Green metals demand is raising, and such increase could suppose a growth opportunity for Canadian mining companies; as it is contributing to renewed optimism in the industry, said KPMG in its latest Canada report, Risk and Opportunities for Canadian miners.
Firstly, demand for minerals like lithium, cobalt, and nickel is boosting rapidly; as theyr are vital for the development of key components for the green industry; such as batteries, wind and also solar and geothermal power.
Secondly, according to the World Bank, demand for such metals would increase by nearly 500 per cent by 2050. Particularly the demand for lithium will boost by a factor of 30 by 2030, according to the International Energy Agency.
Thirdly, Heather Cheeseman, partner and Toronto mining leader; KPMG in Canada, said about the matter. “The outlook for the mining industry is extremely positive. The year-long rally in commodity prices, even with the recent volatility sparked by inflationary concerns; comes from the pandemic-induced supply chain issues; but also, from the climate-action demand for green metals and the massive spending expected on infrastructure.”
However, there are some factors that could dim the growth of Canadian mining companies; and those are the ones related with the ESG criteria; the idea of how companies respond to environmental, social, and also, governance (ESG) risks, and technological transformation.
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Green metals, technology adoption, the opportunities
Moreover, this concern has been increasing even more during the pandemic; as it has accelerated the focus on how credible, reliable, and also, accepted mining companies and projects are in the local communities where they operate; explained Ms. Cheeseman on the study’s report.
In addition, she remarked. “The days of considering ESG factors as ‘soft’ secondary risks are long gone. Investors are demanding miners to have clear and measurable strategies in place. ESG now dominates the boardroom conversations in every mining company; and also, mining leaders overwhelmingly agree this is a top priority.”
Furthermore, there’s is yet another risk for Canadian miners to stay competitive: digital adoption. According to the study, about a third of Canadian and global miners believe innovation and also technological transformation will drive future growth; nearly half expect major technology disruption in the next three years.
However, only a third of Canadian miners say their organization is actively disrupting the industry through digital innovation; when compared to the rest of the global miners polled for the study, Canadian miners are very low on this matter.
Finally, while access to capital had previously been a top risk, more Canadian miners now say their ability to access equity financing has improved over the past year, largely due to investor interest in the green economy transition. You can read the full study, here.