The Mining and Metals Industry Action Group (IAG) of the World Economic Forum, in collaboration with Accenture, has over the last few months explored and identified areas where the industry can collaborate to prepare for a world being reshaped by COVID-19. This blog is the third in a series of publications that is looking at this work.

As transportation was delayed and regions restricted cross-border travel with the spread of COVID-19, key questions emerged for mining and metals: How can a truly globalized industry develop a value chain that anticipates shifts and is able to respond quickly and accurately to changes in supply, demand, operations and logistics? How can it build the ability to keep working and moving during a pandemic—or any other major disruption, for that matter?

The World Economic Forum, in collaboration with Accenture, has been looking at building resilience through “The Connected Value Chain.” A connected value chain relies on close collaboration, technology and end-to-end integration to not only reduce costs, but also enhance supplier diversity and, ultimately, resilience. That concept is clear enough—with this end-to-end approach, the value chain as a whole can be in a better position to identify and adjust to changing conditions. The question is, how do you get there?

The pandemic’s impact on the value chain points to several areas where improvements are likely to pay off in the mid- to long-term. For example, mining and metals companies can diversify their supplier base and reduce their reliance on individual companies or geographic areas. The need for such diversity of supply was highlighted when COVID-19 caused China’s Hubei province, which is responsible for 4.5% of the country’s GDP to be shut down,1 causing Chinese exports to fall 17.2% from January to February, compared to the previous year’s levels.2 COVID-19 events exacerbated a global trend towards supply chain localization. While the industry is unlikely to localize in the short term, global sourcing patterns are likely to change as end-use companies seek to source closer to home. Mining and metals companies will face increasing pressure to have a shorter, more flexible supply chain.

In order to accomplish this, mining and metals companies can also look at pooling shipments of their commodity products through contract swaps, resource hubs or logistics sharing, which would simplify supply chains. That approach is already common in the oil and gas industry, where different companies’ products are combined in pipelines for the purpose of efficient transport.

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Mining and metals companies will face increasing pressure to have a shorter, more flexible supply chain.

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Staying ahead of uncertain demand

COVID-19 also showed that fluctuations in demand can happen at any time. As pandemic-related government stimulus packages come to an end, for example, many countries are expected to invest in infrastructure development and green growth. This will put increasing pressure on the supply of certain metals, especially copper, zinc, iron ore and nickel.

The key to navigating this ongoing uncertainty in demand will be staying in sync with downstream customers, which has not been the industry’s strong suit given its position in the value chain. Mining companies (and to a lesser extent metals businesses), have operated in relative isolation, far upstream from downstream buyers and consumers. Indeed, an Accenture study found that two-thirds of metals respondents struggle to get customer centricity right, leading to consequences in terms of customer attrition.3

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Smart, agile and data-driven

To remedy that situation, mining and metals companies can consider two basic strategies—become “hyper-smart” or “hyper-agile.” A hyper-smart company is focused on using tighter connections with partners, along with technologies such as machine learning, to provide earlier insight into changing demand, giving them more time to adjust. A hyper-agile company aims to react quickly to changing situations, typically through increased flexibility of operations. This approach was seen with US and UK car manufacturers that were shut down by the pandemic, and then quickly pivoted production lines to make ventilators, allowing operations to continue while providing significant value for society.

Mining and metals companies can support these approaches by expanding a “touchless supply chain”—one in which accurate, timely data is widely shared and tracked by partners. This enables improvements in performance and customer satisfaction and lets the entire value chain coordinate actions to meet demand more effectively. It also has the potential to give mining and metals companies more direct access to—and a deeper, analytics-driven understanding of—downstream customers and end consumers. The importance of this is likely to grow, as consumers and businesses alike continue to embrace e-commerce, creating more data that can be leveraged by upstream companies. To reap these benefits, mining and metals companies will need to simplify the value chain and build the enabling data-sharing infrastructure with technologies such as RFID and blockchain.

An effective value chain is, by nature, a collaborative effort—and in general, the further up and down the chain collaboration extends, the better. The World Economic Forum has focused on several areas where broader collaboration can help the industry build The Connected Value Chain, including increasing flexibility, enhancing traceability, and rethinking product strategies. By working on both fronts—enhancing their own capabilities while increasing their collaboration with value chain partners—mining and metals companies can get closer to customers while reducing risk and building the resilience needed for tomorrow.

Accenture and World Economic Forum leads

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David Burns

Managing Director, Lead – Natural Resources, Accenture

Jörgen Sandström

Head of Mining and Metals Industry – World Economic Forum

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We would also like to thank Sylvain Marpeau-Roussel, Marina Colombo and Renée Van Heusden from the World Economic Forum for all their support and contributions.


1 Coronavirus will change the way the world does business for good, © The Financial Times Limited 2020
2 “China Exports Plunge Amid Coronavirus Epidemic.” Dow Jones News, March 9, 2020. Factiva, Inc. All Rights Reserved (accessed September 1, 2020).
3 Accenture Global Buyer Values Study, 2020

Kathryn Jacobs

Managing Director – North America Mining Lead

Janet Taylor

Consultant – Natural Resources

Amy Callahan

Managing Director – Lead, North America Chemicals & Natural Resources

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