Within the last few months during my discussions with peers in mining companies, two key themes have repeatedly resurfaced.

First, in a world in which critical minerals and resource security are ever higher on governments agendas, what is the right role for governments to play alongside the mining sector, and what are the implications for industry and society more broadly. Are grants, price floors or funding for innovation the right solutions?

Second, a pressure cooker is building around the industry characterized by (1) declining ore grades, (2) rising demand, (3) greater intervention from governments and criminal groups, (4) rising sustainability performance expectations – without a concomitant reward for good actors, and (5) a lack of clarity on how innovation might act at the pressure release valve. AI is beginning to present many exciting opportunities for improvements, but not yet at the scale that will unlock this above conundrum.

The themes of governance and innovation formed the core of our just-published Future Prospects paper which explores how the mining industry could evolve up until 2050. ERM undertook the study in partnership with Systemiq and ICMM, and funded by the Gordon and Betty Moore Foundation.

Across our Fracture, Space Race and Flywheel scenarios we found that:

1. Increasing supply of metals and minerals is a strategic imperative across all the scenarios

2. Supplying these minerals is increasingly subject to nature-related risks and constraints

  • when you overlay where many of the new resources are likely to come from, with areas of sensitive biodiversity, they match.
  • This will make those resources very challenging to develop from a social perspective – and wider nature degradation will also pose broader business challenges to this industry for example as water becomes less abundant and climate becomes more volatile.

3. Given the development timelines for new projects, the global portfolio of mines in 2050 will largely be populated over the coming decade

  • given that most mines have a lifetime of many decades, much existing mining stock will continue to be in operation in 2050, and in order for any radical new innovation to have a genuine impact on the overall outlook for the sector, it would need to be being implemented in new projects being built now.
  • Given the lag we cannot rely on a final sprint to improve nature outcomes.

4. The increasing politicization of mining is a double-edged sword for the industry, but requires greater investment in building the right relationships

  • for an industry that has long felt misunderstood and underappreciated, the current political climate around resources presents a huge opportunity to reframe the importance of mining as a public good.
  • However it also will result in much greater political interference and intervention that will require upgrading companies’ capabilities around how to build the right partnerships and coalitions to succeed.

5. The major lever open to the mining industry is innovation,

  • but it can’t be solved by the industry alone. There need to be sufficient rewards for those who innovate, and willingness from governments and investors to help derisk introducing new approaches which could ultimately fail.
  • One thing mining companies can do to enable that more conducive environment would be to embrace traceability to ensure that the data exists to differentiate good and bad performers if or when stakeholder attitudes shift in that direction.

Please follow this link to download the full report. Get in touch if you would like to discuss the findings further.