High

Mining & Metals

Metal production costs will remain high in Europe compared to the global market. Increased environmental regulatory pressure is likely to raise costs.

Sector trends & challenges

  • Regulatory pressure

    The sector is likely to face increased scrutiny from governmental bodies, customers, environmental groups and end users. Further improving environmental and ethical standards will be a continued focus for responsible operators.

  • Global competition

    The metals commodity markets are highly competitive, and less efficient sites with more expensive cost bases may suffer. Respite may come from a desire from some customers to shorten some supply chains to improve resilience.

  • Accessing new materials

    There will be exponential demand in the next few years for raw materials used in battery production, such as cobalt. Obtaining this safely will be challenging.

Sector rating profile

We have seen the stress level of the sector rise in recent years as global supply and demand becomes more volatile. The price of many commodities fell during COVID-19 but recovered strongly as supply was controlled.

Mining & Metals

The metals and mining sector, like every other, has been impacted by the COVID-19 pandemic and the resulting changes in the global economy. Demand for certain raw materials, such as steel, saw a marked reduction as output in sectors such as construction and automotive fell.

Recovery in demand for raw materials will be directly related to how other sectors of the economy recover through 2021. There is a growing desire to improve supply chain resilience, which may support European plants over those located further afield, especially if shipping costs remain high.

The pivot towards renewable technologies and the wider environmental agenda is likely to have an immediate and lasting effect on the sector. The impact that both raw material extraction and metal production processes have on the environment is likely to come under ever-greater scrutiny, with less efficient operations and plants likely to become unviable.

The growing demand for advanced batteries and technology products is going to require new sources of hard-to-acquire raw materials such as cobalt. Extracting these vital new materials in an environmentally and ethically-responsible way will be critical.

Find Your Expert

James Fagan is Interpath Lead for the ENR sector, which includes Mining & Metals as one of four core segments. For a full list of our senior people with experience in the Mining & Metals sector use the button below.

Our senior team