No surprise that optimists outnumber pessimists 10-to-1 among mining executives who believe the industry can grow production to meet the world’s energy transition needs without compromising their own lofty decarbonisation ambitions, or other environmental goals.
What is a little unexpected about results of the latest survey of miners on the outlook for the industry is how quickly many apparently expect new technologies to impact their ability to lift output as they find ways to decarbonise in the relatively near term.
KPMG says its March 2023 survey of more than 430 mining and metals executives found “technological changes are seen as the most important factor affecting [their] five-year demand projections”. But it also highlighted industry recognition of the importance of technology as a “sustainable” production enabler.
“The specific opportunity over the next five years is to transform the carbon footprint of their operations through technology investments,” KPMG says in its 2023 Global Metals and Mining Outlook Report.
The emphasis is unexpected because, strategically, there is underwhelming evidence of the shifts needed to make the cultural and operational adjustments that will allow new technology to flood seamlessly into current and new mines.
New project studies and blueprints generally are not in sync with talked-about changes.
Technology company mining and metals revenues and order books do not yet reflect significant, broad changes in industry investment patterns.
KPMG’s report says if the industry is to achieve its net-zero and environmental, social and governance (ESG) objectives, “it must integrate them into enterprise strategy”.
“But only 28% [of respondents/companies] have already done so, and 34% say their company has only just begun this.”
Interestingly, KPMG’s survey indicates mining companies see advances in exploration and extraction, AI, 5G network and internet-of-things (IoT) technologies having the “most impact on mineral supplies” in the next five years.
“For metals companies, AI and data analytics are likely to have the biggest impact, the survey says.”
Autonomous mining, ore pre-treatment and mine-waste and low-grade-ore recovery technologies are others seen to have scope to materially impact mine supply in the near term.
The former two, in particular, would need to scale incredibly quickly off a low base.
The KPMG survey, as with other similar industry reviews of recent times, does not connect mining executive optimism with realistic assessments of technology supply chain capacity in a number of new areas.
Some auto-mining leaders, for example, have said it could take decades to meet latent demand for technology retrofits, let alone new fleet demand.
“The sophistication of procurement in technology adoption, deployment, change management and integration is still nascent in the mining industry,” a visiting Canadian mining leader said at the recent Austmine 2023 conference in South Australia.
KPMG global mining leader Trevor Hart said: “The global mining sector knows there is a great deal of heavy lifting ahead to achieve net zero targets – and that time is of the essence.
“Our report shows metals and mining company executives understand that to succeed in reconciling ambitious growth targets with stringent carbon-reduction objectives, they will have to design their operating model to accommodate both objectives.
“How does the mining industry pivot rapidly toward carbon-free solutions without harming the environment while at the same time develop a strategy that aligns the interests of shareholders, workers, communities, consumers and governments?
“It’s encouraging the sector is confident it can deliver on growth and net zero.
“But we’re not saying it will be easy.”