Overview

Minerals and metals are indispensable for countless economic activi- ties. The energy transition is set to increase the demand for materials, and numerous industries are expected to require more minerals in the near future. This, combined with a renewed focus on sustainability, makes the mining and metals industry ripe for a transformation whose implications will extend beyond the immediate sector to a myriad of in- dustries and processes essential to everyday life.
Over the year 2023, the World Economic Forum gathered a select group of senior leaders from the mining and metals community to dis- cuss the new challenges the industry is facing, as well as opportunities for the way forward. The group agreed on the need to shape a collec- tive vision and share their thought leadership with multiple audiences. This report captures this vision to help inform discussion on the future of the mining and metals industry.

KEY TRENDS DRIVING THE INDUSTRY: INDUSTRY MEGATRENDS

  • Energy transition has accelerated the dual demand for increased production and sustainable performance
  • Challenges and opportunities will arise
  • Current technology must rapidly evolve
  • Societal and investor demands, technological change, and geopolitical turbulence
  • Risk losing control of their businesses

KEY TRENDS DRIVING THE INDUSTRY: SOCIAL TRANSFORMATIONS

  • Post-pandemic government interventions have increased national deficits and debt
  • Working- and middle-class anxious about dislocated macroeconomic conditions
  • Responsible supply of materials to support modern life and new energy economy
  • Copper demand expected to nearly double by 2035
  • Current production trends will fall short of demand

KEY TRENDS DRIVING THE INDUSTRY: ACCELERATION OF TECHNOLOGY

  • Automation is improving safety, reducing emissions, and increasing efficiency
  • AI is advancing rapidly, creating unknown unknowns
  • Anchor to core values for moral and people-centric decisions

KEY TRENDS DRIVING THE INDUSTRY: GEOPOLITICAL TURBULENCE

  • Leadership in resources sector extends to local communities and government
  • High-quality engagement with governments and stakeholders is necessary
  • Helps stabilize geopolitical environments and satisfy shareholders

KEY TRENDS DRIVING THE INDUSTRY: GEOPOLITICAL TURBULENCE

  • Benefits workforce, communities, host countries, and shareholders
  • Supplies essential resources for new energy future
  • Leverage capability, creativity, and goodwill of workforces and community partners

KEY TRENDS DRIVING THE INDUSTRY: GEOPOLITICAL TURBULENCE

  • Driven by energy transition
  • Essential for reducing emissions that cause climate change
  • Large amounts of critical minerals required
  • Lithium, nickel, and rare earths on every list of concern
  • Copper and aluminium also on many lists

WILL THE ENERGY TRANSITION CREATE DANGEROUS DEPENDENCIES ON CRITICAL MINERALS?

  • Used for batteries, solar panels, and wind turbines
  • Revolution in energy production and use
  • Figure 1 shows projections for future demand
  • Lithium, nickel, and rare earths on every list of concern
  • Copper and aluminium also on many lists

WILL THE ENERGY TRANSITION CREATE DANGEROUS DEPENDENCIES ON CRITICAL MINERALS?

  • Energy transition is part of a larger societal transformation
  • Industry should expect to become much more transparent
  • Industry will be scrutinized heavily because of its environmental impacts
  • Life-cycle emissions and other impacts will be linked to the products
  • Concerns anchored on imports of raw and processed materials from certain countries
  • Dependence on critical materials leading to geopolitical concerns

WILL THE ENERGY TRANSITION CREATE DANGEROUS DEPENDENCIES ON CRITICAL MINERALS?

  • International institutions are under threat and less capable of managing global problems
  • Initiatives could produce new suppliers and more diversity in global supplies
  • Commodity markets with diverse supplies tend to be more reliable and secure
  • Higher prices and demand will spur innovation in supply and demand
  • Policy-makers should let markets work where they can and identify areas for intervention

MINING AND METALS IN THE GEOPOLITICAL SPOTLIGHT

  • Advancement of energy transition and supply diversification
  • Supply security, extraction and transformation methods, and carbon footprint becoming critical factors
  • G7 countries adopt “Plan for Critical Minerals Security” and pledge $13 billion in support
  • G20 countries emphasize need for diversified, sustainable, and responsible supply chains
  • Copper demand could rise by 40% in 2035
  • Lithium demand expected to increase five-fold by 2035

MINING AND METALS IN THE GEOPOLITICAL SPOTLIGHT

  • 20% of remaining supply depends on untested technologies
  • Recycling and reducing metal intensity of infrastructure
  • Adopting new technologies to increase mining efficiency
  • Average project is 30% smaller and takes 15% longer to reach market
  • Increasingly requires operating in socio-economically challenging jurisdictions

