Global law firm White & Case recently released its largest ever Mining and Metals survey, with 156 industry leaders sharing their thoughts on concerns and priorities for 2023.
The survey found that rising inflation and geopolitics have overtaken ESG as the biggest concerns for 2023, while higher energy costs, shifting supply chains, and climate-related regulation and activism still worry firms.
Despite shared concerns, there is surprisingly little agreement on what the economic outlook is, how market players will respond, or what will be the pervasive theme for the year ahead.
Even with the high degree of uncertainty facing the industry, the fourth quarter of 2022 saw the largest number of mergers and acquisition activity in a decade, nearly matching the total volume of deals for the first three quarters last year. Mining companies continue to make acquisitions and investments knowing that whatever turbulence they face today, the material demands of the energy transition and risk of supply deficits are stark.
Striking in the survey responses is the link of areas perceived in high demand to the EV supply chain. Copper and lithium ranked materially higher as likely big winners in 2023, with battery minerals and base metals as the most likely areas for consolidation.
The lack of clarity regarding the global macroeconomic outlook is belied by the commodities considered most likely to underperform in 2023 by respondents: iron ore, coal and gold – 28 per cent of all respondents felt iron ore was the commodity most likely to underperform in 2023.
Key insights include:
- Battery-linked materials like copper and lithium saw more positive expectations.
- Project finance expectations are rapidly shifting, with end-users expected to play a much greater role in financing the development of energy transition minerals. Just 18% of respondents felt capital markets would lead the way in financing these projects, compared to 31% of executives surveyed last year.
For further insights and analysis, click here to read the full report.