Global Mining Projects in Progress 2022 – A sector in recovery (PDF Report)

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Countless industries globally depend on the supply of mined mineral resources, making the mining sector crucial to the world’s economy.

The reliance of high-tech industries on critical metals, such as platinum-group metals, lithium, cobalt and rare earths, which are used in a range of industrial applications, such as electronics, clean energy, aerospace, automotive and defence, is a relatively recent phenomenon.

Gold, mined for thousands of years, is still considered a store of value, while iron-ore, coal, potash, and copper remain some of the most exploited commodities in terms of volume.

However, the minerals sector is no exception to the effects of Covid-19, albeit in varying degrees. Open access publisher MDPI – in an article about the impact of Covid-19 on the mining sector, published in April 2021 – contends that the pandemic has had the biggest effect on projects implementing feasibility studies and on projects for the development of new mines. This also holds true for the extraction of residual resources in mines before closure.

Projects at the exploration and discovery stage have been moderately affected, with the authors of the article concluding that the effects of Covid-19, in this case, are short term, mainly because of the continued strong demand for minerals in China.

Conversely, the article contends that halting the exploration and development of new mines will have a long-term impact, including an increased possibility of disruption of the future security of raw materials supplies.

Nevertheless, Fitch Solutions believes that the outlook for miners and metals players is positive for 2022. The credit ratings agency forecasts that global minerals and metals production will likely increase, and that capital expenditure will remain on its recovery trend.

Further, it anticipates that while most metals prices will average slightly lower in 2022, they will remain very elevated by historical standards; some will edge even higher.

Similarly, new opportunities to benefit from the transition to a green economy are emerging and participants in the sector will progressively position themselves towards this area of the market.

Fitch cautions, however, that downside risks persist in the sector, including the prospect of a Covid-19 resurgence, the potential for weaker-than-expected economic growth and the possibility that the green transition loses pace amid record-high input prices. Government intervention is also flaring up across emerging and developed markets in the race to control critical and strategic minerals for the green and digital economy, and amid high metal prices.

Published on 8 March 2022.

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