The mining and metals industry’s future will be determined by skills-based human capital challenges, grassroots exploration, and the government to rethink regulation, as highlighted in Deloitte Global’s Tracking the Trends.
The need for mining and metals companies to collaborate with industry peers, suppliers, and competitors to tackle productivity and environmental issues while upholding environmental, social, and governance (ESG) expectations in day-to-day operations remains a priority.
These three trends suggest collaborative regulatory reforms, strategic long-term investment, and workforce skills to enhance the mining and metals industry’s sustainable growth and resilience amidst dynamic challenges.
Mining and metals projects are the engines of global socio-economic growth and an underlying factor in progressing into a low-carbon economy under favourable legal frameworks. The Energy Transitions Commission pinpoints the presence of adequate geological resources that will power the shift to a net-zero economy. Nevertheless, event-driven supply ramp-up and sustainable mining are critical for success.
While this is the case, mining projects’ permitting processes often prolong for several years, which consequently makes it difficult for local supply chains to align with net-zero objectives by 2050. The regulator should review current laws and urgently provide for the need to expedite approvals while maintaining environmental sustainability and community engagement.
Collaboration between governments, industry players, and the local community is critical to addressing the challenges this sector faces. Through the process of regulation consulting and editing, regions become more investor-attractive, which can boost their economic growth and help them move to a low-carbon economy. Besides, strategic project scheduling provides a chance to identify the high-priority spheres of development and to balance the risks and opportunities in an appropriate way.
“By coming together, government and industry can identify and prioritise critical projects for urgent acceleration. This is especially important given the economic and skills opportunities that capital projects can unlock,” said Louis Kruger, partner, Energy, Resources, and Industrials leader, Deloitte Africa.
Integration and streamlining of regulatory processes are critical steps toward expediting project approvals. For instance, Australia’s adoption of a single-touch environmental approvals approach has significantly reduced wait times for mining projects, stimulating substantial public and private investments while generating numerous job opportunities.
Michelle Leslie, senior manager, Financial Advisory, Deloitte Canada, said it’s important to consider the interconnection between permitting issues at the federal, regional, and local levels to avoid challenges, for instance, where municipalities rezone land, such as farmland.
Moreover, fostering economic partnerships with Indigenous communities presents a dual opportunity: not only does it ensure their participation in project development and decision-making processes, but it also facilitates the integration of traditional knowledge systems, leading to more informed and sustainable outcomes.
However, there are challenges to overcome. Complex environmental assessments and skill shortages, especially in emerging technologies like small modular reactors, pose significant hurdles. Governments and industry leaders must collaborate to address these issues through capacity-building initiatives and targeted regulatory reforms.
Attitudes toward exploration in the mining and metals industry reflect a dichotomy. While copper exploration focuses on extending profitable assets, battery metals like lithium experience increased investment. This disparity poses challenges to meeting demand and ESG expectations.
Historical investment patterns, tied to commodity prices, contribute to a shrinking pipeline for copper. Despite recent spending increases, the industry grapples with cyclical challenges, with budgets fluctuating based on market conditions. Additionally, there’s a shift from grassroots to brownfield exploration, driven by the difficulty of discovering deposits.
This trend leads to a scarcity of major discoveries, despite increased spending. Balancing exploration with other growth strategies, like mergers and acquisitions, is crucial. Technology adoption can enhance exploration efficiency, yet funding higher-risk exploration remains a hurdle. Innovative solutions are required to sustain industry growth and replenish reserves for the future.
Charles Hooper, director of consulting at Deloitte Canada, said in mining and metals, the percentage of exploration spend over time compared to the size of markets, like copper, is decreasing. The market size continues to increase, but we’re not seeing equivalent growth in the funding of exploration.
Organisations could better align their exploration efforts with strategic direction, invest in talent attraction and development, and harness technologies like artificial intelligence to reduce costs and speed target identification. Satellite-based technologies and generative AI hold promise for enhancing exploration programs. Funding higher-risk exploration forms without affecting market capitalisation is an emerging concern that major miners are beginning to address.
“Technology provides new tools to help humans do their jobs better and faster. The industry must stay on top of these developments and upskill its current workforce if it’s to counteract rising exploration costs, scarcity of new economic deposits, and retiring technical talent,” said Van Ramsay, partner, Mining and Metals leader, Deloitte Canada.
The mining and metals industry has been consistently dealing with an acute skills gap, mainly due to the industry’s aging workforce demanding talent revitalisation. DEI (diversity, equity, and inclusion) initiatives are a crucial component in the creation of safe workplaces and diverse talent attraction.
The attraction of younger generations to the industry is also problematic, with only a few of them going for mining and metal careers. Reshaping education according to what the industry demands and prioritising DEI are important measures for solving these problems.
Kristy Delaney, partner, Consulting, Deloitte Australia, said some companies are challenging different processes, practices, and systems and building DEI principles into wider projects, such as HR system implementations. This attitude should be applauded.
Shifting towards an approach to workforce development that is skills-based is gaining momentum, enabling flexibility and adaptability in job roles. Reskilling and upskilling programs are indispensable tools for adjusting the labour force to the demands of the future, such as adaptation and digitalisation. Educational institutions and industry collaboration are the crucial link between the academic curricula and the practical requirements of the industry.
“Not all educational establishments are turning out job-ready mining candidates today. In certain countries, there’s a lack of educational courses altogether, and where courses are available, curricula don’t always align with the industry’s needs. This means that new entrants often require a period of upskilling before they are fully job-ready,” added Delaney.
The new approaches, such as digital academies and AI-driven individualised programs, are being developed to enable job transformation. Through equipping workers with the newest training methods and creating inclusive environments, mining and metals organisations can boost productivity and be capable of having the necessary skills for future growth. On the one hand, wider regional partnerships and government support are also required to confront the workforce problem and facilitate the industry’s expansion.
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