The State of the Mining Industry: Trends and Challenges

The state of the mining industry is in a favourable position as it comes out of year one of the COVID-19 pandemic economic crisis, especially compared to many other industries. Between the Americas, APAC, and EMEA regions, the mining sector has seen revenue grow from roughly USD 123 billion to more than USD 288 billion over the last few years.

Several sectors of the mining industry are expected to see rapid growth over the next five years due to emerging trends pushing the industry forward. For example, the increasing adoption of new technologies such as the adoption of drones for coal mining is starting to become an emerging trend in numerous mining sectors. Site managers are using drones as an effective site monitoring and surveying aid. Drones provide value in mining by being useful for underground area mapping, safety, and rescue applications. The increasing adoption of drones in the mining industry is expected to reduce the operational and HSE (health, safety, and environment) costs of mining companies. The global mining market is expected to grow from US$ 1641.67 billion in 2020 to US$ 1845.55 billion in 2021 at a compound annual growth rate (CAGR) of 12.4%.

Despite the great recovery from the COVID-19 pandemic economic crisis and the great potential for future growth of numerous sectors in the mining industry, there are many challenges ahead. Some of the major challenges facing the mining industry are mostly related to its environmental footprint affecting climate change initiatives. The reduced demand for coal due to environmental concerns, the emergence of renewable energy as a competitor, and falling gas prices are current challenges affecting the global mining industry.

In the following article, we will elaborate on some of the major trends and challenges expected to impact various sectors of the mining industry.

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What is the mining industry?

Before we dive into the future trends and challenges of mining, it is important to define the industry. BizVibe’s platform contains nearly 20,000 mining companies which are segmented into five categories. Those categories being oil and gas extraction, coal mining, metal ore mining, nonmetallic mineral mining, and support activities for mining.

Each category is being transformed by its own set of trends and challenges that will greatly influence the direction of the mining companies in the coming years. Below we will discuss the trends and challenges of categories across the major mining sectors.

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Oil and Gas Industry: Oil and Gas Extraction

Emerging Trend – Focus on Fracking Technology

There has been an increase in the use of fracking technology by oil companies to extract oil and gas from sites where normal extraction is difficult. However, hydraulic fracturing fractures rock beds with high-pressure water to release the natural gas or oil deposit in the rocks. The modern approach in the industry involves focusing on the development of innovative fracking technologies, such as waterless reservoir stimulation, to minimize water usage in the process.

Major Challenge – Demand for Alternative Energy Sources

The global landscape is moving towards environment-friendly renewable energy sources driven by an increasing push by governments and the general public. The movement around climate change and global sustainability is highly advocating renewable energy sources against fossil fuels such as oil and gas. Industries and corporations are taking an active approach to controlling their carbon footprints and encouraging the adoption of greener technology in their supply chain. These trends are expected to threaten the market share of the oil and gas sector.

Metal Ore Mining Industry

Emerging Trend – Adoption of Artificial Intelligence

The adoption of artificial intelligence in metal ore mining enables the operators to achieve economic benefits through cost reduction and improved productivity. Real-time data and analytics is helping operators to take measures to prevent accidents. The data can be utilized for predictive maintenance purposes as well. It is expected that more metal ore mining operators will implement artificial intelligence and data-driven solutions in their operations to achieve business objectives.

Major Challenge – Rising Labor Cost

With margins always under threat from competitive and other external forces, leading metal ore mining companies are struggling with rising labor costs. The rise in minimum and average wages due to the government or competitive push are impacting the cost operators have to incur in securing even low-skilled jobs. The pinch is more prominent for operators who have a higher proportion of permanent staff.

Nonmetallic Mineral Mining and Quarrying Industry

Emerging Trend – Positive Long-Term Support for Construction

Rapid urbanization, rising income levels, global infrastructure development, and favorable regulatory support are long-term trends that will continue to support construction activities around the world. Despite the coronavirus-led impact on the global economy, the construction industry is expected to bounce back once government efforts for economic revival gain momentum. Gypsum, sand, silica, and limestone are immediate inputs to the construction industry and their demand will follow the long-term construction market performance.

Major Challenge – Stringent Regulations

The stringent regulations around drilling and mining-related to licensing, environmental safety, operational practices, and worker safety increase the compliance burden on operators. Operators are spending additional time, cost, and effort to comply with all the rules and guidelines. Even bigger concerns are the legal expenses, penalties, and damage to reputation in case of violations.

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Mining Industry Companies on BizVibe

BizVibe’s platform contains nearly 20,000 mining company profiles which are free to view. Each profile consists of in-depth company insights, comprising 50+ data points, including full industry trend and challenge analysis for five mining categories.

BizVibe company insights help provide answers to questions such as:

✓ How will industry challenges impact specific geographic regions?

✓ Which regions will emerging trends be the most prominent?

✓ What are a company’s major product and service offerings?

✓ Who are the company’s key executives and what are their roles?

✓ How is a company positioned financially?

✓ Who are the company’s major competitors?

✓ What is the risk level of doing business with a given company?

✓ What is the latest company news?

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