The COVID-19 pandemic has accelerated change in the mining sector, particularly around digital and data optimisation, innovation, and the workforce, according to consultants Ernst and Young.
EY lists these three areas among its top 10 business risks and opportunities for mining and metals in 2021.
“Companies are recognising that accelerating adoption of remote working and virtual teams has the potential to add value beyond the crisis by keeping teams safe, productive and engaged,” the report said.
The COVID-forced changes highlighted the benefits of various technologies, such as automation, AI, and blockchain to help business continuity.
The report said there was a growing digital confidence for miners, with many issues surrounding digital having become “business as usual” for larger miners.
“Many are in the second or third year of their digital road map journey, and as their digital transformation becomes more complex, its value to the organisation is clearer,” the report said.
It said the conditions were ripe to expand and scale collaborative innovation.
“Opportunities abound for miners to broaden the scope and increase the effectiveness of their innovation agendas, particularly after the sector’s rapid pivot in response to COVID-19.”
This accelerated change and the push towards decarbonisation were leading to a structural change in the mining sector, according to Paul House, Chief Executive Officer of leading mining-tech company IMDEX.
Decarbonisation and the green agenda are listed fourth in EY’s report, which says COVID-19 has offered miners an opportunity to reset operations.
“Companies that increase their focus on environment, safety and governance issues can strengthen their LTO and gain a competitive edge in the fight for capital,” EY said.
IMDEX has reported an increase in demand for remote working technologies and software as a consequence of COVID-19.
Paul said the positive outlook for mining-tech was being driven by investment in decarbonisation metals including cobalt, copper, nickel, lithium and aluminium; mining’s essential role in global economic recovery; and the minerals industry embracing new technologies.
“Resource companies are embracing innovation and new technologies on a scale that has not been seen in the past,” Paul said.
“This is partly by necessity, to enable remote working or to access resources and ore bodies that are deeper and more complex to reach, and partly by opportunity, as these technologies will enable faster drilling, more efficient drilling, and better decision making.
“Consultants Wood Mackenzie has said that $1 trillion of investment would be needed in key energy transition metals — aluminium, cobalt, copper, nickel, and lithium — over the next 15 years to meet the growing demands of decarbonisation.
“Reacting to such demand is fundamentally changing resource companies’ approach and they can do this because commodity prices are higher, budgets are increasing, and existing reserves have been further depleted while the world has been dealing with COVID.”
Billionaire mining entrepreneur Robert Friedland says the commodities market is not in a supercycle but an unprecedented and revolutionary cycle driven by the rise of green energy and electrification.
In an article in the Mining Journal, he said: “The shift to green energy and low carbon targets have turned the world on its head, not to mention the mining and energy sectors.”
Winners in this new electrified world would include aluminium, iron ore, copper and cobalt, he said.