McKinsey & Company is a global management consulting firm committed to helping organizations accelerate sustainable and inclusive growth . In the metals and mining sector, we help leaders hone strategies to deliver consistent value-creation in a volatile world, transform their operational performance and organizational effectiveness, and deliver step-change improvements across the value chain, from resource efficiency to capital productivity to marketing.
McKinsey’s latest report forecasts a strong decade of robust demand ahead for mining. Which materials are seeing the fastest momentum, and how are trends influencing that outlook?
Over the past 20 years, the metals and mining sector has grown about 7% annually—driven one-third by demand and two-thirds by price. The outlook remains strong, supported by global population and middle-class growth.
The energy transition, electrification, and AI are adding further lift—EVs, data centers, and hydrogen projects are highly material-intensive. Taking offshore wind as an example, this is six times more materials-intensive than a fossil fuel-based power installation on a megawatt-hour basis. We expect that copper and battery metals—lithium, nickel, manganese, cobalt, and graphite—will see strong demand, while steel, iron ore, metallurgical coal, and thermal coal will grow more slowly or even decline as Chinese steel demand contracts, partly offset by India and Southeast Asia, and the availability of ferrous scrap grows.
While decarbonization progress has slowed in some regions, the direction remains unchanged. Europe’s carbon border adjustment mechanism (CBAM) starts in 2026 ,and China keeps expanding emissions coverage—but the “green premia” once rewarding low-carbon products have faded. Investment has slowed; nearly two-thirds of announced European steel decarbonization projects have been put on hold or canceled. The next few years will likely be flat—some players will advance, but broader acceleration awaits a clearer business case for large-scale decarbonization.
Mining and refining are both high-emission stages. Which technologies are proving most transformative in improving sustainability and bringing down CO₂ emissions?
If we first look at mining operations, the first mining lever is electrification—haul trucks and processing powered by renewables. Battery-electric equipment and renewable energy can significantly reduce emissions. Wherever electrification and renewable power are not possible, the second lever is switching fossil fuel-fired equipment and operations to sustainable fuels like biofuels or biomass, which are CO₂ neutralA third area is fugitive emissions, particularly methane from coal mines; capturing those gases is essential since methane’s climate impact far exceeds CO₂.
Most CO₂ emissions however, occur during smelting and refining. Levers in those processing steps focus on renewable power and process change—shifting steelmaking from blast furnaces to natural gas and eventually hydrogen-based direct reduction, combined with a smelting step based on renewable electricity, could cut emissions dramatically. Carbon capture may also help where emissions are hard to eliminate. If we look at the current CO2 pathway for the industry, overall emissions ar,e however, only expected to fall only about 6% by 2035—well short of Paris targets—due to weak economics and uncertain returns on large decarbonization projects.
Investors are becoming more selective when it comes to decarbonization investments across the metals and mining value chain. Where is capital flowing, and which areas are struggling to attract it?
In Europe’s steel sector, momentum remains strong. For example, governments in Germany, the UK, and the Netherlands have pledged billions in subsidies to help plants decarbonize, and five to ten new greenfield steel plants are underway. Aluminum is also attracting significant investments, in the form of investments in renewable power to feed the smelters, as the carbon gap between renewable-powered and coal-fired producers ranges from four to 30 tons of CO₂ per ton of aluminum. Producers are focusing on securing renewable energy for smelting.
In mining, companies are piloting electric heavy equipment and scaling electrification. Overall, capital still flows where government backing, clear returns, and visible green premia align.
Mining companies are prioritizing safety and efficiency as digital transformation accelerates. Which technologies are defining the mine of the future, and what challenges do firms face in scaling them?
With commodity prices retracting, miners have been focusing more on efficiency, and the gains are striking. Traditional lean tools still matter, but breakthroughs come from digital technologies. AI, automation, and analytics are optimizing concentrators, fine-tuning variables like reagents, pH, and particle size for higher recoveries and lower energy use. Driverless trucks, remote sensors, and centralized control rooms are helping reduce labor costs and address the scarcity gap for skilled workers. “Digital agent factories” are transforming workflows—one company reduced its order-to-cash team from 150 to 15 supervisors overseeing autonomous systems—radically improving productivity while reducing dust, emissions, and water use.
The main hurdle is scaling. Many firms stall in “pilot purgatory,” where successful small projects never expand. The fix is designing for scale: building strong data foundations, training workforces, and managing change so operators trust the systems. Leaders need to align tech with real business problems and rigorously measure returns. Without that discipline, technology becomes an added cost instead of a competitive edge.
Technology is transforming mining and other heavy industries. How is it changing consulting itself?
We’re applying the same transformation récipe internally. McKinsey has invested heavily in new capabilities, including acquiring QuantumBlack for AI expertise. We continuously upskill our people—I meet with digital experts every two weeks—and we built a GenAI-enabled platform that integrates proprietary and external data to accelerate work and presentation prep, sharply boosting productivity.
Analyses that once took six weeks can now be done much faster. Still, technology doesn’t replace human judgment—algorithms can be inaccurate, and real-world expertise remains vital. The best results come from pairing these tools with deep industry understanding.
Many North American companies report new momentum under current US policies. Is four years too short to shift such a long-term industry?
The US has always been a center for investment. Greenfield FDI inflows are among the world’s highest. Productivity keeps rising— especially in comparison to other economies. For example, the US-Germany productivity gap now stands at about $40,000 per worker annually.
Across innovation, R&D, scale, and market cap, the US leads the way on several fronts. Combined with policies favoring critical-material supply chains, these dynamics create strong tailwinds. The US is now a frontrunner in securing critical materials, with other regions following. At the same time, global volatility is rising, and clients are seeking resilience—driving investment momentum in the US.
