Tag Archives: metals

EY addresses Americas mining and metals company needs with new Centre of Excellence

EY Canada has announced the launch of an EY Americas Mining and Metals Centre of Excellence that, it says, will offer companies across the Americas access to cutting-edge services and innovation-led solutions that meet the most pressing needs of mining and metals businesses, today and in the future.

“Post-COVID-19 investments in infrastructure, combined with demand to sustain the energy transition, will drive significant growth in the mining and metals sector over the next three to five years,” Theo Yameogo, EY Americas Mining and Metals Leader and the man leading the centre’s charge, said. “But capitalising on these opportunities is going to require a major pivot – and we want to be there to support companies as they navigate the path forward. While working cross-collaboratively with our colleagues in the Americas to combine our business and technical expertise with emerging technologies, the centre will ground us under one unified vision to help companies drive meaningful and long-term growth.”

Powered by EY wavespaceTM, the centre’s integrated, business-led and technology-enabled approach will, EY says, support the growth ambitions of mining and metals companies by focusing on four key areas:

  • Technical expertise: bringing advanced knowledge and understanding of the unique business landscape, including reserves and resources, mine planning and tailings management;
  • Digital transformation: connecting the dots to link investments to value realisation through strategic roadmaps, prioritisation of initiatives and disciplined execution;
  • Operations management: improving efficiency and productivity in operations through data-driven diagnostics, culture uplift and integrated planning and execution; and
  • Decarbonisation and ESG: supporting adoption of carbon footprint analytics, greater energy optimisation and increased health and safety.

Jad Shimaly, EY Canada Chairman and CEO, said: “The mining and metals industry is an integral part of our Canadian fabric, and is poised to be an increasing contributor to job and economic recovery moving forward.

“We’re excited the centre will allow us to play a role in enabling Canada’s journey in the energy transition, while supporting mining and metals companies as they look to develop innovative and sustainable solutions that deliver long-term value for stakeholders.”

The first Americas Mining and Metals Centre of Excellence will be hosted in Canada, with an additional location operating in Latin America later this year, according to the company.

Metso Outotec completes Metals business reorganisation

Metso Outotec says it has completed the reorganisation of its Metals business as part of the turnaround program announced in the December quarter of 2020. As a result, the segment’s operational model has been adjusted to “better meet customer needs, as well as the scale and nature of the business today”.

When the negotiations related to the reorganisation started on December 9, 2020, the estimated need for reduction was a maximum of 160 permanent redundancies in the Metals operations globally, including up to 60 redundancies in Finland.

As a result of the negotiations, approximately 100 jobs will be reduced globally, including 15 in Finland. Most of the global reductions are through redundancies and the rest through other arrangements, such as retirements, non-renewal of fixed-term contracts, and voluntary resignations, the company said. In addition, over 50 employees who were in the scope of the Metals reorganisation will continue in Metso Outotec in other parts of the company.

Jari Ålgars, President, Metals business area at Metso Outotec, said: “The reorganisation of the Metals business aims for annual savings of €15 million ($18.1 million). During the negotiations, we carefully evaluated all opportunities with the target to find the best possible options to meet the needs of our customers and employees. The now completed reorganisation empowers the Metals business lines for efficient use of resources and faster decision making.”

Metso Outotec to reorganise Metals business

Metso Outotec says it is reorganising its Metals business as part of an earlier announced turnaround program.

The target is to create an operational model for Metals capital and services that “suits the scale and nature of the business today” and meets the specific demands of the Metals refining segment customer base, it said.

Jari Ålgars, President, Metals business area at Metso Outotec, said: “The restructuring and turnaround program aims to improve Metals’ competitiveness and financial performance as well as ensure more granular management of the various businesses and resources. The restructuring will enable us to size and scope our offering and resources in a more efficient way.”

Around 1,100 employees working with the Metals capital and service business around the world are within the scope of the restructuring program. According to the plans, restructuring is estimated to lead to a maximum of 160 redundancies in the Metals operations globally, corresponding to targeted savings of €15 million ($18 million). These figures include personnel working in Finland, where the number of redundancies is estimated to be 60 employees at most.

The impact of the restructuring on different employee groups will be determined during the March quarter of 2021, the company said, adding that actions will be taken in compliance with local employment legislation in the countries in question.

Emissions, resource access, finance, big data, social licence to drive mining’s future: WEF

The transition to a low-carbon economy, access to resources and new ways to finance mining are just some of the drivers the World Economic Forum’s (WEF) Nicolas Maennling and Perrine Toledano believe will shape the future of the mining and metals sector.

Maennling and Toledano, co-curators of the WEF’s Transformation Map on Mining and Metals, said the industry was recovering from one of its most difficult periods in decades, with market volatility and a downturn in commodity prices creating “a new normal” where cost cuts, automation and operational efficiency are vitally important.

“Meanwhile, industry-specific issues related to regulation, geopolitical risk, legal limits on natural resource use, shareholder activism and public scrutiny have created additional challenges,” they said.

“While we believe that demand for minerals will grow in the coming years, there are several trends that will determine which types of mining companies will prevail in the future.”

The two then went on to spell these seven out.

