Learn how the Mining industry works
The mining industry is a general term to cover the extraction of raw materials from the ground. It includes mining for solid products and wells digging for oil and gas for the energy industry.
Some companies will refer to this sector as “Natural Resources”.
The mining industry is going through huge transformation, as whilst there is a big focus on reducing our impact on the planet and a move away from the use of fossil fuels, the new generation of electric vehicles require new metals including cobalt and lithium in even greater quantities.
This sector is dominated by a handful of very large global organisations who have developed end to end capabilities from developing and operating a mine through to the refinement, transportation, and marketing of the refined product.
Give me some examples of companies in this sector
Headquartered in Switzerland and with operations across the globe Glencore is the largest commodities trader with revenues of $203bn in 2021.
Glencore mines a range of commodities from coal to copper, and then refines, transports and markets products around the world.
BHP is an Australian headquartered mining company with 80,000 employees.
It has mining operations across Australia, South America, Canada and the United States.
They mine copper, iron ore, nickel and other solid products.
Rio Tinto is an Anglo-Australian mining company with 45,000 employees and revenues of $63bn in 2021.
They mine a range of solid products including copper, iron, diamonds and salt.
They have operations across the world including Australia, South and North America, and Africa
Halliburton is an engineering company that services the mining and energy industries.
They help oil companies to plan, drill and run oil wells.
They were infamously linked to the BP/Transocean Deepwater Horizon disaster in 2010.
What are the different types of companies in this sector?
Oil and Gas Extraction
These companies focus on crude oil (for refining and making fuels), and natural gas.
Example companies:
Marathon Petroleum, BP, Shell, Exxon Mobil
Coal Mining
These companies extract coal from open cast surface mines, or via underground mining.
Example Companies
Glencore, BHP, Rio Tinto
Non-Metalic Mineral Mining and Quarrying
These companies mine trdaitional stone and rock to be used in construction or roads and buildings.
Example companies:
Vulcan Materials Company, Caremeuse Lime, US Borax
Metal Ore Mining
These companies focus on extracting metals including iron, gold, silver, and increasingly important - nickel, cobalt and lithium
Example companies:
Glencore, BHP, Rio Tinto, Anglo American
Support Activities
These companies support those in the mining industry - helping to design, operate and close down mining operations.
Example companies:
Halliburton, Transocean, Schlumberger
What are the big trends in this sector that I need to be aware of?
Sustainability
All industries have a focus on sustainability and moving to a low-carbon future, and none more-so than the mining industry, because they sit at the top of the supply chain for some many of the others.
The concept of digging huge holes in the ground, and extracting raw materials is in itself, very unsustainable - but the mining industry is investing hard to become net zero with many companies including Glencore committing to net zero by 2050.
They aim to achieve this by being far more efficient in their operations, extracting more of the target material with less waste, and by ensuring they leave the ground after operations have ceased as they found it.
Tech-enabled mining
Mining has traditionally been a very labour intensive and manual effort. Moving forward technology, including automated machinery, data analysis, and management of sustainability is going to become increasingly important.
Electrification
As more of our lives move from consuming fossil fuels to using renewable energy, much in the form of electricity held in batteries, mining companies have a huge demand for rarer metals - lithium, nickel, cobalt and zinc that are required to manufacture them.
This trend is directing mining companies to new sites of operation, and a need to embrace technology to find ever decreasing amounts of the target material from those sites.
What should I be thinking about?
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Companies drilling for oil and gas are in a very different situation to those mining for precious metals - so get a clear understanding of your customer’s market.
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The shift to a low-carbon future affects this industry more than any other - in both positive and negative ways.
Consider how technology is going to evolve this sector as they endeavour to become more sustainable.
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Mining companies have not traditionally seen themselves as technology companies - but that is changing.
Review the annual reports of your target companies and you’ll see that sustainability and innovation are the CEO’s priorities.
Link your solution directly to those initiatives.
Where do I find out more?
Analysts
Look for recent reports from Gartner, Forrester and IDC on the Mining sector.
They will help you learn more about the trends and priorities that Mining industry CxOs are focused on.
Consulting Firms
Accenture, Deloitte, Bain & Company, McKinsey, BCG all have Mining or Natural Resources pages on their websites.
They provide predictions of the future which will help you determine how your solution can support your customers getting there.
Other Tech Companies
Most large tech companies like Salesforce, Microsoft and SAP have verticalised. They produce events, ebooks, datasheets on what their teams see is happening in the industry.
Of course, these are their views based on what they want customers to buy - but still a good source of information.
Companies in the sector
Even if you are selling into smaller private companies, you can learn a lot from the annual reports of their bigger sisters and brothers.
Look for the top five companies in your specific sub-sector and download their latest annual report from their investors page.
It will walk you through their vision, their strategic priorities and the challenges they are facing.