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2017 Mining Risk Review

The future of mining is now

September 7, 2017

Driven by robust growth in emerging markets, the mining industry’s priority in the post-recession era leading up to 2011 was to grow volumes. This was achieved by applying capital, but perhaps without the cost discipline required. With the subsequent cooling of the commodities super- cycle, the emphasis shifted to bringing down cost and maintaining margin as prices dropped. Miners have risen to the challenge – rethinking their risk profiles, embracing technology and exploring innovative ways of working in pursuit of greater efficiency and productivity.

This has served the industry well. Amongst the wider spectrum of natural resources sectors, mining companies are seen as leading the charge towards digitalisation, automation and remote operations.

New frontiers produce new risks

But as mining turns to more exotic locations in volatile geopolitical environments, and pushes technical frontiers at depths of 3 km to access more complex ore bodies while relentlessly reducing costs, the industry risk landscape continues to evolve. Demand for commodities such as cobalt and lithium for batteries within consumer electronics, renewables and electric vehicles adds to this trend, with miners being driven to newer geographies and methods of production.

Sitting above core operating risk is the renewed focus on linking societal outcomes to business success, such as workforce safety, community engagement and environmental sustainability. This is the new license to operate, and no longer optional.

Societal outcomes critical to business success

Sitting above core operating risk is the renewed focus on linking societal outcomes to business success, such as workforce safety, community engagement and environmental sustainability. This is the new license to operate, and no longer optional.

The future of mining is now!

So what next? We think miners have done a great job at creating their future. But with it comes a new set of questions, and indeed, risks. For example, how will the environmental risk profile of the mining industry change as climate pressures increase over the course of the next decade? Or, what will the mining workforce of the future look like? While some of the fundamental questions will remain (for example: where will we find the mineral deposits of the future or what will fuel demand growth for the next decades?) it is clear that the future of mining is already here and the time to respond to new risks is now.

We at Willis Towers Watson strongly believe that human capital risk and asset risk are inextricably linked and should always be addressed together. Our mining experts would be delighted to discuss how you can better manage or transfer your risks.

We hope you find the 2017 Willis Towers Watson Mining Risk Review valuable and informative. Part one focuses on four key challenges the mining industry must address in new and innovative ways - geopolitics, stakeholder relations, digitisation and people; part two focuses on risk mitigation and transfer issues.

To read the full report, click the "download" button, above or below.