The mining sector is facing a complex path to scale critical materials needed for the energy transition while also balancing the competing pressures of productivity, affordability, and competitiveness.
This was a key challenge explored by industry experts at the International Mining and Resources Conference (IMARC) 2024.
Held in Sydney from 29-31 October, IMARC is the premier global industry event that brings together leaders, innovators, and professionals who are passionate about creating positive change and growth in the mining and resources sector.
What are the keys to unlock the future of mining?
1. Plan for capital investment to double
$5.4 trillion USD in CapEx is needed from 2024 to 2030 to meet future demand in mining1. With declining productivity, rising costs, and labour shortages, meeting capital demand and achieving net zero goals is more challenging than ever.
To address these challenges, Bevan Watson and Tino Grabbert, Partners at McKinsey & Company and based in Sydney, advised taking a proactive portfolio approach and setting bold targets. Mastering CapEx across the entire portfolio with a rigorous, holistic methodology will be essential.
2. Implement tech and AI solutions with empowered talent
Adopting innovative technological solutions is critical to meeting the mining industry’s productivity and sustainability imperatives. Concurrently, talent should be upskilled and empowered to prepare for the future. Richard Sellschop, Senior Partner at McKinsey & Company and based in the US, shared in his keynote presentation that investing in people will be key to the industry’s success.
Mining organisations should start with a clear business case supported by quality data to demonstrate the value of these investments and gain executive-level buy-in. Beyond carbon reduction, new mining technologies can provide the necessary productivity gains to meet capital demand.
In a panel discussion led by Milan Korbel, Partner at McKinsey & Company and based in Melbourne, technology leaders emphasised the importance of maintaining a user focus when implementing new innovations. The mining industry has the highest potential automation adoption rate of 33% by 20302. Keeping technologies simple can facilitate adoption across all levels and enable long-term use.
“This is as much about people as it is about technology,” Richard Sellschop, Senior Partner based in Connecticut, on solving decarbonisation with AI and tech.
“Everyone can add value as we implement new innovations, from technology partners to geologists on the ground,” Milan Korbel, Partner based in Melbourne, on leveraging digital technologies for productivity and operational excellence.
3. Collaborate to scale existing solutions
The mining industry has a scale, not an invention problem. In an exclusive sideline event hosted by McKinsey & Company, Patricia Bingoto, Senior Expert at McKinsey & Company and based in Zurich, presented McKinsey’s Global Materials Perspective (GMP). The inaugural report highlights the mining sector’s complex path it must navigate to scale critical materials needed for the energy transition in an affordable, timely, and sustainable manner.
Most of the technologies required for a net-zero future exist but are not yet commercially viable at scale. Around 45% of green mining technologies abate during the commercialisation phase3.
The mining sector must enhance collaboration and interoperability to scale effectively, an imperative shared by industry leaders during the event’s panel discussion facilitated by Carola Wagner, Senior Asset Leader at McKinsey & Company and based in Singapore.
David Dyer, Partner at McKinsey & Company and based in Melbourne, echoed this sentiment while moderating a panel discussion on unlocking the power of technology. Establishing trusted partnerships across the value chain enables the sharing of resources, expertise, and technology, leading to vital operational efficiencies and innovative solutions for a sustainable future.
Left to right: Moderator Carola Wagner; panelists Patricia Bingoto, Christiaan Heyning, Fortescue, Jake Klein, Evolution Mining, Michelle Keegan, AROSE.
“No single organisation can solve this challenge of scale alone – we must work together,” Patricia Bingoto, Senior Expert based in Zürich, at McKinsey’s sideline event, ‘Mining the Future: Securing Critical Materials and Leading the Way to Net-Zero’.
Australia possesses significant potential to support a sustainable future globally, with low-cost energy, critical mineral resources, and extensive mining experience. In a panel discussion to close out the conference, Victor Finkel, Partner at McKinsey & Company and based in Melbourne, shared that Australia is now in the hard part of the transition.
Substantial investment, technological innovation with empowered talent, and integration across the value chain through partnerships and collaboration are the keys to moving forward.
McKinsey is proud to be the Headline Sponsor of IMARC 2024, the premier global mining and resources conference. IMARC 2024 took place from 29-31 October in Sydney, Australia.
1 Source: MineSpans by McKinsey. Includes sustaining, growth and exploration Capex; Includes major projects, revamps & repairs, exploration; Iron ore utilised for steel making included in mining
2 Source: McKinsey Global Institute analysis; Mining industry human resources council, 2020 employer survey (2021). The survey was conducted during December 2020 and January 2021
3 Source: IEA, McKinsey GEP, MPCT. Estimated total global abatement of green technologies by stage