A biologist who worked in a brewery. A gemologist. A salt-mine engineer. What do these three people have in common? They’re on the team behind McKinsey’s MineSpans solution. They collect and analyze data to build cost curves and supply and demand models, and provide key insights for mining companies and financial institutions around the world.
The MineSpans data covers 3,700 individual mining operations, with 100 to 150 data points per mine, and draws from 85 years of industry expertise. The data provide users with the reliable information they need to make strategic decisions.
“Our clients can use MineSpans to understand where global commodity prices could potentially move and how costs should evolve, where new supply is coming from; the economics of specific projects, the role of China in the market, and how the industry cost structure will evolve across mines, competitors and commodities,” explains Eduardo Mencarini, the solution leader who is based in our Brussels Innovation Center.
In addition to the solution’s baseline scenarios, users can apply their own assumptions on, for example, exchange rates and factor prices—and see the effects on the cash flows and individual assets, as well as develop personalized supply, demand and cost curves.
In less than two years, the solution has grown from one copper curve to a portfolio of six commodities. This quarter, it will add one more—cobalt, which has seen exponential growth in demand for use in electric-vehicle (EV) batteries. For the same reason, demand for nickel and lithium are also expected to boom up to and beyond 2025—a powerful force reshaping the mining landscape.
“Our team has looked at the ways that additional supply, recycling, and new battery-technology development could work together to rebalance this surge in demand—and temper possible shortages,” says Eduardo.
The idea for MineSpans can be traced back 5 years ago—to three colleagues from the Basic Materials Practice and one partner with a vision. “At that point, we were buying mining data from other companies, but we believed – backed by our senior partner Sigurd Mareels – that we could create a more reliable service ourselves—with data that were more accurate, flexible, and transparent,” remembers Friso De Clercq, who heads up data management for the solution. Liesbet Grégoir and Patricia Bingoto, rounded out the team back then.
Developing the solution was a labor of love, carried out alongside their regular jobs. “We welcomed any help we could get in gathering, cleaning, and sorting the data into numerous spreadsheets and then merging them,” recalls Diederick Roodt, who started his career in the coal mines of South Africa. What they got that first year was a rotating team of 25 summer interns hailing from a wide variety of backgrounds including medicine, law, and business.
By 2015, the multidisciplinary team built its first copper cost curve and supply outlook—and soon asked for the funding to turn MineSpans into a full-fledged product.
Today, the growing team includes data researchers and IT, analytics, modeling, and metals-and-mining experts. The range of commodities MineSpans covers has evolved with the team and now includes copper, iron ore, gold, potash, zinc and uranium. Cobalt is next, while lithium, nickel, aluminum and coal are also on the radar.
The people working on these commodities are as diverse as the commodities themselves. Friso completed a PhD on tin and tungsten in Rwanda before joining the Basic Materials Institute as a researcher. Liesbet is a master in geology with deep expertise in iron ore and steel, potash, cost modeling, strategy and pricing. Tom Voet, the brewery biologist, joined as a student intern and now works on iron ore.
Pawel Kalka, who is responsible for advanced analytics in Poland, previously worked in a quarry and salt mine. Diederick Roodt traded in his hard hat and cap lamp for crunching copper data and leading data management with Friso. Dawid Lipus, an oil and gas engineer by training, leads the gold-supply and cost-data team, while Tom Thys, a rough-diamond expert and Martyna Brychcy, a gemologist, lead quality control on copper.
While some of the team have been at McKinsey for a decade or more; for others, MineSpans is their first job outside of a mine.