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Mining Risk Review 2020

Managing the transition

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COVID 19 Coronavirus

By Graham Knight and Robin Somerville | September 15, 2020

With the transition of fossil fuels to renewables, energy transition is going to be key for miners.

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 


Author

Head of Global Natural Resources


Table of Contents


  1. Introduction

    Tom Holliday | Mining & Metals Leader, Global Natural Resources | September 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

Managing the transition


  1. Climate risk: transforming the mining industry

    Margaret-Ann Splawn | climate policy finance and investment consultant | September 2020

    Margaret-Ann Splawn sets the scene with a detailed analysis of how climate risk is impacting the mining industry.


  2. The rise of ESG: why it matters to the mining industry

    Jamie Strauss | founder of Digbee | September 2020

    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.


  3. ESG pressures: the rise of automation and innovation in the mining industry

    Katrin Hayduk | Senior Vice President and Mining Leader – Canada | September 2020

    Katrin Hayduk examines how ESG pressures are affecting the rise of automation and innovation in the industry.


  4. Enhancing your ESG response: the strategic role of the risk manager

    Matt Scott | Senior Director, Climate and Resilience Hub | September 2020

    Geoffrey Saville | Weather and Climate Risks Hub Leader | Willis Research Network | September 2020

    Lucy Stanbrough | Emerging Risks Hub Leader | Willis Research Network | September 2020

    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.


  5. The post-COVID-19 mining industry: the thoughts of an engineer

    Don Hunter | Willis Towers Watson Engineering Risk Management - Latin America | September 2020

    Don Hunter is well placed to offer a perspective on how the mining industry might face a still uncertain, post COVID-19 future.


02

Risk management issues


  1. Using risk and analytics to support your risk financing strategy: the views of a former risk manager

    Matthew Frost | Head of Risk Advisory, Australasia and Natural Resources Regional Industry Leader, Australasia | September 2020

    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.


  2. Geopolitics of resources: prospecting threats to the mining sector

    Lucy Stanbrough | Emerging Risks research manager | Willis Research Network | September 2020

    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.


  3. The challenge of digitalisation: troubleshooting cyber risk in the mining industry

    Myles Milner MEng, ACII, AMIMechE | Account Director, Renewables GB, Willis Towers Watson | September 2020

    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

The global insurance markets for mining risks


  1. Property: how do you solve a problem like the market?

    Robin Somerville | Editor , Mining Risk Review | September 2020

    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.


  2. Liabilities: dealing with a “double whammy”

    Matt Clissitt | Deputy Head of Liability, Natural Resources | September 2020

    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.


  3. D&O: the worst of all worlds

    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


  4. Regional market commentaries

    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


Author

Business Development Director for Willis Towers Watson Natural Resources

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