McKinsey report highlights technological breakthroughs are creating new tailwinds for innovation in mining and a much-needed boost in productivity

The report, 'Unearthing a new era of innovation in mining', outlines how powerful tailwinds for transformation are emerging within the mining industry from the alignment of new technologies – such as automation, AI, advanced chemistry, and universal site connectivity – and how mining companies can chart a path forward as innovation continues moving from the lab to the real world.

The report reveals that while innovation in mining has shown significant productivity benefits historically, momentum has slowed over the past two decades. In fact, OECD data shows that while productivity in manufacturing industries more than doubled from 1997 to 2023 – with other sectors like agriculture, forestry, and fishing increasing by more than 1.5 times – mining saw its productivity decrease by half, a trend further confirmed by McKinsey analysis.

This stagnation has been compounded by the unique productivity growth obstacles that mining faces – including declining grades, deeper pits, and longer hauls, all of which are compounded by operating in remote locations — and have pushed many mines below historic performance curves. At the same time, demand for critical minerals is surging, meaning mining productivity has become paramount; innovation will be essential to closing that gap.

Per the report, the emergence and convergence of several technologies is enabling the mining industry to benefit from emerging innovation tailwinds. This includes innovations ranging from the increasing promise of AI, automation, robotics, advanced chemistry, always-on connectivity reaching remote sites, electrification, and more. This has resulted in several high-impact mining subsectors showing high potential for innovation specifically within typically bottlenecked steps in the mining value chain, including loading and hauling, comminution, and processing.

To unlock these benefits, the report also details the pathway that mining organisations need to pursue to catalyse innovation lead by the need to structure their processes around iterative, continuous feedback loops with three interconnected and reinforcing stages: aspiration, innovation, and execution. Most important of all is leading with business impact rather than technology. Leaders have to identify the right critical business problem to solve, dedicate the right leadership, and set an ambitious ‘North Star’ grounded in the physics of the process.

Sean Buckley, senior partner at McKinsey, comments: “Given the challenges facing today’s miners, it’s clear that the next era of performance will be led by the innovators who obsess about solving the real business challenges they face. The mining innovation leaders will act with courage and clarity, making moves today to not only deploy technology, but do so with a laser focus on the right problems, with ambitious aspirations, pursue disciplined innovation, and execute with speed and conviction. Simply put, innovation will be a real differentiator. A small number of miners will make it based on their geological endowment. For everyone else, winning in innovation will be critical to moving down the cost curve and creating competitive advantage.”

Richard Sellschop, senior partner, McKinsey, added: “Mining has a rich legacy of innovation, yet today’s challenges call for more. So the question for mining leaders is no longer whether to innovate—but practically how to innovate. The next decade will likely reward those that make clear, bold, and intentional strategic decisions about what roles they play in the innovation landscape and what problems they explicitly focus on solving.”

Read the article online at: https://www.globalminingreview.com/mining/10122025/mckinsey-report-highlights-technological-breakthroughs-are-creating-new-tailwinds-for-innovation-in-mining-and-a-much-needed-boost-in-productivity/