KPMG have released KPMG Global Mining Outlook Report 2023 – Executive insights on Decarbonisation, showcasing the confidence that sector executives have in their ability to deliver on growth and decarbonisation objectives.
The report looks at areas of opportunity, with technology and innovation key amongst those explored.
A key finding of the report is the industry’s ability to maintain a strong growth outlook while integrating ESG objectives and achieving net zero targets.
The report found that 54 per cent of mining and metals executives saw changes in technology as the most important factor affecting their company’s range of demand projections over the next five years. Transforming the cost-efficiency of operations through technology investments comes a close second.
When looking at the technologies likely to have the most impact on increasing mineral supplies over the next five years, 26 per cent said 5G technologies while 24 per cent called out advances in exploration techniques and technology, IoT, and new extraction technology all in equal second place.
Respondents said the top two technologies likely to have the most impact on increasing metal supplies over the next five years were artificial intelligence (48 per cent) and data and analytics (42 per cent).
Improving energy efficiency was another key finding of the report, with the rapid progress mining companies are already making to reduce carbon emissions encouraging them to invest more in efforts to decarbonise.
The survey showed that improving energy consumption efficiency is the highest priority for tackling the environmental challenges from mining and metals processing.
The survey also showed mining and metals executives are confident the industry can increase production without compromising its own objectives for a net zero future and respond to environmental, social and governance (ESG) concerns. The ratio of optimists to pessimists is nearly ten to one.
While mining and metals companies invest heavily in reducing their carbon footprint, they are also focusing on ESG goals. Executives consider providing workforces with healthcare, paid leave and retirement benefits as the highest priority for tackling the social impact of mining and metals processing.
Other ESG goals include:
- Environmental impacts – 41 per cent of executives said curbing carbon emissions through improvements in the efficiency of current types of energy consumption was the highest priority for tackling the environmental impact of mineral and metal processing. 36 per cent nominated exploring alternative low-emission technologies (such as closed-loop carbon recycling for steel)
- Social impacts – 44 per cent said providing non-salary benefits such as healthcare benefits, paid leave and pensions was the highest priority for tackling the social impact of the development of mineral and mineral/metal processing
- Net zero objectives – 46 per cent said ensuring their company communicates clearly and fully to its stakeholders about the net zero objective and progress to meet it was the most effective strategy, closely followed by 45 per cent who said that ensuring the CEO and the Board of Directors were committed to net zero objectives
- Scope 3 emissions reductions – 33 per cent said they had a plan to reduce and eventually eliminate Scope 3 emissions by 2040 while 39 per cent said they would eliminate these emissions by 2050
Mining and Metals leader at KPMG Australia, Nick Harridge, said that technological changes were the most important factor affecting the five-year demand projections of executives surveyed. These were focused on advances in exploration and extraction technology, AI, 5G networks, and Internet of Things (IoT).
“The findings indicate these are the technologies that will have the most impact on mineral supplies. In particular, 41 per cent said their biggest opportunities over the next five years lay in operational cost efficiency through technology investments, while 43 per cent called out transforming the carbon footprint through technology.”
KPMG Global Mining Leader, Trevor Hart, said, “The global mining sector knows there is a great deal of heavy lifting ahead to achieve net zero targets – and that time is of the essence.
“Our report shows metals and mining company executives understand that to succeed in reconciling ambitious growth targets with stringent carbon-reduction objectives, they will have to design their operating model to accommodate both objectives. Achieving net -zero carbon emissions by 2040 or 2050 may seem a long way off, but now is the time to integrate those ambitions into enterprise strategy.”
Mr Hart said demand for materials used in the transition to a greener planet will rise dramatically over the next ten to 20 years. The report shows that 53 per cent of executives surveyed are confident, and 26 per cent very confident, that the metals and mining industry can meet that increasing demand.
“One of the reasons mining and metals executives are confident about the future is that they regard decarbonisation plans as a growth opportunity not just as a cost of doing business,” Mr Hart said.
“The specific opportunity over the next five years is to transform the carbon footprint of their operations through technology investments. That’s about embracing innovation – 26 per cent said they were very confident and 49 per cent confident they could deliver on that objective.”
Mr Hart said that the global challenge was about achieving a balance between expansion and ESG.
“The report shows the mining and metals industry as a whole is confident it can reconcile rapid output growth with sustainability goals. It can meet growing global demand without compromising its own ESG and net -zero objectives,” Mr Hart said.
Mr Hart said that the KPMG Global Mining Outlook Report analysis highlights one of the greatest conundrums facing global businesses.
“How does the mining industry pivot rapidly toward carbon-free solutions without harming the environment, while, at the same time, developing a strategy that aligns the interests of shareholders, workers, communities, consumers, and governments? It’s encouraging that the sector is confident it can deliver on growth and net zero, but we’re not saying it will be easy.”
