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Rising revenues for mining companies in 2021 indicate an opportunity for miners to become key actors in the energy transition
Financial results for 2021 showed mining companies’ revenues have increased by 32%, and net profits by 127%, according to PricewaterhouseCoopers (PwC). Mine 2022 is PwC’s annual review of the Top 40 Mining Companies, examining global trends in the mining industry.
According to Drew Stevenson, PwC UK’s Energy, Utilities and Resources leader, “The mining industry has a key role to play not only in discovering and delivering essential commodities to drive this decarbonisation pathway, but in identifying and integrating cleaner, greener methods of extraction with electric or hydrogen powered engines and minimising waste.”
Emerging as leaders in the energy transition is imperative as the demand for critical minerals such as lithium, copper, nickel, and cobalt is projected to increase over the coming years, with recent data indicating demand from clean energy technologies will reach over US$400bn by 2050. In July 2021, mining company Anglo American plc completed the demerger of its South African thermal-coal operations, creating the new entity, Thungela Resources Limited; by the end of 2021, Thungela Resources’ share price on the Johannesburg Stock Exchange and the London Stock Exchange had quadrupled, according to the report. Anglo American plc placed ninth out of the top 40 on the report, moving up by two places.
The global quest to reach net-zero will require more mining, while the increase in low-emission energy systems such as solar, wind, and electric, will inevitably be material-intensive. A solar farm, for example, requires three times more mineral resources for its production compared to a coal plant, while wind farms need 13 times as much as a gas-fired plant.
Paul Bendall, global leader, Mining & Metals, PwC Australia, said, “Mining companies, particularly the Top 40 referred to in this report, must continue to develop strategies to enhance trust.” He added, “Only by developing and maintaining trust with a broad range of stakeholders will miners’ social license to operate be assured.”
PwC’s full report can be read at: https://www.pwc.com/gx/en/industries/energy-utilities-resources/publications/mine.html