Heather Cheeseman, national mining leader at KPMG Canada, highlighted the significant challenges faced by the mining industry, particularly in areas like permitting, which remains a time-consuming and complex process for many companies.
She emphasized that mining leaders are finding it increasingly difficult to develop new mines, with permitting constraints showing no signs of improvement. This issue poses a major obstacle to the sector’s growth and operational progress.
Critical Minerals Supply Shortage
The KPMG report’s findings come at a critical juncture for the mining sector, as the International Energy Agency has raised concerns about a potential shortfall in crucial minerals such as lithium and copper. These minerals play a vital role in technologies that drive the global energy transition.
Despite the challenges, mining executives remain hopeful, buoyed by government support for critical minerals exploration and development. This optimism is reflected in a more positive industry sentiment compared to previous years.
Operational Risks and Growth Strategies
While optimism prevails, mining leaders are also mindful of operational risks, with issues like community relations, social license to operate, commodity price volatility, geopolitical risks, and financing access topping their list of concerns.
The report indicates a growing trend towards mergers and acquisitions (M&A) as a strategic growth approach, with an increasing number of leaders viewing M&A as essential for future expansion. Strategic alliances, joint ventures, and partnerships are also seen as crucial for accessing new technologies and capabilities.
Focus on Critical Minerals
Katherine Wetmore, GTA mining leader for KPMG in Canada, highlighted the industry’s focus on critical minerals such as copper and lithium, which continue to drive M&A activity. The report notes that a significant percentage of critical mineral deals in recent years have involved copper and lithium, essential components for renewable energy technologies and battery production.
The emphasis on securing stable mineral supply sources underscores the importance of future M&A activity in the industry.
Collaboration and Permitting Efficiency
As the demand for critical minerals rises, the report emphasizes the need for closer collaboration between industry and government. Mining leaders recognize the importance of streamlined and aligned permitting processes to meet future demands and expedite the development of new mines.
Overcoming challenges related to permitting, community relations, and ESG compliance will be crucial for the mining sector to thrive and support the global shift towards clean energy.
Additionally, embracing transformation and adaptability will be key to establishing a sustainable business model for the future. Continuous innovation and strategic partnerships will play a vital role in navigating the evolving landscape of the mining industry.
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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
