WTW Mining Risk Review 2024
The mining sector is navigating a matrix of change and elevated uncertainty. Emerging risks cannot be simply fed into a standard risk framework, and future-ready mining businesses are exploring new ways to identify and address changing exposures.
A wave of national strategies for critical minerals have been published in recent years, geared toward de-risking supply chains and increasing mining and processing capacity. The list of critical minerals will vary between countries, but the energy transition is increasing demand for copper, nickel, lithium, cobalt, and rare earths as industries such as battery and car manufacturers look at alternative chemistries. Meanwhile, China is adding new competitive pressures for both the domestic market, where consumer preference favours shorter-range vehicles, and export markets looking for cheaper alternatives.
China dominates supply chains for the transition metals across mining and processing but the United States’ Inflation Reduction Act (IRA) is incentivizing batteries with components sourced in the U.S. or other Free Trade Agreement (FTA) countries. The carbon intensity of production processes is likely to come under increased international scrutiny. With countries such as Indonesia reliant on a power system that is still dominated by fossil fuels, implications could be amplified across global supply chains.
Events once thought rare are occurring at scales previously unseen and unexpected.
Operators need to be mindful of an asset’s design to strike the optimal balance between deficiency and excess. Mines are often in remote locations with limited historical data to project future extremes of flood and drought. Compounding these exposures, is an increase in severe weather, making it harder to estimate parameters for design. Data-driven insights enable business leaders to:
Emerging risks are a product of change. With change, comes opportunity. For mining companies, identifying and aligning these opportunities with lifecycle planning can be the gateway to success. For example, studies by the British Geological Survey and Coal Authority have identified that mine water heating (a form of low-temperature geothermal energy) accounts for 40% of energy use in the U.K. and estimate that 25% of homes and businesses in the country are located above former coal mines. It is estimated that mine water projects currently in development or operation will save around 1800-2600 tonnes of CO2 per year.
To harness these uncertainties for competitive advantage, organizations need a process to identify emerging risks and then integrate them into their wider decision-making frameworks. Agility will be critical in seizing new opportunities.
Building foresight starts with identifying the data you need to capture, from micro to macro trends and from local to global issues. ISO 31050’s risk intelligence cycle for emerging risk outlines two interconnected iterative cycles: an external cycle and an internal cycle.
Keeping pace with this velocity will demand sophisticated analytics, expert judgement and decision-making frameworks to unlock competitive advantage. Data will be the differentiator. Implementing ISO 30150 for emerging risks will increase assurance and evidence for those enduring success factors.
To read more on the emerging risks facing the mining sector, please download the full article below.
| Title | File Type | File Size |
|---|---|---|
| Unearthing emerging and interconnected risks: prospecting new frontiers | .7 MB |
