has also been subject to several additional challenges including issues relating to regulation, geopolitical risks, and legal restrictions. Despite all these roadblocks, the metals and mining sector is expected to witness positive growth in the next couple of years owing to the increasing demand. Experts at Infiniti have identified key drivers that will transform the future of companies in the metals and mining industry in the years to come.
Metals and mining industry overview: key trends to expect
Transition to low-carbon economy
In order to meet the current energy transition, the demand for most minerals are expected to be on the rise. Furthermore, given the fact that low-emission energy and transportation systems are more mineral-intensive than their fossil fuel-based counterparts, the transition to energy-efficient options provides a great opportunity for the mining sector. Mining sector companies that power their operations with renewable energy, operate electric or hydrogen-powered truck fleets, and integrate recycling in their value chains will be best placed to sell low-carbon premium minerals.
New financing and production models
Companies in the metals and mining sector are trying to limit risks. As a result, new financing and production models will become more common in the coming years. Financing solutions such as royalty and metal stream agreements that are aimed at reducing the burden on the balance sheets of metals and mining companies will continue to gain momentum.
Geopolitical and economic risks
Metals and mining companies must gain a comprehensive understanding of the geopolitical and economic risks in their market. Factors such as resistance to globalization and free trade are creating a direct impact on the metals and mining sector. Furthermore, import restrictions on semi-finished products including steel and aluminium are at the spotlight of recent trade disputes. Such trade disputes and wars are likely to dampen global commodity demand and disrupt the value chain of mining and metals companies.
Revamping employee base
Modern companies in the metals and mining sector can revamp their employee base by maintaining an open dialogue culture in their organization. Furthermore, due to constantly evolving technology and business models, companies in the metals and mining sector will be required to develop new skills to sustain. Retraining and transitioning programs should be planned by companies in the metals and mining industry to attract new talent as well as to channelize the efforts of their employees to the changing market expectations.