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We present an elaborate preconditioning scheme for Krylov subspace methods which has been developed to improve the performance and reduce the execution time of parallel node-based finite-element (FE) solvers for 3-D electromagnetic (EM) numerical modelling in exploration geophysics. This new preconditioner is based on algebraic multigrid (AMG) that uses different basic relaxation methods, such as Jacobi, symmetric successive over-relaxation (SSOR) and Gauss–Seidel, as smoothers and the wave front algorithm to create groups, which are used for a coarse-level generation. We have implemented and tested this new preconditioner within our parallel nodal FE solver for 3-D forward problems in EM induction geophysics. We have performed series of experiments for several models with different conductivity structures and characteristics to test the performance of our AMG preconditioning technique when combined with biconjugate gradient stabilized method. The results have shown that, the more challenging the problem is in terms of conductivity contrasts, ratio between the sizes of grid elements and/or frequency, the more benefit is obtained by using this preconditioner. Compared to other preconditioning schemes, such as diagonal, SSOR and truncated approximate inverse, the AMG preconditioner greatly improves the convergence of the iterative solver for all tested models. Also, when it comes to cases in which other preconditioners succeed to converge to a desired precision, AMG is able to considerably reduce the total execution time of the forward-problem code—up to an order of magnitude. Furthermore, the tests have confirmed that our AMG scheme ensures grid-independent rate of convergence, as well as improvement in convergence regardless of how big local mesh refinements are. In addition, AMG is designed to be a black-box preconditioner, which makes it easy to use and combine with different iterative methods. Finally, it has proved to be very practical and efficient in the parallel context. [ABSTRACT FROM PUBLISHER]