The mining industry is a reflection of economic cycles, expanding during periods of growth and contracting during downturns. According to data from S&P Global, the capital expenditure (capex) of the world’s top 30 mining companies is expected to increase by 6.2% in 2023, reaching an impressive $109.2 billion. While this growth is significant, it is still below the peak of $145.7 billion reached in 2013, indicating that there is still room for expansion in the industry.
It is worth noting that miners will face challenges in the coming years, including rising inflation, increasing interest rates, and a slowdown in economic activity. These factors may lead to a slight decrease in capex, with a projected decline of 1.8% in 2024 and an additional 0.7% in 2025.
Several key players dominate the mining industry, each with their own net zero targets and a growing commitment to sustainable mining practices. BHP Group Ltd., for example, plans to allocate $7.6 billion in 2023, with a particular focus on its Jansen mine in Canada. The company aims to achieve net zero emissions by 2050, with a significant portion of its budget dedicated to operational decarbonization.
Rio Tinto Group, with a capex guidance of $7.4 billion in 2023, is investing in projects such as the Simandou iron ore deposit in Guinea and the Salar del Rincon lithium project in Argentina. The company has set a goal of net zero emissions by 2050, with interim targets of a 15% reduction in emissions by 2025 and 50% by 2030.
Vale SA plans to allocate around $6 billion in 2023, focusing on projects such as the Onca Puma mine’s furnace and the ramp-up of the Serra Sul operation. The company aims to achieve net zero emissions by 2050, with a target of reducing scope 1 and 2 emissions by 33% by 2030 and scope 3 emissions by 15% by 2035.
Anglo American PLC has adjusted its 2023 capex vision to $6.0 billion, with a focus on projects like the Woodsmith polyhalite venture in the UK and the Quellaveco copper mine in Peru. The company aims to reduce net greenhouse gas emissions by 30% by 2030 and achieve carbon neutrality for scope 1 and 2 emissions by 2040, along with a 50% reduction in scope 3 emissions.
Glencore PLC plans to invest approximately $4.8 billion in 2023, with projects such as the Collahuasi copper joint venture in Chile and the Zhairem zinc project in Kazakhstan. The company aims to reduce emissions across all three scopes by 15% by 2026 and 50% by 2035, with a long-term goal of achieving net zero emissions by 2050.
Posco Holdings Inc., with a projected capex of approximately $4.8 billion in 2023, is focused on increasing its production of cathode, anode, and lithium materials by 2030. The company has committed to carbon neutrality by 2050, with gradual emission reductions of 10% by 2030, 50% by 2040, and reaching net zero by 2050.
ArcelorMittal SA plans to allocate between $4.5 billion and $5 billion to capex. The company aims to reduce CO2 emissions by 25% by 2030, focusing on scopes 1 and 2 emissions and excluding scope 3 emissions. ArcelorMittal also aims to be the world’s first full-scale zero carbon emissions steel plant by 2025 and achieve net zero emissions by 2050.
In 2023, the top ten mining conglomerates are projected to account for 50.8% of the overall capex of the top 30 miners. As the mining industry evolves, these companies will need to adapt to the increasing demand for critical metals, transition to clean energy sources, and prioritize operational decarbonization. The challenge for these industry giants is to strike a balance between profitability and sustainability, ensuring long-term growth while contributing to a greener planet.
As the mining industry continues to invest in capital projects, it faces a complex landscape. These global mining giants must navigate this terrain, striving for sustainable growth, adapting to changing market conditions, and demonstrating a commitment to a more environmentally friendly future. Only time will tell if they can successfully unearth a golden future.
