Mining Industry - SWOT Analysis and Trends

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Insights and Trends - Mining Industry: United States

Experts in the mining industry predict trends related to the application of technology to boost production, streamline the value chain, and increase overall profitability. Industrial Internet of Things (IIoT) and artificial intelligence are some trends expected to shape the future of the US mining industry, as discussed in the following section.

Industrial Internet of Things (IIoT)

  • According to experts, digital trends such as automation and the Industrial Internet of Things (IIoT) are set to transform the mining industry towards safer, efficient, sustainable, and profitable production.
  • It is a trend because significant efforts in the industry are currently geared towards exploring IIoT technology that allows mining organizations to use interconnected sensors to collect data in large quantities remotely and in real-time.
  • One of the driving factors behind this trend is the desire of players in the mining industry to lower production costs, improve the quality of products, and also increase profitability. Statistics show that in the past 15 years, production costs have sharply risen.
  • One of the experts who have joined the discussion about IIoT as an emerging trend is Joe Carr, the director of mining innovation at Inmarsat. In his opinion, “advanced IIoT solutions can even form the backbone of a fleet of completely autonomous haul trucks, drills, and excavators which can deliver additional savings, reducing fuel and staffing costs and optimizing operating efficiency. ”

Artificial Intelligence

  • According to industry experts, in the near future, mine employees will be focused on business aspects such as managing strategic relationships, rather than on operational aspects.
  • Experts predict that machines used in mines will be able to process data independently and make decisions using information from connected sensors.
  • According to market research, some key players operating in North America (including in the United States) are focusing on providing real-time analysis through artificial intelligence and other automation processes.
  • The idea behind ‘smart mines’ and the driving factor behind the application of artificial intelligence in mining is to allow for advanced capabilities to find, extract, and process mined materials quickly, cheaply, and at better rates per tonne.
  • “Artificial intelligence will make decisions on production and routes to market, informed by learning from connected global trends and the real-time capabilities of the companies’ mining properties,” says the director of sales for EMEA, Rajant Corporation, Chris Mason.
  • As an expert in the industry, Mason believes that the value chain will also be intelligent and connected, from mines all through to the ultimate user of the materials.

Research Strategy

To identify predicted/emerging trends in the US mining industry, we utilized industry sources and reputable market researches. While trends specific to the United States were not readily available, we reviewed sources that were general to the global mining industry but were keen to pick on those that mention the US as one of those countries affected by such global trends. The trends are as herein presented.
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SWOT - United States Mining Industry

The US mining industry has a strong performance and steady growth, while weaknesses in the industry include economic dislocation, over-reliance on mineral imports, and delays in permit issuance. Digitization and the growing demand for minerals and metals are valuable opportunities for players in the mining industry. Threats in the industry include regulatory challenges, cybersecurity risks, and declining productivity in the coal mining segment.

1. Strengths

Strong Market Performance

  • In terms of revenue, the US mining industry market size, revenue in 2020 is $642.5 billion, which makes it one of the best performing mining industries of the world.
  • In 2018 alone, the US produced about $82.2 billion of raw mineral materials in 2018, representing a 3% increase from the total in 2017.

Steady Growth

  • According to market research published in Ibis World, the US mining market is expected to grow by 9.3% in 2020.
  • Between 2015 and 2020, the US mining industry has increased by 7.3% per year, reflecting an industry that is performing well and on an upward trajectory in terms of growth.
  • Overall, the mining industry has grown faster than the overall economy in the US. The market size of the mining industry in the US increased faster than the economy overall.
  • Some factors expected spur growth in the US mining industry include reducing dependence on imports (following executive orders) and improving US infrastructure.

Political Goodwill to Support the Mining Industry

  • The Trump administration has shown a commitment to supporting the US mining industry towards growth. President Trump issued executive orders to discourage the import of mineral materials.
  • In the press release statement, Trump said that “this executive order will prioritize reducing the Nation’s vulnerability to disruptions in our supply of critical minerals safely and [responsibly] for the benefit of the American people.”

2. Weaknesses

Economic dislocation

Over-reliance on Mineral Imports

  • Reports indicate that America’s dependence on mineral imports has almost doubled to alarming levels in the last two decades.
  • The situation is disadvantageous to the US mining industry as it remains vulnerable and at the mercy of geopolitical rivals and unstable nations.

Long Mine Permitting Process.

  • In the US, it takes close to 10 years or more for mines to acquire the needed permits to begin operations. In other countries with comparable environmental standards such as Canada and Australia. The process takes only up to three years.

3. Opportunities

Growing Demand for Minerals and Metals

  • Currently, trends indicate a significant shift towards low-carbon alternatives to energy. The scenario is giving rise to increased demand for minerals to build solutions such as electric vehicles, wind turbines, solar arrays, and other renewable energy infrastructure.
  • A study conducted by EarthWorks revealed that the demand for minerals such as lithium and rare earth is skyrocketing.
  • It is an opportunity for the US mining industry to take advantage of the increasing demand to grow further.

Digitization

  • There are opportunities for the application of technology and automation in the mining industry. Advancements in drone technology, Industrial Internet of Things (IIoT) artificial intelligence (AI), data analytics and blockchain technology all present new opportunities for advancing capabilities more efficient mining processes, better management of the supply chain, and data and analytics, etc.

The volatility of World Crude Oil prices

  • According to market research, “the world price of crude oil is expected to decline in 2019 and beyond. However, the inherent volatility of global crude markets represents a potential opportunity for operators in the sector.”

4. Threats

Declining Growth in the Coal Mining Segment.

  • The declining productivity in the US coal mining segment is threatening the overall stability and sustainability in the mining industry.
  • Reports indicate that productivity slid by 11% in 2019 alone, which is the lowest it has ever hit since 2011. The situation is expected to lead to ob losses in the industry as the amount of coal produced per miner continues to shrink.

Cyber-Security Risks

  • Surveys conducted in the mining industry both in the US and globally, show that many companies in the mining industry of fallen victims to cyber attacks such as malicious hacking, electronic fraud, ransomware attacks, corporate espionage, and data leaks.
  • According to experts, the solution to this threat is “intelligent mining,” which entails integrating automation, robotics, and the Internet of Things (IoT) into mining operations.

Regulatory Challenges

  • In the US, companies my discouraged by the rigorous bureaucratic processes that precede the start of new mining projects. It is a requirement that such proposals get approval from all levels of government, including local, county, state, and federal levels.
  • The lengthy process causes significant delays in kick-starting new mining projects.
  • More than three dozens federal environmental protection laws have to be considered in the approval process, including the Clean Air Act, National Environmental Policy Act (NEPA), and Federal Land Policy and Management Act, among others.

Sources
Sources