According to PwC’s 19th annual review of the Top 40 mining companies (Mine 2022) which examines global trends in the mining industry, future success will depend on whether or not the Top 40 can take a leading role in the world’s clean energy transition and continue to generate stakeholder value. To do that, miners must utilise their current strong financial position to meet challenges including development timelines, price volatility, geopolitical risks, stakeholder expectations, economies of scale, and economic resource scarcity.
This year’s report suggests that the rewards for those miners that emerge as leaders in the clean energy transition could be immense. According to recent data, the need for critical minerals, such as copper, nickel and cobalt, is expected to grow over the next three decades, with some estimates suggesting that the annual demand from clean energy technologies will reach over US$400bn by 2050.
That’s because the world’s shift to net zero will require more mining, not less. The rapid scaling of the low-emission energy systems of the future—solar and wind power, electric vehicles, grid-scale batteries—will be highly material-intensive. The production of a solar farm, for example, requires three times more mineral resources than a similar-sized coal plant, and a wind farm needs 13 times as much as a comparable gas-fired plant. However, resourcing the energy transition is not simply a matter of mining more of the same materials in the same way. Instead, the world will need more critical minerals and raw materials to power the global economy of the future—and they will need to be mined sustainably.
So what should the world’s biggest miners do next? The report offers four key takeaways.
- carefully consider their position in the race to net zero and exposure to critical minerals;
- take advantage of their financial strength;
- revisit their deals strategy; and
- double down on ESG.