Extractive Industries - Challenges and Opportunities

 

Extractive industries refer to businesses that extract oil, gas, timber, coal, paper, and other raw materials from the earth to be used by consumers. They use drilling and pumping, mining, quarrying, and other such industrial processes to extract minerals. 

 

Challenges 

 

Extractive industries are divided into two areas: (1) oil and gas, and (2) mining. 

 

Both sectors have a reputation for having a wide scale negative impacts on the environment. Because of their nature, these industries disturb the land and use a lot of energy to extract the resource they are developing. They are often seen as the main drivers of climate change. 

 

On top of this, both mining and oil and gas also face disruptive technological, political, and legislative changes. While the growth of these industries has generated significant income as well as future opportunities for countries that are resource-abundant, it also brought complicated environmental, social, and geopolitical challenges for businesses to navigate.

 

The road ahead 

 

What is the future of high-value resources including metals, oil, and gas? How will extractive industries adapt to the changing norms and regulations that have governed policymaking for many decades? To what extent can extractive industries address sustainability and climate change while improving their accountability and transparency? Is it time to rethink traditional business models because of decarbonization?

 

There is no doubt that extractive industries are in flux. Businesses in this sector need to have a solid strategy, ensuring that they are better equipped to take action when opportunities arise. They also need to be flexible to quickly implement new strategies and rethink their options as needed. 

 

An advisory firm can help businesses in this sector optimise their operations in the areas of risk, operational, and financial management. They can also help companies optimise their corporate structures in light of international tax systems. 



 

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