Mining and metals leaders will emphasise rising ESG, licence-to-operate, and an uncertain geopolitical environment with global disruption to put pressure on costs, productivity, and workforce, encouraging companies to seek opportunities to reshape business models and accelerate innovation.
FREMONT, CA: Mining and metals companies should navigate immediate challenges such as rising costs and supply chain disruption while progressing their transformation into purpose-led, low-carbon, digitally enabled organisations. Emerging mining and metals risks and opportunities reflect the competing priorities for miners in a fast-changing environment.
Environmental, social, and governance (ESG) remain the primary challenges, but they also broaden in scope and complexity. At the same time, global conflict and resource nationalism have pushed geopolitics on strategy. Global disruption to trade is striking the sector hard. In the coming years, miners will be under pressure to fast-track the supply chain transformation that was already underway before the pandemic.
The mining and metals sector will respond with more fundamental transitions to business and operating models in the coming years. New business models provide opportunities for miners to reposition for a changing future. Many companies will consider the benefits of strategies to rationalise, grow, and transform. Firms scrutinising and shifting business models can get an edge over competitors as demand and expectations change.
Environmental, Social, and Governance (ESG)
Today, integral to strategy, ESG’s scope is broadening, and pressure is increasing to improve reporting and transparency. ESG remains the top opportunity for mining and metals companies. It is integrated into corporate strategies due to its impact on almost every aspect of operations.
ESG is evolving, requiring miners to consider various issues and broaden their capabilities to manage them effectively. Stakeholders expect miners to assess and articulate opportunities through transparent, outcome-based measurement and assurance. More rigorous reporting will become crucial if companies meet growing stakeholder expectations and avoid accusations of greenwashing. Miners achieving this will get an edge over competitors in various ways, from accessing capital to securing licences to operating and attracting talent.
Global conflict and trade tensions reflect opportunities to strengthen relationships. The greatest opportunities under such conditions lie in forging closer ties with the government, increasing collaboration with stakeholders, including trade and sector groups, and exploring government incentives and co-investment potential.
Licence to Operate (LTO)
Connecting the brand to long-term impact can strengthen LTO.
LTO is increasingly complex, chaotic, and challenging to unravel. Miners face new expectations related to contributing to livability and protecting cultural heritage. Long-standing challenges, like strengthening indigenous trust, need more concerted effort. Enterprises should go beyond what is required by law and genuinely commit to furthering truth and reconciliation. Eventually, miners must reframe LTO around long-term value creation, linking the brand to this positive impact.
Growing expectations around ESG licences to operate and an uncertain geopolitical environment will top the agenda for mining and metals leaders in the upcoming year. Global disruption will add new pressure on costs, productivity, and the workforce, encouraging companies to explore opportunities to reimagine business models and accelerate innovation.