Economic Trends in Mining

What does an industry facing a 600% increase in demand do? Severely curtail CAPEX. You might think this sounds implausible, and yet the #mining and metals industry have significantly reduced CAPEX over the last decade. In 2013, the 40 largest mining firms globally delivered a combined $130 Billion USD in CAPEX, breaking records as this exceeded 80% of EBITDA. Meanwhile in 2022, this same group invested only $75 Billion, representing just 25% of EBITDA. Decarbonizing the global economy is estimated to require more than 6.5 Billion tonnes of metals between now and 2050, and while the spotlights today are on lithium and nickel for batteries, this is only one small part of the total demand. Copper is required in massive quantities to upgrade electric grids and networks. Aluminum, Cobalt, Graphite, and Platinum forecast exponential demand increases as well. The Economist ask the curious question "given this massive surge in demand and profitability, why are mining companies reluctant to invest?" Firstly it is about ROIC. New projects are forecast at 7%, which given the risk does not generate much appetite when lower risk corporate debt is trading over 5%. Development costs are also surging. Canadian group Teck Resources notes that it is costing over $9 Billion to develop the Quebrada Blanca 2 copper mine in Chile, double the estimate in just 2019. Meanwhile, the time and complexity to receiving permits has also increased significantly, adding to both the risk and expense of projects as well as delaying cash flows necessary to support major investments. #China meanwhile are plowing full speed ahead. In the first half of 2023, China invested more than $10 Billion in international mines, 130% more than than the first half of 2022. Today 9 out of the 40 largest mining companies are Chinese, with operations expanding in Bolivia, Botswana, Serbia, and Indonesia. Environmental and #sustainability concerns are also increasing. While today the environmental impacts of mining can be minimized, and scrap reduced with technology including machine learning and AI, there is still much to be done. How well does your Strategy forecast future impacts on supply, demand, and the dynamics with drive your ROIC? What do you think America and the European Union can do to accelerate their sustainability and performance in mining and the energy transition? Strategy is Mastery. https://lnkd.in/dZxfv_Yw

The global shift to clean #energy, electrified #transport, and modern #infrastructure is gaining pace. But there’s a growing challenge behind the progress, we do not yet have the #rawmaterials at scale to meet what the energy transition demands. By 2030, we face significant projected supply shortfalls in the materials essential to this transformation: →Natural graphite: 46% deficit →Cobalt: 42% deficit →Lithium: 34% deficit →Nickel: 21% deficit →Copper: 15% deficit These are not abstract figures. These materials underpin the industries driving net zero forward: →#Automotive: EV batteries rely on lithium, cobalt, nickel, and graphite →#Renewables: Wind turbines and solar panels depend on copper and specialty metals →#Technology: Devices, semiconductors, and servers require nickel and cobalt →#Utilities and #infrastructure: Copper is critical for modernising power grids →#Aerospace and #defence: Graphite and nickel support high-performance systems Over €644 billion in mining and processing investment is needed by 2050, most of it by 2030, to close the gap between ambition and capability. But the solution isn’t just more extraction. It’s about investing in sustainable, transparent, and resilient supply chains that balance environmental responsibility with industrial growth. Strategic leadership is needed across sectors: →Deploy low-carbon, resource-efficient extraction methods →Invest in recycling and circular systems to reduce material waste →Secure diversified and ethical sources to mitigate geopolitical and ESG risk →Align capital allocation with long-term climate and energy goals From automotive to tech, energy to finance — this is a cross-industry challenge, and the window to act is closing fast. The clean energy transition is not a distant future. It is already reshaping markets and redefining value. Those who lead with urgency and foresight will define the economy of the next generation. #energytransition #sustainability #criticalminerals #cleantech #futureofenergy #mininginnovation #automotive #technology #renewables #esg #netzero #strategicleadership Visual: Appian Capital Advisory LLP Data: International Energy Agency (IEA), Benchmark Mineral Intelligence, BloombergNEF, Wood Mackenzie

