Predicitions for the year ahead
A sit down with EY advisors
The mining industry is grappling with escalating expectations from investors and stakeholders, particularly regarding Environmental, Social, and Governance (ESG) issues. A rapid shift from short-term returns to long-term value creation, including meeting 2050 net-zero goals, is compelling mining companies to balance ESG priorities along with ongoing productivity goals, while improving access to capital and building a strong license to operate.
On top of it all, there are increasing inflationary pressures amid a complex and interconnected risk landscape. There is no doubt this will require strategic, scenario-based planning to achieve sustained positive impact. Being able to convey both the financial and nonfinancial value creation achieved will be crucial to shaping the sector’s brand, building trust, and fostering transparent, forward-thinking legacies.
Failure to adapt to the changing landscape puts organizations at risk of lagging in a year expected to bring a significant resurgence to the sector through the energy transition. To aid in strategic planning for the year ahead, EY polled its Americas Mining and Metals Centre of Excellence expert advisors and technical mining professionals to gain insights into the most influential technological and geopolitical advancements witnessed in the mining industry throughout 2023 and to identify the key areas of focus for companies in 2024.
Alex Teijeira > Workforce and talent advisor
In the 2024 edition of the EY Top 10 business risks and opportunities report, a noteworthy connection exists between the foremost risk of the year, ESG, and its corresponding risk, workforce. To successfully address the former, the latter must continue to be a top priority for the boards and C-Suites of mining companies. Fortunately, many companies have demonstrated proficiency in managing diverse and global workforces, owing to their varied geographical operations. Nevertheless, enhancing the industry’s appeal to a broader, younger, and gender-balanced demographic will remain pivotal in nurturing innovation, helping to meet the industry’s future talent demands required to accelerate transformation and mitigate workforce-related risks.
Joseph Ashun > Asset management advisor
In 2023, significant progress was made in the integration of autonomous mining vehicles and machinery, resulting in heightened efficiency, productivity, and safety across mining operations. The adoption of autonomous equipment, such as truck drills, which can operate without human intervention, not only reduces operational risks but also enhances productivity, influencing the All-In Sustaining Costs (AISC) for miners. As mining operations expand into more challenging and hazardous environments by human standards, the imperative of embracing these technologies becomes increasingly evident.
Looking forward to 2024 and beyond, mining companies should remain committed to the advancement and refinement of automation and digitization technologies. This involves a strong emphasis on areas like data analytics and machine learning, harnessing the potential of analytical and machine learning algorithms to optimize mining processes. Additionally, the introduction of blockchain technologies has the potential to revolutionize supply chain transparency and traceability, ensuring ethical sourcing from mineral extraction to processing. To facilitate this transformation, investments in intelligent data collection systems and the training of skilled personnel for effective data analysis and interpretation are paramount. This, in turn, empowers miners to categorize, manipulate and summarize data for informed decision-making regarding safety, equipment maintenance, and more.
Patricia Jaworski > Maintenance and reliability advisor
The unpredictable geopolitical landscape and breakneck pace of technological advancements are the dominant forces in the mining industry now and moving forward. The ability to quickly respond to market dynamics, dictated by factors at home and abroad, and exploiting tech developments, such as adopting autonomous solutions as well as the integration of advanced data analytics and AI into practices, is a competitive necessity with critical prerequisites.
Continuously refining your organization’s assessment management approach, including formally adopting an asset management system per ISO 55000 standards, and business process compliance across functions are key. The organization can then optimally assess and respond to changes in supply and demand, and technology can be layered onto systems and processes with success. Conversely, if business processes are lackluster at best or an afterthought at worst, attempting to read and react to worldwide market forces or adopting the latest and greatest technological solution is akin to building a house on quicksand.
Trevor Kelly > Mine engineering and operations advisor
In 2024, mining companies face a plethora of priorities, both internal and external, that necessitate strategic attention. Among these, two pivotal areas warrant focus: the development of critical minerals and the implementation of automated mining systems.
The discourse on critical minerals is a long-term imperative that warrants immediate action. Since 2005, Canada has witnessed the establishment of four critical minerals mines, and an additional twenty two are slated for construction over the next 15 years, as per data from Natural Resources Canada. Companies must advocate for government support to facilitate the access and sustainable development of these new mines, meeting the burgeoning global demand for minerals efficiently.
Furthermore, these new mines should be meticulously designed and constructed, harnessing transformative technologies such as automation. Automation not only ensures the continued viability of existing brownfield sites but also lays the foundation for the creation of highly efficient, versatile assets, offering a broad range of workforce options and fostering operational efficiency.
Daniel Morales > Engineering advisor
In recent years, mining leaders have prominently prioritized ESG concerns. To effectively address these issues, they have actively sought and will continue to require strategic tools that harmonize their environmental objectives.
Now, as the challenge of securing capital intensifies, these strategic plans must not only cater to environmental aspirations but also ensure financial resilience and strength. In 2023, there is a positive development with the emergence of tools like stochastic mine plan optimizers. These tools are commercially available and go beyond merely maximizing net present value (NPV) by considering conventional uncertainties such as geology and prices; they also place a strong emphasis on optimizing environmental indicators.
Companies that incorporate stochastic tools into their decision-making processes for 2024 are poised to thrive in an uncertain landscape, exhibiting a forward-looking and adaptive approach to the evolving priorities in the mining industry.
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