The mining industry is in a state of constant flux. Industry leaders have to adapt to the constant transformation that has been taking place in the industry. There has been a shift in the focus from cost savings to more productive and efficient activities. Core to that change has been an emphasis on operational excellence that is centered on innovation and data analysis.
In this article, we will take a look at the status of the mining industry in 2018 as well as the recent initiatives in the sector that will define the future of mining.
Present Status of the Mining Sector: An Overview
A report from S&P Global ratings titled "Top Trends of 2018: Metals and Mining" had stated that the outlook of the upstream mining industry has improved in general this year. The conditions for downstream producers, however, have been relatively flat on average, with a few variations across sectors.
Financial Prudence
Large globally diversified mining companies are focusing on financial prudence amid a generally supportive price environment. They are increasingly investing in technology in order to strengthen the foundation of security, connectivity, and management of data.
The drive for increased financial efficiency has been due to stagnation in the mining sector in general.
Stagnated Mineral Prices
Prices of main mining commodities such as gold, silver, copper, platinum, zinc, lead, and aluminum have largely remained at a subdued level.
Statistics show that between June 2012 and June 2018:
· the price of gold decreased by nearly 17.5 percent,
· the price of silver decreased by 38.5 percent,
· the price of platinum decreased by nearly 36.5 percent, and
· the price of copper decreased by about 8 percent.
While there have been some signs of an upturn this year, the flow of investment continued to remain at a low level. Until there is a significant uptrend in demand of mining commodities, this trend is expected to continue for some years.
One of the exceptions to stagnated mineral prices is lithium that has experienced a significant increase in prices since the past decade.
Price of lithium has increased from $4,390 in 2013 to about $16,500 in 2018 — an increase of about 275 percent. As compared to the past year, the price of this mineral increased nearly 81 percent. The proliferation of mobile devices such as tablets and smartphone has increased the demand for the mineral, which is used in the manufacture of lithium-ion batteries.
Another mineral whose demand has increased significantly is cobalt. The price of cobalt increased from about $24,400 in 2013 to $80,490 today — a jump of about 229 percent!
Global demand for iron has also increased. Main consumers of iron and steel include China, India, North America, and the EU, which relates to increased economic activities. The main factor that is driving increased demand for iron ore include the growing steel manufacturing market and the associated industries in emerging and developed countries.
Dwindling Energy Reserves
Reserves of energy sources including coal, oil, natural gas, and uranium have been declining.
Coal that accounts for nearly 25 percent of the energy used today is declining fast. Proven coal reserves are about 1.1trillion. At the present consumption rate, they are expected to last for another 150 years, according to World Coal Association.
Oil and gas reserves are way past their peak levels. The proven reserves at the present production levels will last for 50 and 52 years for oil and gas, respectively, as per the World Coal Association.
Worldwide reserves of uranium that are used for generating nuclear energy is about 5.7 Mtonnes. This mineral is expected to last around 90 years at the current consumption rate of about 63,000 tons per year.
Rare Earth Elements (REE)
A relatively new trend in the mining sector is the extraction of rare Earth elements (REE) such as europium, lanthanum, erbium, and tantalum. These minerals are used in the manufacture of computers, smartphones, tablets, and permanent magnets.
China has the largest reserves of REE and also is the largest consumer. Other areas where these minerals are mined include coastal areas of South Asia, Africa, and Australia. They are mined from littoral sand dune deposits also known as monazite sands.
The demandforthese rare mineralsis expected to increase in the future to meet the demand in telecommunication, electronics, and the upcoming automation in transports and services.
Artisanal Mining
Artisanal mining is a small-scale mining technique that is being used by individuals rather than large enterprises to extract gold. It is often conducted illegally in an unsafe environment.
In some cases, small companies also carry out this method to extract gold by obtaining a license. Even then, at times it’s not regulated properly. Generally, there are a large number of women and children working in such mines. Artisanal mining is also reported to cause a lot of damage to the environment.
Future of the Mining Industry
Industry experts say that the mining industry will greatly transform in the coming decades. One of the most significant impacts will be brought upon by the increased use of digital technologies, including drones, Internet of Things (IoT), 3D printing, and autonomous vehicles.
Another change that is expected to impact the mining industry in the years ahead is the EU Conflict Minerals Regulation that is expected to be implemented in 2021.
This rule reflects the efforts of the EU to stem the trade in minerals that are used to finance terror groups and armed conflicts. The rule will impact operations of mining companies based in the EU region. It has spotlighted four 'conflict minerals' including tantalum, tin, tungsten, and gold — also known as 3TG — that fuel human rights abuses. The aim of this law is to ensure that mining companies take care that these minerals are responsibly sourced.
In conclusion, the mining industry is in a state of constant change. Mining executives need to understand and adopt the technological innovation to capture increased operational efficiencies in the sector. They also need to create sustainable development goals that focus on both present and alternative resources. An internationally coordinated management of scarce mineral resources is required to ensure sustainable development in the mining industry in the decades ahead.