Short-term and operational issues are among the top concerns for mining and metals businesses, with sustainability dropping down the list of priorities, a new study by EY has found.
According to the EY Top 10 Business Risks and Opportunities survey for the mining and metals sector, which surveyed 500 senior industry executives worldwide, sustainability is now the ninth-ranked priority, down from second place in a previous survey undertaken by EY.
More than half of leaders in the mining industry have either delayed or reassessed their commitments, EY noted, with just 56% confident that they will meet their nature positive obligations.
Sustainability initiatives ‘slowing’
‘Sustainability initiatives are slowing across the sector,’ EY noted. ‘More than half of survey respondents have reassessed and/or delayed commitments, likely due to market volatility but also because of few premiums for green materials.’
In addition, many respondents are ‘unsure’ as to what they need to measure or report on when it comes to sustainability, and are looking to impending International Sustainability Standards Board (ISSB) standards to offer clarity.
Some 60% of mining and metals firms are either ‘extremely’ or ‘very’ confident that they will meet their water positive targets, while 58% said that they are either ‘extremely’ or ‘very’ confident of achieving their nature positive goals. This compares to 40% and 42%, respectively, that answered they are have ‘moderate’, ‘slight’ or ‘no’ confidence in achieving said targets.
Operational complexity
Chief among the areas of concern for mining and metals firms is operational complexity, as mines get deeper, ore grades decline, and costs increase. As EY noted, predictable sector output is ‘critical’ to maintaining shareholder confidence and securing capital.
“Operational complexity is the focus, not just because of uncertainty but because the sector recognises it must disrupt traditional ways of operating to win,” commented Paul Mitchell, EY global mining and metals leader. “As mines age or are replaced, complexity will inevitably increase, an issue exacerbated by a need to control costs and improve productivity.
“But miners that use this moment as an opportunity to accelerate innovation, including through the utilisation of digital and AI will position themselves for growth when certainty returns.”
According to the report, one in five mining executives plans to increase AI investment by more than 20% over the coming year, with a focus on productivity, safety, and efficiency.
Other issues cited include capital allocation priorities, licences to operate, workforce shortages and geopolitical shifts. Read more here.
