By Michael Rundus, EY Regional Mining and Metals Leader, Oceania
A new report from EY explores how the energy transition is disrupting the sector and permeating 2025’s risks and opportunities radar.
The energy transition demands a significant uplift in mineral and metal production. But miners are grappling with the challenge of meeting demand while addressing a trifecta of pressures: maintaining capital discipline, achieving sustainable mining and meeting elevated stakeholder expectations. Macroeconomic conditions, long approval times, and perennial skills shortages add further complexity, stymieing the sector’s appetite to invest.
For the report, EY surveyed senior mining and metals leaders from organisations with US$1 billion in revenue through an anonymous online survey. Of the results collected, 17 per cent were from board or C-suite level; 48 per cent from leading departments, business units or commodity groups; and 35 per cent of respondents were at president, vice president or director level.
The findings from the survey of 350 senior leaders from all key geographies across the mining sector are presented in the report The Top 10 business risks and opportunities for mining and metals in 2025.
The risk ranking for the latest report is:
- Capital
- Environmental stewardship
- Geopolitics
- Resource/reserve depletion
- License to operate
- Rising costs and productivity
- Climate change
- New projects
- Changing business models
- Innovation
Capital takes top spot
Mining companies are under increasing pressure to manage capital effectively while making strategic investments in future growth. The huge demand from the energy transition means miners must increase output and grow.
The sector is facing the task of extracting more in the next three decades than it ever has before, and this must be done in a sustainable way.
However, the current economic landscape, geopolitical tensions, rising costs and declining productivity, means boards and CEOs need a strong focus on capital discipline.
Environmental stewardship a standout
Environmental stewardship ranks second in the report this year, with miners elevating it above a broader focus on environmental, social and governance (ESG). This is largely driven by growing investor expectations and new environmental standards.
According to the survey, nearly half of the industry’s leaders (46 per cent) are confident in their ability to fulfil their nature-positive obligations – underscoring a broader commitment to address environmental concerns proactively.
Waste management is another area of scrutiny from investors. This year, the focus on waste extends beyond just tailings, with progressive miners capturing value through improving mining performance, implementing closed-loop processes to minimise waste and reprocessing mining waste.
The commitment by International Council on Mining and Metals (ICMM) members to nature-positive goals has also driven greater attention to biodiversity, water management and other critical ESG issues across the sector.
Concerns amid rising demand
Resource depletion, ranked fourth, and new projects, ranked eighth, are new risks identified in the study this year, driven by soaring demand for minerals and rising exploration and construction costs.
Achieving global decarbonisation targets by 2050 will require a significant increase in the number of mines and volumes produced. However, capital raised for exploration has declined by four per cent year-on-year, with budgets favouring gold over future-facing minerals like copper. Lack of new discoveries and long permitting times add further complexity to the situation and put the energy transition at real risk.
With few major copper discoveries in the last decade and a global average of 15.7 years to bring a new mine online, the industry is facing a critical supply gap.
Geopolitics ranked higher in the latest survey than it did previously, with more companies realising the necessity of building resilient supply chains and initiating alternative strategic options, including partnerships and joint ventures.
Four risks fell out of the top ten in EY’s latest report – governance, cyber, digital and workforce. The omission of cyber and digital could be due to an increase in awareness and the widespread use and integration of digital solutions into everyday business. Although there is still a focus on cybersecurity, exclusion from the list could mean that companies are at the post-implementation stage whereby they are managing and maintaining solutions.
Ongoing skills and labour shortages continue to plague the industry, making the omission of workforce from the list surprising. Workforce risks have a significant ripple-on effect on other risks, yet as many as 55 per cent of survey respondents did not include it in their top ten ranking.
Forging a sustainable path forward
EY’s findings show a mining sector tasked with a monumental challenge: to significantly increase the production of minerals for the energy transition, while navigating capital discipline and strategic growth amidst a backdrop of economic uncertainty, resource depletion, heightened ESG expectations and the complexities of launching new projects.
It is no easy feat. Yet, the future of the energy transition – and indeed, the planet – depends on the sector’s ability to respond effectively to these pressing demands.
