The metals and mining industry is facing unprecedented volatility. BCG helps clients throughout the industry’s value chain excel amid a fast-changing landscape.
Recent trends in the mining and metals industry have put new pressures on companies to rethink their approaches to mining strategy and transform their industrial metal operations.
Rising demand for electric vehicles has increased demand for battery metals and lowered demand for specialty long steel; trade protections have stiffened; and pressure to meet environmental sustainability targets has mounted, forcing executives to grapple with new complexities. At the same time, while new digital technologies have enabled metals and mining industry players to achieve impressive gains in operational efficiency and effectiveness, they have also presented fresh challenges.
BCG’s metals and mining consulting experts help clients grasp the complex forces reshaping the industry and craft the right strategies and operating models to meet new imperatives.
BCG’s global teams of experts specialize in both the mining industry and metals industry (including steel, aluminum, copper, and other base metals). We partner closely with clients to help them engineer the strategic and operational shifts needed to stay competitive. We also help clients manage large-scale change and build the in-house capabilities that are essential for sustaining success.
BCG’s ability to combine expertise in operations transformation with knowledge of digital and analytics technologies is unique in the metals and mining consulting industry. This skill has earned us accolades and long-term partnerships across all commodities and diverse geographies.
Our proprietary solutions and advanced analytics tools enable clients to achieve unprecedented efficiency and effectiveness in every aspect of their businesses, including operations, strategy, and logistics.
BCG solutions include the following.
A large integrated metals player digitally transforms to put customers first. BCG worked with an industrial metal client to develop a seamless value chain that used digital and advanced analytics to manage complexity and minimize uncertainty in its services processes. The transformation set the stage for a 10-point improvement in service levels, a rise in EBITDA of 2 to 4 points, and reductions in inventory levels of four to ten days.
A multinational mining company deploys digital to sharpen its competitive edge. BCG helped the client transform its technology organization to deliver digital capabilities, launch digital initiatives spanning the value chain, and devise future digital initiatives to be achieved at lower cost. This positioned the company to boost productivity, improve customer service, decrease costs, and enhance safety.
A diversified mine operator reinvents its marketing and sales strategy. With BCG’s help, the client revamped its entire approach to marketing and sales by developing local sales forces for products in nonliquid markets where the company had a smaller market share, while also building a commodity-trading business for products that had reached full liquidity in the market. The estimated bottom-line impact was more than $1 billion in annual pretax benefit.
A sprawling mining operation integrates remote mining operations. A bulk commodity producer with a complex supply chain consolidated its operations’ monitoring and controls into a central hub by drawing on key elements of BCG’s MOST approach. Results included real-time visibility into where, when, and how supply chain bottleneck shifts occurred—which, in turn, enabled managers to launch improvement efforts that delivered productivity gains and cost savings.
A global mining company makes sure its megaproject investments pay off. The client asked BCG to help optimize its capital spending with a view toward spurring aggressive growth. Through our LESS capital expense framework, we diagnosed shortcomings, prioritized fixes, and integrated knowledge from employees, contractors, and suppliers. Results included a 35% reduction in capital intensity, representing a significant boost in revenues compared with the capital spending involved, and a projected increase in capacity of 100% over ten years.
A major steelmaker transforms to supercharge its earnings. BCG helped the client revive margins damaged by overcapacity and correct a siloed corporate culture. We launched a comprehensive transformation program that included improvement projects for mill production, sales, service efficiency, purchasing, and administration. The work resulted in €2 billion in increases of identified potential earnings, €540 million in top-line improvements, and €1.5 billion in cost efficiencies.
Teck Resources Limited uses data science to optimize operations and transform the entire business. BCG worked with the mining company to harness key insights from its wealth of operational data using machine learning—a program called RACE21—to improve processing efficiency. The program has not only allowed Teck to reduce costs but also to minimize the company’s impact on the environment. Read the full story in Wired.
Due to shortages of critical materials and vulnerable supply chains, production of lithium-ion batteries could fall far short of demand. Coordinated action is needed to boost supply in a sustainable way and keep the transition to renewable energy on course.
Understanding the challenges can help other players in the circular economy.
By helping steelmakers curb their greenhouse gas emissions, iron ore miners can advance their own decarbonization efforts.
Mining, oil and gas, and chemical manufacturing companies haven’t yet started to exploit AI, but they can close the gap by applying lessons from other industries.
Yet we also see a window of opportunity for those that move quickly to implement fundamental process changes and begin the transition to carbon neutrality.
By gaining deeper insights into the status and efficacy of their climate initiatives, companies can accelerate efforts across the value chain.
