Miners can start taking small steps now toward an estimated US$4.5 trillion of ‘circular economy’ opportunities some expect to emerge over the next 15 years, according to Accenture’s Sonia Thimmiah.
Thimmiah, the advisory group’s global mining lead, sustainability services, says miners are laggards, “in terms of action”, compared to other industries. But she believes there is “increasing interest in exploring the implications” of a circular global economy that decouples growth from natural resources consumption, shifting the balance of supply and demand for key commodities.
“I recently presented at a roundtable organised by the ICMM on the circular economy, and have carried out briefings for a major global mining company and steel company who want to know more about strategically how to position,” Thimmiah said.
“For the past few years, I’ve been devoted to exploring how sustainability affects mining companies both strategically and operationally. More recently, I’ve focused on how trends like circular economy and digital disruption will drive business opportunity for the sector.
“Accenture research, culminating in a new book by Peter Lacy and Jakob Rutqvist [Waste to Wealth], demonstrates that a circular economy could deliver $4.5 trillion in revenue to a range of companies by 2030. We have identified five business models that companies should consider across their value chain: circular supply chain; recovery and recycling; product life extension; sharing platforms; and product as a service. These will influence how miners source materials and energy, optimise their operational footprint, and make them consider where to play in the value chain and how to partner with customers.
“For miners in particular, we believe that circular economy winners will be equally focused on managing resources in the market and digging to extract additional resources where needed. The trick is to understand how the supply/demand trends play out for each commodity, to identify the relevant risks and opportunities, and to position for future growth before the circular economy becomes a reality.
“We are seeing macro trends that affect demand, such as the urbanisation of emerging markets and the rise of the sharing economy. And there are new industry entrants focused on building the market for secondary sources through recycling and recovery of materials.”
Thimmiah said increasing material substitution and even regulatory developments such as the EU’s Circular Economy Package posed “many threats and opportunities for miners”.
The digital disruption connection?
“Mining companies need to embrace digital technologies to make the transition,” Thimmiah said.
“As Accenture CEO Pierre Nanterme explained in an interview at the World Economic Forum Annual Meeting 2016, practical innovations using digital technologies—such as Internet of Things sensors, big data analytics and machine learning—are creating new possibilities for companies in the resources, products, industrial and chemicals industries.
“For instance, miners could use sensor-based technologies to monitor the exact usage on heavy machinery in order to increase asset lifecycle and utilisation, or to better understand product journeys across the value chain.
“Other technologies like pulverised coal injection and blast furnace control systems can reduce direct energy use. Trace and return systems enable sharing of commodities and products, which can be developed into as-a-service business models.”
Thimmiah said instead of selling platinum, a miner could create “platinum-as-a service” for the car industry and retain ownership across the cycle.
Or metals companies could design reusable steel girders that functioned like LEGO bricks. They would just be plugged into new buildings.