⚡️ With our latest publication, we take a deep dive into the metals & mining sector, exploring long-term demand, financial performances, and investment patterns amidst the ongoing energy transition. Find out more on how to navigate these trends effectively: 💱 Demand for metals is skyrocketing, but uncertainty and price volatility make companies cautious. According to the IEA, demand could double (or even triple) in the coming years, with copper and lithium being in high demand. However, timing the increase in supply is crucial to avoid price slumps caused by oversupply. 💹 Speculative behavior is on the rise, posing risks to metals and mining firms. Speculation on certain metals, like copper and cobalt, has increased significantly, while lithium speculation has declined due to recent price drops. 🛠Exploration needs to step up as mining lead times are getting longer. Some metals are at risk of falling into a supply gap, requiring more investments in exploration and new capacities. Exploration budgets have declined, hindering the sector's ability to close the supply gap. 🌍 Governments should foster alliances with mineral-rich countries to bridge supply gaps. De-risking projects and investing in technologies for faster and more efficient exploration and mining are crucial. Recycling should also be prioritized by governments and companies. 💡 Alternative technologies should drive innovation and strategic planning. Delaying investments in green technologies may incentivize substitution technologies. Strategic planning and innovation should be at the heart of the metals and mining agenda. https://lnkd.in/evrhtPFw #criticalminerals #mining #supply #minerals #raremetals #ludonomics #AllianzTrade #Allianz

As the world embraces sustainability, high-polluting and damaging industries such as the mining sector are under intense pressure to be cleaner and greener. But how will this be achieved? In Australia, mining giant Andrew Forrest has pivoted his business to invest in green hydrogen, and formed a new company, Fortescue Future Industries, to lead the charge. But mining is also intrinsically linked to the future of the renewable energy sector. Solar panels for households and giant farms such as the SunCable project as well as electric vehicle batteries need minerals including silicon, aluminum, copper and lithium to power a green future. Andrew Job, Founder and CEO of mining firm and LinkedIn Top Startup Plotlogic, aims to reduce the impact on the natural environment and shorten the mining process. His company, which nabbed a $43 million investment in July, uses sensors and artificial intelligence to determine the quality of minerals and metals. It is now used by BHP and lithium company Pilbara Minerals to help boost output but also reduce waste. “The clean energy future we’re casting toward is quite literally decades away, and given the amount of metals we’d need to transition away from fossil fuels and towards battery power, we just don’t have that kind of time,” he writes on LinkedIn. “Luckily, we can take tangible steps toward that future now.” Job told LinkedIn News Australia his business was focused on hiring staff who have a “passion for our mission of transforming the mining industry”, and that PlotLogic was incorporating it into all facets of the business. “Our sustainability practices include minimising waste in our product development processes, promoting responsible sourcing of materials, and actively seeking ways to reduce our carbon footprint. We're committed to aligning our business with the principles of sustainable development,” he said. What are your thoughts on the ‘greening’ of the mining industry and the opportunities for startups like PlotLogic to disrupt it? How can the world’s bold goals of net-zero be balanced with the practicalities of sourcing minerals and metal to power it? Share your thoughts in the comments below. ✏️ Cathy Anderson Check out Linkedin Australia’s Top Startups which are rising to the challenges of the moment and continuing to innovate and attract top talent in 2023: https://lnkd.in/TSU23AU Sources:The Australian Financial Review: https://lnkd.in/exP_s6Wk and https://lnkd.in/e4p4k4tH Startup Daily: https://lnkd.in/gtCRFmCQ Andrew Job: https://lnkd.in/ew3CW43v

