Top Mining Industry Risks of 2024
Published: 24th January, 2024
Entering a new year allows us to examine the top risks and opportunities that are top of mind for mining and metals industry executives in 2024. If you haven’t already read it, Ernst and Young’s report – “Top 10 business risks and opportunities for mining and metals in 2024” has detailed breakdowns of the key industry trends.
Below, we summarise the trends in EY’s report and what trends we have seen our customers acting on.
It should be no surprise that ESG remains in the number 1 position this year. There is an increasing focus on ESG reporting, with companies needing to back up their environmental claims to satisfy shareholders and potential investors. This, along with new mandatory reporting requirements beginning FY24/25, has kept ESG at the top of mind for mining executives.
With the wide variety of areas ESG encompasses, companies need to become comfortable reporting on their efforts and ensure their whole supply chain is squeaky clean (and that their data backs up any claims). ESG is a big topic with many subtopics, so if you are stuck on where to start on your ESG journey, check out our recent Byte session.
Capital has flown up eight places from last year, taking out 2nd place under ESG. Of course, with increased inflation and a decrease in spending, it is no surprise that companies are struggling to raise the capital needed to get projects off the ground. Utilising digital tools to increase productivity at a low cost is vital to overcoming these issues, helping to reduce spending without compromising productivity.
License to operate, climate change and geopolitics
License to operate (3rd), climate change (4th) and geopolitics (7th) are all top risks to the industry in 2024. Miners are expected to contribute to the places they are operating in, have sustainable practices, practice a more circular economy and have good relations with local groups in the areas they operate in. Although LTO and climate change fall under ESG, EY’s report separates them due to the impact these subtopics have.
Digital and Innovation
It’s no shock that digital and innovation has moved up nine spots from 2023. Companies have an increased focus on automating processes and improving productivity. We are starting to see autonomous vehicles and drones embraced by companies such as Roy Hill and Rio Tinto, along with many other solutions that rely on data analysis and digital technologies.
However, we are still finding that whilst miners are data-rich, many still fail to use this data to its full potential. In our Scope Bytes event on Business Intelligence (you can see it here), we discussed how collecting meaningful data can be used for predicting events such as breakdowns. Continuing to develop better ways to analyse data and investing in meaningful data will play a large role in miners increasing productivity and autonomy.
A new risk on the block (and not unexpected) is the emergence of cyber risks. We have all seen in the past year how devastating cyber attacks can be on a business, affecting the trust of customers and the perception of the business. The data breaches in leader companies such as Optus and Medibank have shown the extent companies will have to go to, to protect their data. As mentioned previously, miners have massive amounts of sensitive data. Employee, supplier, shareholder and operational data can all be targeted through a data breach or held for ransom, causing significant impacts on productivity.
In a previous Scope Byte event (you can see it here), we discussed what measures companies can take to improve their digital security. One of the most significant ways to protect your data is to move to a hosted environment, such as Scope Systems Cloud Hosting. Moving onto a cloud service with appropriate security measures allows you to reduce your risk, housing your data in a fully certified hosting environment. Remember, your hosting environment should include disaster recovery, server monitoring, backups, and more.
New Business Models
Another new risk/opportunity on the list is new business models, coming in at number 9 and rising ten places since the previous year. Companies have a renewed focus on improving their mine-to-market flow, with several areas influencing executives to take a step back and re-evaluate their operations. Key influences include the growing need for a circular economy, especially with mandated ESG reporting, and the rising digital and AI technology that can improve productivity.
Last but not least, falling seven spots on the list to number 10 is Workforce. The industry is still struggling to find talent, with challenges including a competitive market, poor perceptions of work-life balance, and limited career development. EY’s report highlights mining companies are struggling to recruit younger talent for positions due to the lack of career development, with younger employees looking to work for a company that matches their values and purpose.
Looking at these top 10 tops makes it interesting to see how 2024 plays out. At the start of this year, we asked our LinkedIn audience what their key focus is in 2024. ESG was at the top of the list, followed by 2nd Cyber Security, with AI and Machine Learning and Process Automation. One thing is guaranteed – the digital realm will undergo much growth in the mining and resources sector!