MINING AND METALS IN THE GEOPOLITICAL SPOTLIGHT

Country Average Lead Time (Years)
Mongolia
Laos
Turkey
USA
Zambia
Democratic Republic of Congo
Australia
Argentina
Mexico
Peru
Spain
China
Ecuador
Chile
Ghana
Canada
Russia
Indonesia

THE CHANGING ROLE OF GOVERNMENTS

  • Decarbonization and securing resources for the energy transition
  • Mining in post-pandemic economic recovery
  • Shift towards geopolitically driven supply chains
  • Significant price volatility for copper, nickel, and lithium

CHINA: THE ENERGY TRANSITION WILL ACCELERATE SHIFT IN DOMESTIC END-USE DEMAND

  • China's share of global manufacturing output increased six- fold since 2000
  • Major net exporter of passenger vehicles
  • Strong technology capabilities, cost advantages, and presence in multiple value chains
  • G7 countries adopt “Plan for Critical Minerals Security” and pledge $13 billion in support
  • G20 countries emphasize need for diversified, sustainable,
    and responsible supply chains

INDUSTRIAL POLICIES: REINDUSTRIALIZATION WILL SPUR NEW VALUE- CHAIN PARTNERSHIPS

  • New subsidies, incentives, trade policies, and other enabling policies
 
 
  • Presidential and general elections in resource-rich countries
  • Strong international competition for trade partnerships

ENERGY TRANSITION: “FIRMED” CLEAN ENERGY WILL CREATE NEW PROCESSING HUBS

  • Energy-intensive processes will locate in areas with green energy
  • Areas rich in solar and wind resources will be preferred
  • May continue to rely on nuclear or fossil-fuel based electricity

RECYCLING: SCRAP WILL BECOME VITALLY IMPORTANT IN ENSURING SUPPLY SECURITY AND CUTTING CO2

  • End-customers will focus on securing recycled materials to reduce their CO2 footprints
  • Industrial policies have set recycling content targets for new products
  • Example: EU Critical Raw Materials Act’s 15% target for recycled content by 2030

ESG: BALANCING SOCIETAL CHOICES IN THE FACE OF INFLATIONARY RISKS

  • Enhanced transparency and accountability
  • Local communities, water management, nature/biodiversity, workforce diversity
  • Tough societal choices for governments and businesses
  • Local vs overseas projects, trade tariffs vs increased prices
  • Ambitious climate goals vs regional inflationary risks

POWERING METALS: ENERGY SUPPLY IN THE GLOBAL MINING INDUSTRY

  • Accounts for 10% of world energy consumption
  • Focus shifting towards Africa, which holds 30% of the world's mineral reserves
  • Lack of sustainability policies and provisions in countries with critical mining sites
  • Significant investment and updated policy approach needed
  • Introduction of state-of-the-art electric mining tools and AI to optimize energy use
  • Policy-makers should let markets work where they can and identify areas for intervention
  • Investment in sustainable power sources and cross-industry upskilling operation needed

ACCELERATING TRANSFORMATI ON THROUGH INNOVATION: SUSTAINABLE PHOSPHORUS MINING FOR SCALING FOOD PRODUCTION

  • Food production will need to increase by an estimated 56% to
    achieve global food security by 2050.
  • Phosphorus is a critical finite resource for plant growth.
  • Mining provides phosphate rock, the primary source of phosphorus for phosphate fertilizers.
  • Fertilizers play a key role in reducing emissions by enhancing carbon sequestration and other sustainable practices.
 

THE STEEL OF THE FUTURE: HOW TECHNOLOGY AND INNOVATION WILL SHAPE IT

  • Accounts for 10% of world energy consumption
  • Focus shifting towards Africa, which holds 30% of the
    world's mineral reserves
  • Transformations driven by process optimization and changing customer needs
  • AI enables better customer interactions with the use of big data and 'synthetic customers'
  • Investment in sustainable power sources and cross-industry
    upskilling operation needed

STRATEGIC PARTNERSHIPS: RETHINKING BUSINESS MODELS FOR THE GREEN TRANSITION

  • Shift from intricate global supply chains to strategic partnerships with raw material providers
  • Phosphorus is a critical finite resource for plant growth.
  • Mining provides phosphate rock, the primary source of
    phosphorus for phosphate fertilizers.
  • Unite across value chain to deliver real improvements
  • Establish joint roadmaps and push frontier of what is possible