Challenges in mining and metals industry call for new leadership

A major shakeup of leadership may be needed in order to cultivate resilience in the mining and metals industry. A new report from Deloitte shows that companies struggle to balance growth with supply chain troubles while helping governments with looming security and infrastructure needs.

This year’s edition of Deloitte’s mining and metals report shows how companies in the sector may need new leadership approaches if they hope to take advantage of new opportunities and stay resilient.

The mining and metals industry is navigating a period of intense global uncertainty, driven by geopolitical shifts, the need to rapidly rework supply chains, and the urgent imperative to meet net-zero goals through decarbonization. These complex challenges, coupled with the need to optimize operations across talent, technology, and sustainability, are creating a demand for a fundamentally new style of leadership.

“Operating in today’s more complex environment requires the ability to lead through transformative change,” says Ian Sanders, Deloitte Global Mining and Metals sector leader.

“While context is important and each company may face very different challenges, there are some key leadership traits that will likely be significant in the years ahead.”

The successful mining and metals companies of tomorrow will require leaders with the cultural competency to manage a diverse, purpose-driven labor force and collaboratively engage with local communities to generate measurable environmental and social value.

These individuals must be able to respect diverse perspectives, comfortably embrace transformative change, and balance traditional metrics of productivity and profitability with the overall well-being and safety of their people. Teams, in turn, must be empowered to experiment with innovative tools like automation and AI to fundamentally transform traditional systems.

The technology-driven transformation

A critical aspect of this required transformation is a comprehensive embrace of new technology, moving beyond incremental changes to full-scale digital reinvention. In order to address potential global metal shortages, leaders must accelerate mineral exploration.

Some companies are already boosting operational efficiency through a ‘smart operations’ approach, which blends technology, data, and human experience. It often makes use of tools like AI, digital twins, and predictive analytics to optimize processes across the business and even inform decarbonization strategies.

This kind of operational overhaul often includes a major upgrade to IT systems, with many companies strategically timing the replacement of legacy Enterprise Resource Planning (ERP) platforms with next-generation software. That can help maximize returns and reposition the business for more future growth.

Beyond that, the impact of AI on the workforce calls for targeted reskilling and upskilling programs, which will be essential not only for lowering costs and boosting safety but also for securing a significant competitive advantage in the future.

Sustainability as a core strategy

Most companies in the sector now understand that sustainability is more than just a regulatory compliance issue – it is now largely seen as a non-negotiable strategic imperative for maintaining the social license to operate. Achieving net-zero is no easy task: It means transitioning from planning to complex execution, securing funding, and putting agile business models in place.

The sector is also shifting toward more value-led ESG strategies, focusing on tangible benefits. That includes things like cost savings from sustainable energy, positive community investments, and enhancing the talent pipeline through robust DEI (Diversity, Equity, and Inclusion) efforts – rather than simply reporting metrics.

A major, emerging opportunity is the potential for companies in the sector to gain a competitive advantage by leading the transition to a nature-positive economy through reversing biodiversity loss. This requires strong leadership commitment to explore natural capital accounting and restructuring business models to integrate nature-based solutions effectively.

Although investments for critical minerals mining and processing are increasing, the International Energy Agency (IEA) states that to meet a net-zero emissions scenario requires an additional $360 billion to $450 billion by 2030 to bridge potential supply-demand gaps.

Some mining companies are even looking for establish fixed-price contracts with downstream consumers like auto makers, which could help anchor demand and mitigate raw material price volatility.

Market agility and resilience

One thing is clear: The landscape is changing. In the face of dynamic market conditions and limited diversification of critical mineral supply chains, companies need to prioritize resilience and strategic agility.

Navigating the complex landscape of increasing demand, value chain transparency, and supply risks requires leaders to constantly study future scenarios. They also need to leverage international incentives and alliances and establish leadership positions in new trade arrangements.

In order to survive and thrive in this volatility, an essential discipline is active portfolio management, which necessitates senior-level commitment to regularly assessing all assets for their strategic contribution, cost-fit, and ability to better position the company against market developments and uncontrollable factors. The mining and metals industries need visionary and inclusive leadership that can manage complexity while maintaining a focus on long-term value creation.