McKinsey: Technology’s role in mineral criticality (World Materials Forum)

Check out a real Mckinsey presentation on mineral criticality.

McKinsey: Technology’s role in mineral criticality (World Materials Forum)

Key Learnings from the Presentation

The McKinsey presentation, titled “Technology’s Role in Mineral Criticality,” presented on 22 June 2017 delves into the intricate dynamics between technological advancements and their impact on the demand and supply of critical minerals. It offers a comprehensive analysis across various segments, from overarching trends to specific commodity deep-dives like copper and iron ore. Here’s a structured summary highlighting the key insights, findings, and recommendations provided:

Technological Impact on Mineral Demand

• Historical Context: Changing technologies have historically driven significant growth in mineral demand, as illustrated by the commercialization of lithium-ion batteries by Sony in 1991, which propelled the demand for cobalt and lithium.
• Future Trends: Emerging technology trends driven by socio-economic changes, such as urbanization, the rise of the middle class, especially in Asia, and the adoption of new technologies (e.g., 3D printing, autonomous vehicles), are set to dramatically influence mineral demand. However, predicting these trends’ impacts on specific minerals is challenging due to their unpredictability and varying potential impacts on the consumer industry.

Supply Challenges and Opportunities

• Current Limitations: Many commodities might not sustain a rapid demand boom without additional developments and investments, highlighting the finite nature of current economically viable reserves.
• Untapped Potential: Despite significant untapped mineral resources, investments are currently concentrated in developed mining regions, with regions like Africa and Asia (excluding China) seeing lower investor interest.
• Strategic Responses: The industry can optimize existing operations, expand current operations, fast-track projects, and expand the project pipeline to meet potential demand booms. Implementing technologies like advanced analytics can significantly enhance yield and operational efficiency.

Productivity and Technology

• Productivity Lag: Mining productivity has been improving but still significantly lags behind peer industries, necessitating technological interventions.
• Technological Solutions: A wide range of existing and emerging technologies offers solutions to mining productivity issues, from drill and blast optimization to advanced analytics and automation.

Commodity Deep-Dives

• Copper: The copper market is expected to remain in a delicate balance between supply and demand, with emerging technologies potentially raising copper demand significantly. Other trends could disrupt the industry, such as government intervention and environmental considerations.
• Iron Ore: Iron ore faces challenges from slowing steel demand and increased scrap consumption. The industry has maintained profitability through new technologies, including autonomous vehicles and centralized operations centers.

Strategic Recommendations

• Criticality Assessment: Factors determining the criticality of raw materials include supply, demand, financing and responsibility, political stability, and technological advancements.
• Cooperative Effort: Increased cooperation between stakeholders is essential for timely investments and technology adoption to address the challenges and opportunities in mineral criticality.

About McKinsey

McKinsey & Company stands as a premier entity in the global management consulting sphere, initiated by James O. McKinsey in 1926. Anchored in New York City, this firm has carved a distinguished position in the consulting arena, offering strategic guidance across the globe to a diverse clientele that includes businesses, governments, and various institutions.

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