Mining is facing a crucial juncture. In order to support the energy transition, the industry must simultaneously reduce its carbon footprint across its processes and deliver additional minerals and metals. It also needs to address the unfavorable public opinion of its operations.
Reports from the international resources research group State of Play include Mining Strategy in a Changing World and Unearthing Tomorrow—Trends Shaping the Future of Mining. To provide analysis based on their expertise, they consult hundreds of leader surveys and interviews. They also feature solitary research projects that explore these intricate issues.
Since 2012, State of Play has been generating studies for the mining sector.
The director of Discovery Research at CSIRO is Dr. Sandra Occhipinti. These reports are independent and have been gathered through data and interviews. In relation to natural resources, they examine evolving perspectives and behaviors concerning the environment, the economy, and geopolitical matters, the spokesperson adds. “It’s important for us to understand what others are thinking and to support a platform that independently translates that thinking into something tangible for us to better understand what we have to do in the future.”
For The State of Play trends report, interviews were conducted with over 720 miners from 50 different nations.
Since 2017, the biannual State of Play reports have been funded by METS Ignited, a government-industry growth center. People with profound insights into mining and related industries are highly valued by them.
Before METS Ignited concluded its operations late last year, Adrian Beer served as its longstanding CEO.
“These are unique reports where the industry itself presents its challenges, so it’s really grounded in reality,” he states. “That’s what makes them so powerful compared to a lot of the other macroeconomic analysis.”
Because of the scope of its activities, the industry as a whole finds it difficult to put together a comprehensive picture.
The reports’ primary source of inspiration and founder of State of Play is Graeme Stanway.
“In heavy industry, there is a significant knowledge gap about strategic innovation. The majority of analyses, according to Stanway, relate to sectors of the economy that prioritize speed and minimal capital requirements over strong community ties. “That’s quite a different dynamic to resources.”
The intricate power play of the energy transition
There has been a notable change in public opinion regarding energy between the 2021 strategy and the latest report.
Regarding the external factors influencing strategy, technological advancements and environmental constraints were about equally represented in the survey responses in recent years. The primary force now is energy, according to Stanway.
Which worldwide trends over the next 15 years will have the largest influence on innovation was the question posed in the strategy report poll. The energy transition received a resounding 71% of nominations, up from 54% in 2021. Both technological change and environmental pressures decreased in 2021, with the former at 60% and the latter at 53%.
“There’s been a steady shift in climate change and the energy transition, being major drivers that industry insiders are predicting will influence mining into the future,” said Dr. Occhipinti. “The 2017 report’s poll did not include the energy transition at all. People say that it will have the most impact on innovation, thus you can draw a straight line up from 2019 to 2023.”
“The latest reports bring into sharper clarity the complexity of the challenge around energy and how it’s impacting mining as a key supplier to the clean-energy transition,” Beer states.
Not development but revolution
“This shift for our industry is a revolution, not an evolution. According to Beer, the sector is well known for maximizing output and efficiency while drawing every last bit of resource possible. For decades, innovation has progressed in this manner, but optimizing your way to a sustainable energy transition is not possible. It needs a major overhaul. It is not possible to just flip a switch to stop current mining activities, which must suddenly increase production in order to provide the resources required for that shift.”
Not simply essential minerals are needed for the transition.
“There are a whole lot of existing metals and minerals that we will require in greater volumes, too,” Beer adds. “We must produce more of them than we are able to right now.” They must be produced in a manner that differs from how we do it now. The techniques we employ to extract, recover, process, and supply those minerals also need the utilization of various energy sources.
“All of those things need to change simultaneously.”
Will the green premium appear?
The energy revolution requires new mines. In the meanwhile, standards for a social license to operate are rising for current developments due to rising community expectations.
“The studies draw attention to the lack of knowledge regarding the importance of the work that the mining industry performs nowadays. Critique frequently concentrates on the signs rather than the cause. Because mining produces so many emissions, it’s really simple to criticize the industry,” Beer argues.
The sector still faces the challenge of implementing new low-emission processes and energy sources while contending with persistent cost factors.
“We’re at a crossroads because if something costs more to produce, at the end of the day most people can’t afford to buy that car or battery or whatever it is that has been produced from mining,” said Dr. Occhipinti. The cost of reducing emissions and speeding up the time it takes to make discoveries is now more important than supply and demand, but it’s still a very delicate balance. We are walking a tightrope.
The tightrope being traversed is whether a sufficient number of consumers are ready or able to pay more for “green” items, with ethical supply chains operating concurrently.
Dr. Occhipinti states, “I just don’t see that happening.”
Stanway accepts. “There’s a lot of skepticism about the green premium,” he claims. “When a consumer of a product is five or six steps away from the process or the provenance, it gets harder.”
Having said that, all three think that mining businesses will gain from increased openness in dialogue and interaction. This encompasses both the larger community of end users and the local communities that they directly affect through their operations.
“There are issues around the places we need to explore and mine and also the people we want to attract into the industry—we are all part of the community,” said Dr. Occhipinti.
“The people you want to work in the sector won’t come to you if your town lacks favorable views. Protests will cause disturbance, and you’ll lose your ability to act in society. These findings demonstrate that the industry is becoming more cognizant of the need for improved explanations of our actions, motivations, and methods.
It’s evident that, despite financial constraints, social license is more important than ever. As stated in the strategy paper, an unnamed research organization’s CEO states: “Whoever can find a way whereby we can deliver exceptional returns to investors in a way that’s acceptable to a broader community—that’s what’s going to win.”
