The era of critical minerals has arrived, and it’s the most momentous change the mining industry has seen in decades. That means mining companies can no longer depend on yesterday’s portfolios and practices to create value. But what would a new formula for success in mining look like? In PwC’s Mine 2023 report—its 20th edition—our global team of analysts considers some of the big shifts that are playing out, and how mining leaders can respond.
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Mine Report 2023 video poster
Critical minerals: A new player emerges
Last year’s edition of Mine highlighted critical minerals as the commodity that will define the future of mining. Twelve months on, interest in the category has only grown, as nations have recognised the importance of these minerals. But geopolitical uncertainty has complicated the picture. In response to mounting demand and doubts about sources, governments around the world have taken swift action to form alliances, craft policies and laws, and fund initiatives that will stabilise their supplies of critical minerals. Their moves have altered the playing field for miners, intensifying competition and risk.
Three forms of government action
Alliances and agreements
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Government-to-government strategic partnerships or trade agreements centred on critical minerals collaboration
Policy and legislation
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Laws, policies or regulations created to protect, secure or drive growth in critical minerals and supply chains
Funding
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Direct government funding or government-backed funds to finance ventures in critical minerals and supply chains
Decarbonisation: A fresh source of value
Leaders recognise that mining plays a crucial role in the energy transition by providing commodities for renewable-energy and climate technologies. It’s also clear that mining and metals production, as practised today, results in substantial carbon emissions. As a result, mining companies face a dual imperative: to increase output of conventional and critical minerals while decarbonising mining, refining and production processes.
The good news is that existing technology and methods can decarbonise a significant proportion of mining, processing and production activity. Still better news: these technologies and methods can be applied across the mining and metals value chain to achieve cost savings and growth.
Deals: The race for critical minerals
Critical minerals transactions dominated deal activity in 2022 as miners big and small raced to reposition themselves for the energy transition. The value of critical minerals deals increased by 151% from 2021, accounting for 66% of all deal value in 2022. And deal strategy will continue to be central to the long-term success of large mining companies. These miners must closely monitor deal opportunities and value propositions as the M&A market becomes more competitive. As demand for critical minerals grows, miners will face continued pressure to establish competitive positions with respect to geographic footprint and asset balance.
Talent: Preparing for the future
The world’s big miners have a talent problem: according to PwC’s 26th Annual Global CEO Survey, almost two-thirds of mining CEOs believe that skill shortages will have a large or very large impact on profitability over the next ten years. Mining companies especially need talent who can work with the advanced technologies that are integral to modern mine operations. The mining workforce also exhibits wide gender gaps, with women holding just 14% of jobs in the industry, according to the International Labour Organization.
The talent problem is complex. Nevertheless, miners must act quickly to avoid the long-term consequences of a growing shortfall in skills. Focused efforts to reskill existing employees for digitised work and to create more inclusive working environments should help.
57%
of mining companies see recruiting as the biggest barrier to adopting new technology.
Source: World Economic Forum, The Future of Jobs Report 2020
Of the mining CEOs polled in PwC’s CEO Survey, 41% don’t think their companies will be economically viable in ten years if they continue on their current path. The era of critical minerals must therefore be an era of reinvention. To learn more about the path forward in mining, visit Mine 2023.
Mine 2023
The era of reinvention
The Energy Transition
Fuelling a resilient future through powerful alliances, greener investment and greater use of renewables
