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Mining and Metals

Overview

The mining and metals industries face an increasingly complex climate across the globe, from growing supply constraints to new environmental regulations and low productivity on capital projects. Despite these challenges, global investment in mining and metals is expected to grow by around 50 percent by 2030, as capital projects play an increasingly crucial role. We help clients to navigate this changing landscape, improve on-time and on-budget delivery of capital projects, and better position their projects and portfolios as strategic enablers of growth. Our global team of senior leaders and experts has real-world experience working on capital projects across all sectors of the mining and metals industry, from inception to commissioning. We provide a uniquely independent perspective that is not affected by conflicting incentives, allowing us to quickly and accurately identify the factors that can lead to delays and cost overruns.

Using our full suite of diagnostic and proprietary tools, we work closely with organizations to develop capital strategies that integrate best practices in portfolio optimization, project-delivery improvement, and organizational health. Importantly, we also support sustainable improvement by helping our clients to build their internal capabilities, engaging with all levels and functions within their organizations and emphasizing continuous learning.

When we work alongside our clients to focus on project value, our clients typically benefit from net-present-value improvements of 20 to 60 percent.

Examples of our impact

  • We optimized the capital portfolio of more than 300 planned projects across five mines and three large chemical plants for a global fertilizer client. Through such methods as introducing a new project-classification system and developing new scenario-modeling approaches, our client achieved a 10 percent reduction in capital and an increase in return on invested capital (ROIC) of up to 4 percent. Our efforts also enhanced the client team’s capabilities and offered insights into the portfolio that helped identify and improve future projects.
  • We worked with a global mining company that was looking to enter a new commodity market through a $7 billion greenfield project. However, it faced several challenges, including scope changes, budget constraints, and unfamiliarity with the location. The McKinsey team performed a rapid project assessment, developed a plan to embed new practices and ideas into the project design, and helped the client align its team around the new ideas. As a result, the client achieved a 60 percent increase in net present value, saved more than $1 billion, and improved the operability, maintainability, and constructability of the new processing plant.
  • When one of the leading global steel producers wanted to increase its market presence by building a $2 billion steel-processing plant, the company engaged McKinsey at the outset to help design and tender the project. We helped identify key cost drivers, establish benchmarks for anticipated costs of equipment and infrastructure, and guide the procurement process. The well-established baseline and detailed specifications developed by McKinsey helped the client to achieve cost savings through the contracting process, minimize reengineering efforts, and ensure a high degree of competition and cost transparency from suppliers.

Featured Experts

Sergey Asvadurov

Partner, Sydney

Mark Kuvshinikov

Vice President, Major Projects, Houston

Piotr Pikul

Partner, Toronto

Sergey Sokolov

Partner, Moscow

Featured Insights

Article

Getting big mining projects right: Lessons from (and for) the industry

– Overruns and delays are common in big mining projects. Intelligent interventions can improve the odds of success—particularly on distressed projects.
Article

Productivity at the mine face: Pointing the way forward

– Many mine operators could learn from industry leaders that are pursuing productivity-enhancing approaches.

Featured capability

MineLens

Provides mine operators strategic business intelligence needed to identify, quantify, and prioritize value creation opportunities