Three Key Mining Trends to Watch For in 2024
TECHNOLOGY
As the mining industry increasingly adopts technological integration, the threat of cyber attacks and data leaks is steadily rising. Therefore, enhanced cybersecurity is becoming a crucial component of risk mitigation as the pace of digital transformation accelerates across the sector. According to Ernst and Young’s 2022 Global Information Security survey, 54% of mining and metals companies have suffered a significant cyber-attack. This alarming statistic reinforces the importance of having a team of experts with different skills, including risk mitigation and risk transfer to reduce the frequency and impact of these attacks. Employee and user education is another critical factor in building proactive protection as the majority of cyberattacks are a result of human error. Andrew Russell, Managing Partner and National Mining Leader, BFL CANADA, explains:
“A lot of this comes down to the board taking a definitive approach to say, cybersecurity is important to our organization.”
CRITICAL MINERALS
Critical Minerals offer a generational opportunity for Canada across the project life cycle from exploration, development, construction and mining to downstream manufacturing and recycling. The Canadian Government has identified 31 critical minerals with a focus on six; lithium, copper, graphite, nickel, cobalt, and rare earth elements (REEs). These commodities are foundational for the green and digital economy transition. Global financial markets are pricing climate risk into investment decisions, therefore money is flowing into well-managed businesses looking to act as stewards for this revolution. This development is particularly relevant for the mining sector which struggles to raise capital for projects required to meet increasing demand for minerals crucial to the energy transition. From an ESG standpoint, mining activities can pose environmental impacts beyond pollution, particularly with regards to Indigenous Peoples’ rights. The World Economic Forum estimates that 54% of critical minerals lie near Indigenous Peoples’ land. Wherever your business explores and whatever environment it touches, a risk transfer strategy that covers all aspects is crucial. Behzad Ghods Peng, Vice President, National Mining Practice, BFL CANADA says:
“The pursuit of critical mineral resources to support the energy transition carries substantial risks, and we understand the stakes for each core sample, discovery and delivered product. Our risk engineering and client advisory teams can help identify hidden risks in your operations and accurately quantify your business interruption risks to build resiliency into the business.”
M&A
The rise in M&A activity across the mining industry over the past year is likely to continue into 2024. To service new demand for critical metals (particularly those essential to the energy transition), the tumble certain battery-critical commodity pricing, and the headwinds toward the development of new mining projects will drive corporate activity among miners. Furthermore, the necessity to replenish reserves are anticipated to spur transactions in the gold industry. Another notable trend is precious-metal miners’ diversification of base metals, most notably copper. Copper is fundamental to renewable energy infrastructure and energy storage systems. As Evs. A FitchRatings Special Report — “Global Mining M&A”: Here to Stay comments:
Lower commodity prices in 2023–2024 will lead to a normalization of cash flows across the industry but M&A could present opportunities for further synergies among higher-cost, smaller companies and larger diversified firms.
It’s evident that the mining landscape is evolving rapidly, guided by technological advancements, critical mineral demand, and strategic M&A maneuvers. Embracing cybersecurity measures, harnessing the potential of critical minerals, and navigating the dynamic M&A environment will be pivotal for companies aiming to thrive in this transformative era of the industry.
