Ageing mines and harder-to-process deposits are making production less predictable as financing and supply chain pressures mount, according to EY’s latest mining risk survey.
EY’s Top 10 Business Risks and Opportunities in Mining and Metals report ranks operational complexity as the sector’s leading risk for 2027, followed by capital, supply chains, rising costs and geopolitics. Companies should build more flexibility into investment and operating decisions as uncertainty persists, EY global mining and metals leader Paul Mitchell said.
“Mining has always been complex, but the degree of operational complexity is increasing as mines age and reserves are depleted and the new ones are more difficult to mine and process,” Mitchell said in a statement.
Regulatory compliance delays were the leading contributor to operational complexity, followed by variability in reserve grades, cited by 29% of respondents. Labour, material handling, processing capacity, transport and equipment reliability each concerned 24% to 26%. Depleting reserves leave operators with fewer mining areas, ore blends and processing options to absorb disruptions.
Selective investors
Capital remains available but investors are becoming more selective as commodity prices diverge. The survey found 44% of respondents were pursuing funding from equipment manufacturers, while 39% were seeking sovereign wealth funds and the same proportion were targeting government investment.
Supply chain disruptions are affecting mining inputs, processing, transport and access to markets. In response, 53% of respondents were investing in technology to improve supply chain visibility and 52% were increasing inventories or stockpiles. More expensive inputs and complex operations were also adding to cost pressures despite stronger prices for some commodities.
Government efforts to secure critical mineral supplies are creating financing opportunities while exposing companies to shifting policies and trade relationships. The survey found 28% of respondents anticipated direct government investment over the next 12 months.
Growing tensions
Cybersecurity entered the top 10 for 2027. Carbon, sustainability, changing business models and licence to operate rounded out the ranking, highlighting pressures that extend beyond replacing depleted deposits.
Mitchell cautioned that uncertainty would outlast near-term political events, including the United States midterm elections, and called on miners to reassess the assumptions behind their strategies, portfolios and capital decisions.
For critical minerals producers, the findings point to a growing tension between governments’ ambitions to secure mineral supplies and the industry’s ability to develop and operate increasingly challenging deposits.
“The important thing is not to wait for this uncertainty to disappear – it won’t,” Mitchell said. “Instead, mining companies must reassess the assumptions underpinning strategies, portfolios and capital decisions and build greater flexibility into how they operate.”
Source: www.northernminer.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
