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Researched by Industrial Info Resources (Sugar Land, Texas)--As with other industries, project activity in the global Metals & Minerals Industry slowed in 2020 as the COVID-19 pandemic took hold, but 2021 brought a marked increase in activity, which is expected to continue this year and next. Global gross domestic product (GDP) recovered last year, allowing several previously delayed and deferred projects to restart. But the energy transition is changing the type of activity being seen in the Metals & Minerals Industry. In a Wednesday webinar, Joe Govreau, Industrial Info's vice president of research for the Metals & Minerals Industry, discussed the spending outlook for this year and next, and how it has changed both in regard to specific geographies and commodities.
According to Govreau, the energy transition is changing the activity being seen in three major components of the Metals & Minerals Industry: mining, smelting and steelmaking. The implementation of renewable energy sources and battery metals demand is changing the types of projects being seen today. "In addition to the projected demand growth from metals and minerals," said Govreau, "decarbonization is forcing the industry to reinvent how it mines, refines and recycles in order to reduce carbon intensity. This is bringing in developments in automation, new equipment and process technology. Automation and electrification of mining equipment is one example of this trend. ... Many facilities are implementing renewable energy and battery storage or microgrid solutions. Globally, we're tracking more than 800 of these independent power projects at mines, smelters and steel mills totaling about $35 billion."
So what else has changed in the project landscape? Lithium-ion batteries, powering everything from mobile phones to laptops to electric vehicles, have certainly been a game-changer. Many car companies plan to phase out production of internal combustion vehicles by 2035 in favor of electric. This has led to some major auto producers, such as Tesla Incorporated (NASDAQ:TSLA) (Austin, Texas) and General Motors Company (NYSE:GM) (Detroit, Michigan) to invest directly in mining projects to ensure a source of battery metals, including lithium, cobalt, nickel and others. There also has been an increase in battery recycling projects, seeking to reuse these metals.
Cement and steel mills are implementing carbon capture and storage technologies, and company shareholders are increasingly demanding increased attention to environmental, social and governance (ESG) issues.
Govreau delved down into how these changes affected specific regions.
U.S. & Canada
"Looking at the U.S. and Canada, we saw a significant increase in project starts last year--about $27 billion worth of project starts in 2021, compared to $16.6 billion in 2020," Govreau said. He expects the increased level of activity to carry on this year. The U.S.' $1.1 trillion infrastructure bill will benefit aggregates, cement, steel, copper and aluminum producers supplying bridge, rail and highway construction projects, not only in the U.S., but also Canada, which supplies a large amount of aluminum and cement to the U.S.
Latin America
"This region continues to be dominated by mining project development," said Govreau, "especially in Brazil, Chile, Mexico and Peru." But the activity has been impacted by a number of factors, including social unrest and resources nationalism. Chile and Peru are looking at increasing taxation on mining developments to support social improvement projects, while Mexico is examining state-run lithium extraction.
Europe
Europe continues to update its steelmaking and aluminum smelter fleets to newer and cleaner technologies. Govreau said, "The EU is leading the world in decarbonization plans, and several countries announced plans to get out of coal, and most steelmakers are planning massive retrofits of the iron and steelmaking processes in Europe. So that's driving a lot carbon capture and storage projects along with hydrogen electrolysis for direct reduced iron production." High energy prices are causing aluminum and zinc smelters to be shuttered, leading to supply issues.
Oceania
Australia continues to be the export market of choice for much of Asia, especially for coal and iron ore. A feud with China banned Australian coal imports more than a year ago, but the country has been able to find other markets. "While coal mining projects are declining in the country," said Govreau, "there remains considerable expenditure planned, mainly for expansions and mine life extensions in Queensland and New South Wales." Govreau said demand for iron ore has increased with the pandemic recovery, and most of Australia's steelmakers and iron ore miners have been expanding production and distribution infrastructure. Govreau said Australia is a proving ground for many new mining technologies aimed at optimizing productivity, such as autonomous hauling and drilling equipment, hydrogen fuel cells, and electrification.
Industrial Info's series of complimentary webinars provide timely and relevant information across a range of industrial sectors. Make sure to check out our Upcoming Webinars page to see what's next!
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
According to Govreau, the energy transition is changing the activity being seen in three major components of the Metals & Minerals Industry: mining, smelting and steelmaking. The implementation of renewable energy sources and battery metals demand is changing the types of projects being seen today. "In addition to the projected demand growth from metals and minerals," said Govreau, "decarbonization is forcing the industry to reinvent how it mines, refines and recycles in order to reduce carbon intensity. This is bringing in developments in automation, new equipment and process technology. Automation and electrification of mining equipment is one example of this trend. ... Many facilities are implementing renewable energy and battery storage or microgrid solutions. Globally, we're tracking more than 800 of these independent power projects at mines, smelters and steel mills totaling about $35 billion."
So what else has changed in the project landscape? Lithium-ion batteries, powering everything from mobile phones to laptops to electric vehicles, have certainly been a game-changer. Many car companies plan to phase out production of internal combustion vehicles by 2035 in favor of electric. This has led to some major auto producers, such as Tesla Incorporated (NASDAQ:TSLA) (Austin, Texas) and General Motors Company (NYSE:GM) (Detroit, Michigan) to invest directly in mining projects to ensure a source of battery metals, including lithium, cobalt, nickel and others. There also has been an increase in battery recycling projects, seeking to reuse these metals.
Cement and steel mills are implementing carbon capture and storage technologies, and company shareholders are increasingly demanding increased attention to environmental, social and governance (ESG) issues.
Govreau delved down into how these changes affected specific regions.
U.S. & Canada
"Looking at the U.S. and Canada, we saw a significant increase in project starts last year--about $27 billion worth of project starts in 2021, compared to $16.6 billion in 2020," Govreau said. He expects the increased level of activity to carry on this year. The U.S.' $1.1 trillion infrastructure bill will benefit aggregates, cement, steel, copper and aluminum producers supplying bridge, rail and highway construction projects, not only in the U.S., but also Canada, which supplies a large amount of aluminum and cement to the U.S.
Latin America
"This region continues to be dominated by mining project development," said Govreau, "especially in Brazil, Chile, Mexico and Peru." But the activity has been impacted by a number of factors, including social unrest and resources nationalism. Chile and Peru are looking at increasing taxation on mining developments to support social improvement projects, while Mexico is examining state-run lithium extraction.
Europe
Europe continues to update its steelmaking and aluminum smelter fleets to newer and cleaner technologies. Govreau said, "The EU is leading the world in decarbonization plans, and several countries announced plans to get out of coal, and most steelmakers are planning massive retrofits of the iron and steelmaking processes in Europe. So that's driving a lot carbon capture and storage projects along with hydrogen electrolysis for direct reduced iron production." High energy prices are causing aluminum and zinc smelters to be shuttered, leading to supply issues.
Oceania
Australia continues to be the export market of choice for much of Asia, especially for coal and iron ore. A feud with China banned Australian coal imports more than a year ago, but the country has been able to find other markets. "While coal mining projects are declining in the country," said Govreau, "there remains considerable expenditure planned, mainly for expansions and mine life extensions in Queensland and New South Wales." Govreau said demand for iron ore has increased with the pandemic recovery, and most of Australia's steelmakers and iron ore miners have been expanding production and distribution infrastructure. Govreau said Australia is a proving ground for many new mining technologies aimed at optimizing productivity, such as autonomous hauling and drilling equipment, hydrogen fuel cells, and electrification.
Industrial Info's series of complimentary webinars provide timely and relevant information across a range of industrial sectors. Make sure to check out our Upcoming Webinars page to see what's next!
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
