VIDEO: 6 mining trends that are set to sort the winners from the losers
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Automation, climate change, geopolitical risk, and a scarcity of ‘easy’ mineral deposits are just a few things miners and explorers are contending with right now.
But Nicolas Maennling and Perrine Toledano from the Columbia Center on Sustainable Investment have flagged six future trends which could determine which companies succeed and fail in the future.
1. Adjusting to a low-carbon economy
Wind, solar, storage batteries and electric vehicles are more mineral-intensive than their fossil fuel-based counterparts, but the transition to them also means miners will need to reduce their own emissions.
2. The Final Frontiers
Companies will need to dig deeper and venture into frontier mining areas. And yes, that will include asteroids, and deeper into the sea bed than we’ve ever explored before.
3. Financing mines will demand inventive solutions
When prices collapsed following the China boom to 2014, many miners went to the wall, and people lost a lot of money.
So investors like the big banks are becoming more selective, with commodity and jurisdiction playing a key role in their decision-making.
4. Having a social license to operate will get harder
The fact is, obtaining a social licence to operate a mine has been a challenge in recent years.
Many proposed projects are rejected, and operations are disrupted by protests, say Maennling and Toledano.
What data should be shared by miners continues to be a major area of debate, the report says.
Governments, for example, could push for disclosure of subsidiary structures to address tax evasion, or consumers will seek to increase value chain transparency.
6. Fun and (geopolitical) games
Policymakers are increasingly enacting local laws and regulations which require minerals to be processed before they are exported.
For example the Democratic Republic of Congo has labelled cobalt a “strategic” metal and slapped a 10 per cent royalty on it.