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By Ulla Setswalo
Miners who are waiting for calmer conditions before committing to big decisions are waiting for something that will not arrive, according to EY’s Top 10 business risks and opportunities in mining and metals report. Drawing on responses from 400 senior executives worldwide, it finds a sector that now treats uncertainty as the new normal, with greater operational complexity, disrupted supply chains and a more selective capital market all weighing on mine continuity.
Operational complexity is the top risk, followed by capital and supply chain. EY’s Global Mining and Metals Lead, Paul Mitchell, revealed that mines are harder to run as they age, reserves get depleted while new ones are harder to mine and process. “The important thing is not to wait for this uncertainty to disappear, it won’t. Companies must reassess the assumptions behind strategies, portfolios and capital decisions and build flexibility into how they operate. Those that move early, will be the winners,” said Mitchell.
Depletion cuts operating flexibility by limiting mining areas, feed choices and processing options, which makes disruption harder to absorb. Reserve grade variability, cited by 29% of respondents, ranks second among the drivers of complexity after regulatory compliance delays. Material handling, labour availability, processing capacity, transport and logistics as well as equipment reliability follow at between 24% and 26%. Capital is available but more selective. Forty four percent of miners are pursuing funding from original equipment manufacturers, while 39% are approaching sovereign wealth funds and 39% are seeking investment from governments. Mitchell remarked that access to diverse funding sources will be critical as companies seek to preserve flexibility when markets change.
Supply chains have shifted from a focus on efficiency to one on continuity. Miners are improving visibility through technology (53%) and holding more inventory or stockpiles (52%) and Mitchell added that the focus should be on the most critical vulnerabilities rather than resilience at any cost. Rising costs rank fourth, as strong prices for some commodities fail to offset structural pressure from dearer inputs and more complex operations and Mitchell noted that productivity programmes are often undermined by organisational silos.
Geopolitics rounds out the top five and its effects reach capital and supply chains too. Public financing commitments in critical minerals more than quadrupled between 2023 and 2025 to about US$65Bn and 28% of respondents expect direct government investment in the next 12 months. Mitchell said governments increasingly view secure mineral supply as a strategic priority and are offering incentives for domestic mining, processing and refining. He expects the volatile environment to continue whatever the result of near term political events such as the US midterms.
Technology is the double edged theme. Innovation has dropped out of the top 10 but Mitchell shared that AI and other technologies will play an increasing role in productivity and in managing complex operations. Greater connectivity, third party integration and AI adoption are also creating new vulnerabilities and cybersecurity has entered the top 10. EY finds that 67% of mining and metals assets sit in a vulnerability zone, with below average visibility and cybersecurity controls. The remaining risks on the 2027 list are carbon, sustainability, changing business models and licence to operate.
