Global Mine 2022

Strategies for harnessing the critical minerals opportunity

Explore top takeaways

At a glance

  • The top 40 global miners posted a record result in 2021, with revenues up 32% and net profits rising 127%
  • Capital expenditures were up 18%, while dividends rose by 130%
  • Deal value and volume increased by 200% and 60%, respectively

Now’s the time to build on record results to explore uncharted paths 

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Miners need to create value amid market volatility, increasing demand and the race to net-zero greenhouse gas emissions

How long miners can continue their record run is uncertain, especially given the unprecedented change the industry is facing. Demand for critical minerals continues to surge, operating environments are getting more challenging and new players are emerging. What it means to be a miner is also evolving, and the next generation is fast positioning themselves to meet the growing demands for critical minerals, evolving customer expectations and the need to innovate to deliver higher value across the entire supply chain. 

Success will hinge on whether or not the industry can take a leading role in the world’s clean energy transition and continue to generate significant stakeholder value. To do that, miners must overcome obstacles including development timelines, price volatility, geopolitical risks, stakeholder expectations, economies of scale and economic resource scarcity. The rewards for the miners who emerge as leaders may be immense: demand for critical minerals is expected to grow over the next three decades. Some estimates suggest the annual critical minerals demand from clean energy technologies will reach more than US$400 billion by 2050. 

The opportunities for Canada

Among the countries that stand to benefit is Canada, which is positioned to be a world leader in the energy transition given our vast resources, skilled workforce, high standards on environmental, social and governance (ESG) matters and proximity to countries that need our critical minerals.

While miners will need to position themselves strategically and act quickly to stay ahead of the changing market dynamics, they’ll also be looking to the policy environment in Canada, which will play a significant role helping companies make the most of the critical minerals opportunity. Momentum around this is building, with the Government of Canada signalling its commitment in its 2022 budget to developing the critical minerals required for the energy transition. The landscape around this is evolving quickly, especially given recent incentives and investments such as the critical minerals exploration tax credit and the announcement of CA$3.8 billion over eight years to support Canada’s critical minerals strategy. While navigating the range of incentives available can be a complex undertaking, a strategic and considered approach can help companies accelerate their journeys around critical minerals.

Two technicians in distance discussing between long rows of photovoltaic panels.

The path forward for mining companies

To help mining leaders determine the path forward amid these unprecedented changes, we’ve identified four key areas they should be focusing on:

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Take a position on how to sustainably mine critical minerals

The shift to net zero will require more mining, not less. But resourcing the energy transition is not simply a matter of using existing methods to mine more of the same materials. Instead, the world will need more critical minerals and raw materials to power the global economy of the future—and these resources will need to be mined sustainably.

Pictogram of increasing bar chart with arrow pointing upwards and to the right, denothing growth

Take advantage of your financial strength

Incumbent miners with strong balance sheets, available financing and abundant free cash flow are in the best shape possible to drive the direction of the industry for decades to come. But despite their size and financial advantages, the window to maximize growth opportunities and create value is closing; miners must make their move quickly.

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Revisit deal strategy

As deal activity heats up, industry leaders are well placed to position themselves to take advantage of the rising demand for critical minerals. But with competition coming from multiple angles, they’ll need to think carefully about their next big moves.

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Double down on ESG

Every mining company is responsible for improving the trust that it builds with stakeholders and strengthening the mining industry’s social licence to operate.

Top takeaways for harnessing the critical minerals opportunity

Number one

Review exposure to critical minerals and materials for the transition.

Number two

Evaluate opportunities to own more of the supply chain and partner directly with original equipment manufacturers and local suppliers.

Number three

Incorporate low-emission technologies into operations to position yourself as a preferred supplier for carbon-conscious end users.

Number four

Increase transparency into ESG performance and stakeholder management.

Number five

Evaluate development models around shared infrastructure, potentially expediting development timelines and lowering upfront capital costs.

Number six

Prepare for a more challenging and assertive push by regulators.

Contact us

Lauren Bermack

Lauren Bermack

National Deals Mining Leader, Partner, PwC Canada

Tel: +1 416 815 5323

Monica Banting

Monica Banting

National Mining Leader, PwC Canada

Tel: +1 416 941 8233

Mark Patterson

Mark Patterson

BC Mining Leader, PwC Canada

Tel: +1 604 806 7160

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