The mining industry in 2024 is poised to undergo significant changes, influenced by various global factors and industry-specific trends. Here's an in-depth look at what's shaping the future of mining.
Global Economic and Commodity Trends
Research by BMI indicates a modest improvement in mineral and metal prices in 2024. This is attributed to weak demand in China and a deceleration in global growth. China's GDP growth is projected to be lower than in previous years, impacting the sector. Despite these challenges, BMI remains optimistic about commodities like tin, aluminum, copper, lead, steel, coking coal, and iron ore. However, they predict underperformance in nickel and zinc due to excess market supply. A decline in the dollar's strength and potential stimulus in China's property sector might support prices for certain metals like copper, aluminum, and tin. The report also highlights increased concerns over critical mineral resource security, leading to policies for developing stable and reliable supply chains.
Mergers and Acquisitions
Mergers and acquisitions (M&A) are expected to be prevalent in the mining sector in 2024. This trend is driven by the global energy transition and industry consolidation. Notable transactions include BHP's acquisition of OZ Minerals and Rio Tinto's takeover of Turquoise Hill Resources, emphasizing a focus on critical metals like copper. A proposed merger between lithium miners Livent and Allkem further reflects this trend, highlighting the industry's response to rising demand for green metals.
Environmental, Social, and Governance (ESG) Concerns
EY's report finds that ESG remains the top risk for mining executives. Companies are now expected to go beyond regulatory compliance, emphasizing a net-positive impact on communities and the environment. This shift is driven by increasing investor and community awareness of ESG factors. The report underscores the need for transparency and a clear communication of non-financial value to stakeholders.
Cybersecurity and Capital Concerns
Cybersecurity has re-emerged as a key concern, with a complex threat landscape. Only 40% of mining and metals boards feel confident in understanding major cyber threats. Additionally, capital is now a significant concern, with the industry requiring funding for expansion to meet the demand for critical minerals essential for the energy transition.
Industry's Role in Economic Development
Deloitte's report highlights the critical role of the mining and metals industry in underpinning the global economy. The sector is vital for the energy transition and climate change efforts, with increasing demand for minerals from various sectors including transport, technology, and battery storage. The report emphasizes the importance of circularity and technological innovation within the industry, aligning with environmental and social governance principles.
Comments