Back to How We Help Clients

Mining

We help mining leaders hone strategy, transform operational performance and organizational effectiveness, and deliver step-change improvements right across the value chain—from resource efficiency to capital productivity to marketing

Mining represents a major proportion of the world economy, a focus of massive investment, and a key growth driver for many countries. Yet after the past decade’s commodity boom, mining companies are operating in a complex environment characterized by high price volatility, increasing operational challenges, and shifting regulation. To create value today and secure competitive advantage for the future, they must achieve laser-sharp strategic focus, drive operational excellence across the business, and deliver high levels of capital and resource efficiency.

What we do

We serve approximately two-thirds of the world’s top 25 mining companies, across all regions and functions. We help their leaders hone strategies to deliver consistent value-creation in a volatile world, transform their operational performance and organizational effectiveness, and deliver step-change improvements right across the value chain, from resource efficiency to capital productivity to marketing.

Our Mining service line is made up of more than 500 top-caliber practitioners and experts across six continents, including numerous mine engineers, metallurgists, geologists, and business managers, with deep operational experience in mining. Our client service is backed by an extensive program of proprietary research and a suite of high-impact management tools. Four things distinguish our work:

State-of-the-art knowledge

We make major investments in knowledge. Our global Basic Materials Institute (BMI) houses 50 leading professionals with deep expertise across all major metals. We offer our clients unique insights on supply, demand, trade flows, and future prospects for all major mining commodities. We publish extensively on these topics and are core participants in the world’s major mining conferences. We also collaborate with global institutions, mining associations, and policymakers to help shape the industry’s future.

Global industry expertise

We bring deep insight into every significant mining commodity, including coal, iron ore, precious metals, bauxite, potash, copper, and other base metals. This is grounded both in deep practical experience, informed by our long-term relationships with leading mining players across commodities and regions, and in-depth proprietary knowledge.

Deep functional expertise

We bring cutting-edge expertise and a track record of breakthrough impact to all key functions, from strategy to organization to marketing. For example, our holistic approach to transforming mining operations integrates technical, managerial, and behavioral levers to optimize value, build capabilities, and sustain improvement over time. Our capital-productivity approach translates capital strategy into optimal capital allocation, portfolio mix, and project implementation. We offer a suite of proprietary tools such as MineLens, an in-depth operational benchmarking database that enables clients to capture throughput improvements and capital-expenditure savings of 20 percent or more.

Impact-driven approach

We are trusted counselors to CEOs and other senior executives, bringing a top-management perspective to mining companies’ most important opportunities and challenges. We offer objective perspectives rooted in knowledge and analysis, and work in close partnership with our clients to translate strategies and solutions into bottom-line impact at speed and scale. Our McKinsey Implementation service line works intensively with our clients to translate recommendations into lasting and substantial performance improvement. Our Recovery and Transformation Services helps companies rapidly plan, execute, and sustain turnarounds.

Examples of our work

  • We helped transform a state-owned national mining company into a mining house that is active across multiple companies and commodities—and outperforms the market. Our multi year support included redefining corporate strategy, identifying M&A targets and supporting post merger integration, and operational transformations at several key sites.
  • We supported the holistic cost and throughput transformation of large-scale iron-ore mine in Asia–Pacific. Impact included 10–15 percent improvements to truck payload, a 15 percent reduction in mining cost per tonne, and a 15–20 percent reduction in cost price through procurement initiatives.
  • We helped transform the maintenance approach of a US surface-coal miner—increasing planned jobs from 42 to 54 percent and maintenance compliance from 56 to 80 percent on a daily basis.
  • We helped improve the economics of a new 12 Mtpa iron-ore processing plant by rethinking equipment selection and technical design from a value-creation perspective. This reduced capital cost from $500 million to $350 million while increasing production capacity.
  • We partnered with a national mining association to develop a “Mining Vision 2030”, setting out the role the industry could play in the country's economy—with a detailed plan to help policymakers and mining leaders realize that potential.

FEATURED EXPERTS

Stephan Görner

Senior Partner, Sydney

Jukka Maksimainen

Senior Partner, Astana

Sigurd Mareels

Senior Partner, Brussels

Harry Robinson

Senior Partner, Southern California

FEATURED CAPABILITIES

MineSpans

In today’s volatile commodities market, reliable data is critical when making operational and investment decisions. With MineSpans we’ve built the most transparent, comprehensive and dynamic cost curves, supply and demand models in the world to help mining managers make decisions with unprecedented confidence. MineSpans enables clients to explore forecasts using their own assumptions to uncover valuable insights in the evolution of the copper and iron ore markets. Our cost curves are built bottom-up, based on 1.5 million data points from 12,000+ original and tagged source documents, cover 100% global output, and are continuously updated by our 35 analysts and experts globally.

MineLens

This in-depth operational benchmark database covers both open-pit and underground mines, across ten commodities and six regions. The tool enables mines and mining companies to compare specific aspects of their operational performance against their peers, highlighting gaps and improvement opportunities. (We offer similar operational benchmarks in steel and other areas of metals production.) Our clients have used MineLens to identify and capture throughput improvements of 12–25 percent and capital-expenditure (capex) savings of 10–20 percent. An Australian thermal coal mine, for example, used the tool to drive improvements resulting in a $30 million increase in profits.

Rapid Yield Boost

The tool combines McKinsey’s mining expertise with big data and advanced analytics. It harnesses all available historical plant data to challenge the existing “truth” on performance drivers with credible analyses—and translates them into actionable recommendations to boost the bottom line without additional capex. For example, we used the tool to help an African gold mine boost yield by 8 percent despite a drop in grade—and thus create options to extend the life of the mine.

Stay in Business

The tool optimizes capital projects to cut costs and enhance long-term value, drawing on McKinsey’s deep experience in capex transformations and our proprietary, customizable portfolio-optimizer tool and project-valuation models. We have used Stay in Business to reduce our clients’ capex by 30 percent—while building sustainable client capabilities through a proven train-the-trainer approach.

McKinsey Investment Readiness Assessment (MIRA)

This is a revolutionary approach to evaluating large projects at any stage of delivery, designed by industry veterans and leading capital project professionals who have worked on hundreds of large capital projects globally. MIRA delivers a detailed, fact-based, quantitative score of the project’s readiness for the next stage of funding, a concise and incisive action plan to ensure successful project delivery, and a robust assessment of the project’s underlying business case and the magnitude of associated risks.

Purchasing and Supply Management (PSM) Tools

This powerful suite of tools helps our clients optimize procurement. The McKinsey Spend Analysis Tool allows Web-based aggregation, cleansing, and classification of complex spend data across multiple systems and currencies. Our Category Savings database provides industry- and category-specific savings benchmarks based on our global procurement experience, while our Procurement Excellence database distills best practices from over 1,000 procurement organizations.

Related Insights

Podcast

Mining for growth

– Mining companies are heading to the ends of the earth to meet demand.
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

Is there hidden treasure in the mining industry?

– Low equity prices may offer important M&A opportunities for the mining industry.
Article

How digital innovation can improve mining productivity

– With profits down, miners are focused on improving their productivity. Digital innovation could provide a breakthrough.