The global mining industry is a key player in the 21st-century green transition, providing the minerals and energy needed to decarbonize modern society. Mining is also one of the oldest human activities on Earth, with a history stretching back several millennia.
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Mining is one of the key economic activities that continues to build the modern world. Like any industry, it is subject to changing and evolving investment trends in 2024, which govern how it will continue to develop over the coming decades in a changing world. This article will provide insight into investment trends in the global mining industry and explore why.
What is the Forecast for the Mining Industry?
The mining industry is navigating a complex and evolving mixture of challenges, demands, expectations, and opportunities in the 21st century as it seeks to remain economically and environmentally sustainable. Geopolitical, legal, ethical, ecological, and financial considerations all govern what areas the industry continues to invest in.
The industry is currently at a crossroads marked by dynamic, intersecting factors, such as reduced capital expenditure, increasing sustainability demands upon the sector, environmental, social, and governmental (ESG) scrutiny, emerging technologies, and strategic decision shifts by mining companies.1
Transitioning away from a fossil fuel-based economy to a green economy is driving investment in the exploration, extraction, and processing of key minerals such as lithium, cobalt, and nickel. While the COVID-19 pandemic and geopolitical challenges caused ripples in demand for some industrial metals such as zinc, nickel, and copper, increasing demand is expected to cause recovery over the next few years.
Some industrially important materials, such as rare-earth elements, crucial for sectors such as the semiconductor industry and the global green transition, are also largely concentrated within a few nations, making their supply particularly vulnerable to fluctuating geopolitical and economic issues. Considering everything, the investment landscape is incredibly complex.
Key Investment Trends in Mining
Key investment trends include green and sustainable mining, emerging and innovative mining technologies, and the exploration and development of new and existing regions.
Green and Sustainable Mining
The impact of human activity on the climate has accelerated investment in green technologies and sustainable mining. Renewable energy, electrification, and sustainable work practices are all gaining prominence in the mining industry as the sector aims to meet its climate and sustainability goals and commitments. Sustainability is a pivotal focus area in the global mining industry.
According to Brunel, the global green mining market in 2029 is predicted to reach around US$19 billion. Regulations, green technologies, and a shifting focus within the mining industry as a whole are key drivers of this trend.2
Several companies are leading the way, including Japanese mining giant Komatsu, which is developing all-electric haulers and loading equipment.
Caterpillar continues to leverage state-of-the-art electric power solutions, while Rio Tinto is adopting renewable energy in its mining operations, such as large-scale solar farms, to power mines in Australia. Glencore is also taking steps to reduce carbon emissions.3
Technological Advancement Investments in Mining
A raft of disruptive technologies is contributing to a shift in investment focus in the mining industry in 2024. Artificial intelligence (AI), digital transformation, automation, and big data are key areas in the mining sector’s transition to a more sustainable, efficient, productive, and financially viable model for the 21st century.
AI, for example, can streamline data and aid emerging technological trends, such as predictive maintenance, by applying algorithms and machine learning. Big data allows mining operators to analyze the myriads of dynamic data points in the digital mine. Digital twinning technologies help optimize productivity and safety.2
Automation improves safety, allows mines to streamline productivity, and enhances financial health by removing the need for workers at dangerous rockfaces in deep and hard-to-reach underground locations.
A McKinsey & Co. report has highlighted that AI, mine digitization, Industrial Internet of Things (IIoT) technologies, and machine learning could save the mining sector around $US373 billion by 2025.2
This technological transformation will require significant re-training, upskilling the existing workforce, and attracting new workers with relevant skills. While certainly challenging, several companies have recognized the potential of these disruptive technologies and are investing heavily in this area.
A Minerals Council of Australia report estimates that 77% of all jobs in the mining sector will be affected by emerging technologies over the next five years.4
Exploration and Development Investment in Mining
Areas such as the Asia-Pacific region, Australia, North America, and Latin America are undergoing significant growth in 2024. There is also accelerating interest in exploiting, extracting, and developing the untapped resources in the Arctic region as previously hard-to-reach areas become more accessible, with Norway approving deep seabed mining in its coastal waters.5
Notable Company Mining Developments and Investment in Recent Years
Over the past few years, there have been some significant cross-sector partnerships in the mining sector. General Motors, for instance, has heavily invested in Lithium Americas with a 9.9% stake to supply up to 1 million electric vehicles (EVs) yearly. Stellantis acquired a 14.2% stake in McEwen Copper in 2021.6
Shareholder pressure has caused Glencore to spin off its thermal coal business. In 2023, Coolabah Metals acquired the Cannington Project, which encompasses exploration licenses for 113.4 square kilometers in Australia.6
In terms of technological developments, Anglo-American PLC is deploying Komatsu’s autonomous haulage system, aiming to improve safety and productivity across the company’s operations.
Newcrest Mining is employing advanced drones to locate broken equipment. A partnership with the Volvo Group has seen the deployment of two EVs in Boliden Ab’s underground mining operations.6
Future Outlook of Mining and Investment
The long-term outlook for the mining industry is one of change and meeting the dynamic and evolving pressures of the transition toward net zero and a post-carbon, green economy. However, the sector continues to play a central role in this transition, with investment in new technologies and exploration.
The industry will likely continue to invest in emerging technologies such as automation, IoT, and AI, as well as the exploration of new and untapped resources and the transition toward a sustainable, green mining model. Increased stock interest in companies like Rio Tinto shows investor confidence in the mining industry's strategies.
The investment landscape in the mining sector continues to be dynamic. To be successful over the coming years, the industry must navigate complex geopolitical, regulatory, environmental, technological, and socioeconomic challenges. Despite this, the outlook is highly promising.
References and Further Reading
- The Cheap Investor (2024) 2024 Mining Industry Outlook: Navigating Challenges, Seizing Opportunities, and Top Stocks on Hedge Funds Radar [online] Available at: https://thecheapinvestor.com/2023/11/05/2024-mining-industry-outlook-navigating-challenges-seizing-opportunities-and-top-stocks-on-hedge-funds-radar/
- Tracy, F (2024) From Diversity to Tech: Our Four Top Mining Trends for 2024 [online] Brunel. Available at: https://www.brunel.net/en/blog/mining/mining-trends-2024
- Swallow, T (2021) Top 10 global sustainable brands in the mining industry [online] Mining Digital. Available at: https://miningdigital.com/supply-chain-and-operations/top-10-global-sustainable-brands-mining-industry
- Minerals Council of Australia (2023) There’s more to Australian Mining (market report) [online] Available at: https://minerals.org.au/wp-content/uploads/2023/01/Advantage-Australia.pdf
- Stallard, E (2024) Deep-sea mining: Norway approves controversial practice [online] BBC News. Available at: https://www.bbc.co.uk/news/science-environment-67893808
- BDO (2024) Annual Mining Report 2024 [online] Available at: https://www.bdo.co.uk/en-gb/thank-you-download-bdo-mining-report-2024
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