What areas of EY’s Mining and Metals business were most in demand in 2022?

In 2022, we witnessed growth in every one of our offerings, particularly in assurance, consulting, integrated mobility, and strategy. First, our audit and financial advisory teams acquired several great clients. Second, the lifting of cross-border restrictions and the increase in expat hiring have kept our Integrated Mobility teams very busy. Third, in consulting we have seen a substantial demand for technology transformation anchored on updating, upgrading or implementing new ERP systems. In addition, we have helped a lot of clients in data analytics and data strategy, and that is tied most of the time to ESG, because the reporting requires good data.

Another area of high demand was Risk Services, where there is more interest in enterprise risk management to bring in the right specialists. Still in consulting, emerging areas of focus have been higher demand for cybersecurity and ESG strategy services. Finally, our EY Parthenon teams have been super busy on corporate strategy engagements and operations turnaround discussions. In fact, the most recent trend is on inflation control and recession proofing operations. As a result, right sizing operations, reducing costs, and changing the structure of organizations have been on the rise in recent quarters. We expect that there is going to be a need for operations excellence style work and cost optimization in the upcoming quarters. Finally, our clients continue to request our tax services. Do you feel that the industry is being overly prudent in its pursuit of growth today?

The sector has always contemplated the three growth models - organic, inorganic or hybrid. Ultimately, boards and management focus on allocation of capital under some customized risk appetite. The various waves of consolidations have taught us all that the custodians of value creation should be extremely careful in adopting any of the models; some M&A have destroyed value, while some organic growth projects nearly wiped-out companies. So, there is a strong reluctancy to make the same mistakes of previous cycles. However, many indicators point to a potential supercycle for some minerals, but as we showed in our 2021 Top 10 Risks, uncertainty of demand remains. As a result, boards and management continue to show some restraints on flashy acquisitions or mega projects. We expect that approach to continue being sustained in 2023 because the global economic indicators are still mixed. On the critical minerals side, assurances are improving with more direct offtake agreements between mining and the EV companies, but overall, the industry is taking a prudent approach when it comes to pursuing growth in today's market. How can investors be convinced that allocating capital toward critical mineral projects in North American will deliver a positive return on investment?

The Mountain Pass mine is a cautionary tale of boom and bust in the ‘new minerals’ world. There is a sensible concern about the robustness of the demand for critical minerals. We are hearing more questions like - should producers assign a premium to critical minerals being produced in Canada for being greener, owing to green input energy or shorter transportation distances? Or should we focus on brownfield? Or should we integrate more upstream and downstream to reduce unnecessary bottlenecks? And what will be the contributions of governments? The clear path of commitments has investors strongly recommending offtake agreements between the mineral producers and the EV ecosystem. For Ontario in particular, we need to see more investments in manufacturing to close the loop of the EV value chain. Where do you expect the mining industry to experience the most change in the coming years?

Recently, many of our clients have been migrating across the value chain. For example, a traditional nickel concentrate company is building a battery grade nickel sulphate plant in Québec to supply an automotive company. We are also seeing mining companies taking stakes in technology businesses, because they realize they need to branch out and anticipate the next waves of value creation. Another area in which we expect to see massive change is indigenous involvement in mining.