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KPMG has released its 2024 Global Metals and Mining Outlook, offering analysis of critical trends reshaping the global metals and mining industries. The report highlights the challenges and opportunities emerging from decarbonization efforts, technological advancements, geopolitical shifts, regulatory changes, and market dynamics. With input from over 450 C-level executives, including Bob Wilt, Chief Executive Officer of Ma’aden, Saudi Arabia’s national mining company, the report underscores the industry’s commitment to sustainability, digital transformation, and resilience amidst growing volatility.
The metals and mining industries are undergoing a transformation, driven by the need to reduce carbon emissions and improve operational efficiency. According to the report, 47% of executives believe transforming their carbon footprint through technology investments represents a major business opportunity over the next five years. 55% of executives highlight the importance of integrating decarbonization initiatives into their corporate strategy. Key advancements, such as the electrification of machinery and strategic mine redesign, are central to this shift.
Commenting on the report, Sammy Ahmed, Partner and Head of Energy & Natural Resources at KPMG for Europe, Middle East and Africa said: The metals and mining sector stands at a pivotal crossroads, where decarbonization, geopolitical shifts, and technology, including AI, are reshaping the path to resilience and growth. This report highlights how integrating sustainable practices with operational transformation is not only essential for a net-zero future but also a strategic advantage for long-term success.
The electrification of processes like haul trucks is boosting efficiency and reducing emissions. Companies are adopting KPIs to monitor progress, with 43% already implementing systems to track their carbon footprint.
The report highlights the role of advanced technologies like Artificial Intelligence (AI) and Machine Learning (ML) in improving efficiency and supporting decarbonization. 43% of executives see AI as crucial for addressing strategic issues, from optimizing production to reducing emissions. AI has also significantly cut the time required for critical processes. “The time it takes from exploration to commissioning a mine has been cut from sixteen years to nine years, thanks to AI and advanced analytics,” according to Wilt.
Despite price volatility and supply chain disruptions, the metals and mining industries remain optimistic. 66% of executives have seen increased output price volatility in the past two years, driven by geopolitical events and rising demand for minerals like lithium, copper, and nickel. 61% of executives are more confident in their company’s growth prospects than they were two years ago. To navigate this volatility, 58% of companies are expanding investments into new geographic markets and forming partnerships to strengthen supply chains.
As the industry undergoes transformations, companies are focusing on talent acquisition and development. 47% of executives identify skills shortages as a key challenge, particularly with new technologies. Companies are addressing this by upskilling employees and recruiting talent from sectors like technology and renewable energy. Relationships with educational institutions are also being strengthened to ensure a steady pipeline of talent.
The report shows 66% of executives cite increased price volatility in response to geopolitical events, while 56% highlight AI as a tool for predicting regulatory changes and mitigating risks. Regulatory pressures, particularly on emissions targets, are growing. 33% of executives report Scope 1 and 2 emissions as key regulatory risks, while 30% highlight Scope 3 emissions.
“We note that companies are adapting by strengthening compliance through AI and scenario planning, added Farhan Muhammad, Director, Metals & Mining at KPMG in Saudi Arabia. “Global trends, like the use of AI and innovation for decarbonization, sustainability, operational efficiency and business continuity are increasingly being implemented in Saudi Arabia as well, with promising outcomes so far.”