Transition to a low-carbon economy

“Demand for most minerals is projected to be high in order to achieve the energy transition. While fossil fuels have helped to improve living standards around the world since the 18th century, their associated greenhouse gas emissions have led to global warming. In order to avoid reaching temperatures that will have catastrophic consequences for the planet, countries must decarbonise their energy systems by the middle of this century,” they said.

“Given that low-emission energy and transportation systems are more mineral-intensive than their fossil fuel-based counterparts, the transition provides a great opportunity for the mining sector. At the same time, the mining sector will have to reduce its own emissions. Mining companies that power their operations with renewable energy, operate electric or hydrogen-powered truck fleets and integrate recycling in their value chains will be best placed to sell low-carbon premium minerals.”

Access to resources

“Companies will need to venture into frontier mining areas. As world-class mineral resources in low-risk areas become exhausted, mining companies must either master new technologies for extraction and processing, or venture into frontier areas where extraction has not previously been economically viable,” the authors said.

“Automation and digitalisation will result in more targeted and efficient mining, which could further be enhanced through technological breakthroughs in areas such as in-situ leaching (a mining process used to recover minerals such as copper and uranium through boreholes drilled into a deposit), block caving (an underground mining method that uses gravity to exploit ore bodies located at depth) or bio mining (a technique for extracting metals from ores and other solid materials typically using prokaryotes or fungi).

“Mining jurisdictions with higher perceived risks may see increasing levels of interest from investors. In the search for high-grade ore deposits, deep sea and asteroid mining will be increasingly explored by governments and companies. While these technologies will open up new ways for mining companies to optimise the valorisation of existing resources or allow access to new ones, they are unchartered territory in terms of business models, processes, and potential social and environmental externalities.”

New ways to finance mining

“As mining companies try to limit risk, novel financing and production models will become more common. After demand from China triggered a commodity boom in the first decade of the 21st century, prices collapsed and mining companies were forced to focus on reducing debt ratios and improving their balance sheets. Alternative financing solutions were developed such as royalty and metal stream agreements that reduce the burden on mining companies’ balance sheets,” Maennling and Toledano said.

“To spread the risk of new capital-intensive projects, these financing solutions are likely to continue to grow. Companies may also seek to develop joint ventures similar to those observed in the oil and gas sector in order to reduce their exposure to a particular project or jurisdiction and may also consider service agreements.”

A social contract for mining

“Creating real benefits for communities near mine sites will be key for successful new projects. Obtaining the ‘license to operate’ from local communities has been a challenge for the mining industry in recent years. Many proposed projects have been rejected, and operations have been disrupted by protests,” they said.

“With a record number of mines nearing the end of their life and insufficient money being set aside for remediation; with new mining projects increasing the sector’s footprint without necessarily providing additional employment opportunities at the local level due to automation; and with increased water stress and extreme weather events due to global warming: local opposition to mining is likely to increase if no new business models are developed that benefit the affected communities.”

Big data and mining

“Data transparency to aid the mining industry’s relations with stakeholders. Collecting and processing massive amounts of data will be essential for mining companies as they digitalise and automate their operations. What data should be shared and made transparent will continue to be a major area of debate,” they said.

“Governments will seek to further push for disclosure of subsidiary structures to address tax base erosion; consumers will seek to increase value chain transparency; investors will use the proliferation of non-financial data to better assess the risks of their mining portfolios; civil society will continue to push for companies to go beyond the mandatory EITI Standard; and impacted communities are particularly interested in accessing data that capture the externalities that affect them.

“It will be key for companies to work together with other stakeholders in order to understand the types of data that should be made available and the appropriate format that data disclosure should take, in order to ensure standardization, usefulness and impact.”

The geopolitics of mining

Maennling and Toledano said: “Mining companies must navigate rising geopolitical risk and economic protectionism. A growing popular resistance to globalisation and free trade is altering politics, and directly affecting the mining and metals sector. Policymakers in mining jurisdictions are increasingly trying to enact local content laws and regulations which require minerals to be processed before they are exported.

“At the same time, import restrictions on semi-finished products such as steel and aluminium are at the centre of recent trade disputes. Trade wars and increasing protectionism are likely to dampen global commodity demand and disrupt the value chain of mining and metals companies. In the ‘critical minerals’ sector, which is central to high-tech and future-oriented industries, this trend is further complicated by market consolidation in the hands of a few players.

“Further consolidation, geopolitical manoeuvring and muscle-flexing could create challenges for companies that have so far prospered under a system of relatively free trade – while creating opportunities for domestic projects that might not be economically viable without government intervention.”

Modern mining workforces

“Maintaining an open dialogue will be key as mining companies try to revamp their employee base. Constantly evolving technologies and business models will require mining company employees to develop new skills. The sector will have to increasingly compete with the IT sector to attract top talent from universities in order to drive its digitalisation and automation processes. Governments and companies will have to work together to help transition workers that cannot be absorbed by an automated mining sector to new activities through retraining and transitioning programmes,” the authors said.

“The speed at which mining companies will be able to rollout new technologies at their mine sites will be closely linked to the host government’s and labour unions’ acceptance of reduced employment and procurement opportunities. As such, these actors need to be involved in the decision-making around the transition and in strategizing policies to support those who will be negatively affected.”