New mines now take nearly 18 years to go from discovery to first production. In the 1990s, it took just 6. That gap tells you everything about where the industry is today. The delays are everywhere. Permitting is slower. Financing is harder. Feasibility and construction get stuck in limbo. In the US, the average lead time is now over 19 years. Globally, it’s 15.5. And that’s just the average. Some projects are stretching to 30 or 40 years. Look at Donlin in Alaska, discovered in 1990, still not in production. Wafi-Golpu in Papua New Guinea has been stalled since 1990 too. Resolution in Arizona is still in limbo. Every project has its own mix of tribal, environmental, or regulatory hurdles. And every delay adds risk, cost, and uncertainty. This isn’t about bad geology. The resources are there. The challenge is everything that comes after the drill hits ore. Even after a positive feasibility study, it can take a decade to move. In some cases, the process stalls completely if political winds shift. If we want new supply, the timelines need to come down. Not by cutting corners, but by clearing bottlenecks. Exploration is already high-risk. If development becomes a multi-decade gamble, fewer will play. #Mining #Exploration #Development #Permitting #Metals #Copper Sources: https://lnkd.in/gVMDz9Gf https://www.harmony.co.za https://www.novagold.com

Copper deposits are found 1,280 meters deeper than a century ago.   To meet demand, mining productivity must catch up.    A century ago, copper was easier to reach.     Deposits were shallow, often just 300 meters below the surface, and ore grade was higher, with 1% of the material containing copper.     Today, deposits are buried more than 1,000 meters underground, and ore grades have dropped to just 0.5%. Twice the material must now be processed to achieve the same amount of copper concentrate.    As deposits go deeper, the rock becomes harder and more compact. This happens as sediments are buried under more layers, causing compaction, which reduces pore space, and lithification, which cements the grains together.     At greater depths, metamorphism can further change the rock’s structure, making it even harder and more resistant. These factors make deeper deposits more difficult and energy-intensive to process.    Increased hardness requires more energy for grinding and crushing, driving up both capital cost (mill size and power) operating costs and energy consumption.     Deeper ore also brings greater uncertainty, especially in expansion projects.     Early-stage testing may not fully capture the increased hardness at deeper levels, leading to a lack of preparation and unforeseen difficulties in extraction.    Understanding the rock’s hardness helps manage these risks.    It allows mining companies to control costs, avoid delays, and stay on track to meet the rising demand for copper.   #Orebodyknowledge #criticalminerals

Mining, Technology & Training The mining sector has always been fertile ground for technological adoption—optimising activities from exploration to production. Over my 28+ year career, I’ve witnessed breakthroughs that transformed how we extract value from the earth. Some innovations exceeded expectations, while others fell short of ROI. A quick snapshot of the journey includes, but is not limited to: • 2000–2009: Digitising pits & plants • 2010–2016: Autonomy + remote operations (e.g., driverless haul trucks) • 2017–2019: Advanced analytics, ore sorting, safer tailings management • 2020–2022: Electrification & integrated data systems • 2023–Present: AI copilots, digital twins, and low-impact recovery methods With every leap, the sophistication of machinery has demanded equally skilled people. Today, predictive maintenance, AI-assisted safety systems, and machine learning are helping reduce downtime and ensure incident-free operations. The real game-changer? Firms that pair state-of-the-art machinery with continuous workforce upskilling. Imagine turning tailings into refined minerals in record time—boosting both operational efficiency and investor returns. For both new entrants and seasoned professionals, the message is clear: keep learning, keep adapting. The future of mining will belong to those who can harness technology and human expertise in tandem. Your thoughts and insights are welcome—let’s grow together. #mining #technology #training 

The chart below portrays a predicament that is progressively becoming the centerpiece of the demand argument for commodities. Despite the recent upsurge in construction spending, commodity producers have evidently fallen short of matching this trend. Capital expenditure in natural resource industries has remained near historically low levels, especially when adjusted for GDP. It is important to bear in mind that changes in the supply curve of commodities typically align with the capital spending behavior of underlying producers, albeit with a significant lag effect. Essentially, it requires time for investments to translate into increased supply. The current scarcity of capex among these producers, juxtaposed with the upsurge in construction expenditure fueling material demand, ,in our analysis, portends significantly higher commodity prices to balance these markets in the face of these structural supply constraints. Significantly higher prices, in our view, will be necessary to incentivize new capex investment, and it will take many years before these new supplies come on stream in a significant enough way to alleviate pricing conditions. It has been taking a decade or more on average to bring a new discovery into production in today’s global anti-mining climate given the environmental and social licensing, government permitting, and capital-raising challenges.

