Managing the transition
Welcome to this year’s edition of our Mining Risk Review. In these unprecedented times, the mining industry finds itself beset by challenges from all sides; as COVID-19 continues to tighten its stranglehold on every corner of the world, we would just like to take a moment to wish all our readers a safe and secure remainder of 2020.
“That’s why in this Review we address some of the key risk issues arising from the energy transition from a mining industry perspective.”
Graham Knight
Head of Global Natural Resources
The Mining Risk Review is one of a suite of publications that we at Willis Towers Watson Global Natural Resources publishes every year that focuses on the key industry developments and risk issues faced by our clients in each of our sectors (Oil & Gas, Power & Utilities, Renewables, Mining & Metals). We hope you will find that the issues that we discuss are the ones that concern you most; we would be delighted if you wanted to follow up on any of the issues discussed in the Review. We have included the e-mail addresses of all the authors at the end of each article, so do get in touch with them to discuss their areas of expertise in more detail.
Right now, I think it’s safe to say that the global business environment is in a constant state of flux, and there is no doubt that the pandemic is the number one immediate issue for so many of us. But there is one other issue out there that will undoubtedly survive the pandemic, and that is the issue of climate change and the ensuing energy transition. I’m sure you would all agree that the mining industry is going to be significantly affected by the global drive towards net-zero emissions targets.
As part of this transition, climate change and Environmental Social Governance (ESG) pressures are likely to have significant risk implications on the mining industry of the future. Only a few months ago the Financial Times was reporting that “companies that consider environmental and social factors — and abide by good standards of corporate governance — should be better equipped to ride out a downturn and quickly get back up to speed”. In the same article, the FT also commented that “investors are also still going all in on environmental, social and governance themes — and so far their bets have paid off. If anything, the pandemic has only reinforced fund managers’ belief that ESG is worth worrying about”1.
That’s why in this Review we address some of the key risk issues arising from the energy transition from a mining industry perspective. Please read on and I’d be delighted to discuss any of your issues arising out of this publication with you at any time.
1 Coronavirus is strengthening the hand of ESG investors” - Billy Nauman, May 15 2020...the energy transition is going to to be absolutely key for miners, together with the shift in focus away from fossil fuels and towards renewable energy as the world sets its sights more firmly on zero-emissions targets.
01
Margaret-Ann Splawn sets the scene with a detailed analysis of how climate risk is impacting the mining industry.
Higher rated ESG companies have, generally, outperformed and proven greater resilience to those that are not - the recent period incorporating COVID-19 has further demonstrated this.
Katrin Hayduk examines how ESG pressures are affecting the rise of automation and innovation in the industry.
Our experts from the Willis Research Network then show how mining industry risk managers have a vital strategic role to play in quantifying climate change risk, as well as improving their company’s ESG footprint.
Don Hunter is well placed to offer a perspective on how the mining industry might face a still uncertain, post COVID-19 future.
02
Responding to the challenging global insurance market conditions, Matthew Frost outlines the steps that mining companies should take to ensure the creation of an optimal risk financing strategy.
As geopolitical tensions around the world intensify, Lucy Stanbrough describes the process by which mining companies can more accurately identify, manage and transfer their geopolitical risk more effectively.
As the threat of cyber-attacks on the mining industry looms ever larger, our own Myles Milner outlines the latest developments in this critical sector and the options open to miners to rise to this significant challenge to their business.
03
In previous editions of this Review, we have divided our Property market analysis into several geographic regions, including separate articles for Europe and North America. This year, we have combined our comments across these regions as the increasing trend towards more centralised underwriting has resulted in very similar themes manifesting themselves in all the major mining market hubs.
The Brumadinho disaster in January 2019 unquestionably served as a trigger for insurers to determine their underwriting position in respect to mining and, while the focus on Tailings Storage Facilities (TSFs) continues to grow, the recalibration of market appetite has led to the emergence of a ‘lead – follow’ dynamic within the market.
European D&O market: unprecedented conditions
Eve Richards, GB Head of FINEX D&O at Willis Towers Watson | September 2020
North American D&O market: an unprecedented shift
Scott Saddington is Executive Vice President - FINEX and M&A and National Broking Leader – Canada, Willis Towers Watson Toronto | September 2020
Australia
Stephen MacDermott is Broking Director, Property and Casualty, Willis Towers Watson Brisbane | September 2020
China
Fiona Pei is a mining specialist working for Willis Towers Watson in Beijing | September 2020
South Africa
Adrian Read is Industry Specialist Leader: Natural Resources, Willis Towers Watson South Africa | September 2020