This is what it looks like when we bet on American production... and follow through. The United States Department of Defense's multi-billion dollar commitment, including its partnership with MP Materials, gives us a blueprint for how America rebuilds industrial sovereignty. We're talking about magnets, but we're really talking about economic independence. This signals three shifts that matter: First, we're moving from symbolic climate pledges to physical infrastructure that works. MP Materials plans to produce up to 10,000 metric tons of rare earth magnets by 2028, which is 40x current U.S. capacity. Fantastic. Second, we're finally pricing in supply chain risk. China controls over 90% of global rare earth processing and has used that leverage beforeThe Pentagon's price floor helps protect American manufacturers from predatory export tactics that drove out competition in the past. Third, this shows the power of government acting as a strategic buyer. Long-term demand signals from the military break the chicken-and-egg dynamic in domestic manufacturing. Companies can build with confidence. I see the electrified economy taking shape here. These magnets  power everything from wind turbines, EVs, and even fighter jets. But at the core, this is about building local, scalable systems that reduce emissions and strengthen our economy. The energy transition delivers both security and sustainability when we focus on building systems that work.

Three Horizons for the Future of Mining One of the trickiest areas of public concern today is how society can use the rich treasure trove of resources beneath its feet to deliver sustainable wellbeing for both people and planet. Traditional mining practices are getting revitalised by modern 21st century technologies and mindsets. In a similar fashion, geoscience and geoscientists need new narratives to engage publics and policy makers in re-storifying what the the future of mining might look like. A great way to explore these new narratives is the 'Three Horizons' foresight tool of Bill Sharpe and colleagues. Their approach visualises three different development pathways (horizons), all of which exist in the present (and continue into the future) but whose dominance, in terms of mindsets and practice, changes dramatically over time. The first horizon (H1; black line) portrays the current ‘business as usual’ pathway of behaviours, norms and drivers, which are expected to decline in influence as the wider landscape changes (e.g. due to climate change, shifting markets or changes in technology). The second horizon (blue line) is the intermediary transition space where disruptive innovations and actions help create space for new mindsets and practices. Although this ‘innovation’ pathway impels the mining industry towards a profound change of business model and leads the transition to a circular economy (blue), it falls short of the broader demands of a genuine wellbeing-based economy that delivers long-term sustainability for all. But ‘in the wings’ lurks a third ‘visionary’ pathway, in which the extractive industry is part of a paradigm shift in our society, and a pillar of well-being and environment (green). A fundamental pillar of this more radical approach is a sector-wide focus on ensuring the wellbeing of the natural capital resource – reducing the environmental footprint of mining activities, greening extractive operations and making efficiency gains, and practices that pursue ‘no net loss’ or ‘net positive impact’. The Three Horizons depicted here offers just one view of the possible pathways of the future minerals and mining landscape. What's great about this simple visioning tool is that can energise participatory workshops in which geoscientists from different sectors, and especially students, can collectively question and re-draw conventional wisdom to re-think and re-imagine how geoscience can shape the future. And, in turn, how that future might reshape geoscience today. Gloaguen, R., Ali, S.H., Herrington, R., Ajjabou, L., Downey, E. and Stewart, I.S., 2022. Mineral revolution for the wellbeing economy. Global Sustainability, 5, p.e15. https://lnkd.in/emc4Xjwk Richard Gloaguen Saleem H. Ali Richard Herrington Leïla Ajjabou