Ore containing copper, cobalt and nickel at the Andover mine in Western Australia. Photo by Paul-Alain Hunt via Unsplash

For the third consecutive year, mining executives have identified environmental, social and governance (ESG) issues as one of the key risks facing the industry, according to EY. Released in October of this year, the professional services firm’s “Top 10 business risks and opportunities for mining and metals in 2024” report found that ESG issues are the number one concern for mining executives heading into 2024 for several reasons, not the least of which involves winning over stakeholders and investors.  

For the report, EY consulted more than 150 mining executives from major mining regions across various roles including sustainability, technology and human resources. Paul Mitchell, EY global mining and metals leader, said in an Oct. 12 press release that mining executives who strengthen their focus on ESG in 2024 will see major business benefits. 

“Many miners are focused on achieving a net-positive impact,” he said in the release. “For those who get this right, there are significant benefits, including improved access to capital, a healthier talent pipeline and stronger licence to operate.” 

The report added that prioritizing ESG issues and achieving a net-positive impact are no longer considered nice-to-haves but must-haves. Investors and communities are becoming increasingly cognizant of ESG considerations, so it is not enough to simply toe the regulatory line—mining companies hoping to secure capital will need to go above and beyond the current policies set in place by governments to prove their commitments.  

After ESG issues, capital came in as the second key concern for the mining sector in 2024, according to the report. With capital ranking as the eighth biggest issue for miners in the previous year’s report, it is clear that capital is quickly becoming a hot-button issue as the sector struggles to fund the expansions needed to meet the demand for critical minerals that are essential to the energy transition.  

“The race to support the energy transition is accelerating, with the surge in demand for critical minerals underscoring the mining sector’s pivotal role,” Mitchell said. “The intertwining of sectors, such as automotive and battery manufacturing, with mining signals a transformative phase where collaborative efforts will be the cornerstone of sustainable progress.” 

The report found that the third biggest risk facing mining and metals companies in 2024 is cybersecurity, which has become a key concern again for the first time since 2020 due to a more complex threat landscape. According to the 2023 EY Global Board Risk Survey, only 40 per cent of mining and metals boards feel confident that they understand the biggest cyber threats facing their organization, signalling that cybersecurity should be a key consideration for business leaders in planning for the next year. 

With several real-time threats looming over the mining industry, the “Top 10 business risks and opportunities for mining and metals in 2024” report stated it is more important than ever that leaders operate with transparency and clearly communicate the value they bring to investors and communities, aside from financial benefits alone.  

“Miners need to get better at articulating the nonfinancial value they bring to communities and investors, beyond merely meeting regulatory expectations,” the report stated. “Creating and communicating a bigger, bolder vision of legacy beyond life of mine can demonstrate a company’s societal commitment.” 

Although the sector is in a state of massive transition and change, Mitchell said he believes the industry will persevere despite the many potential pitfalls. 

“This year’s ranking highlights the complex operating environment miners face,” he said. “The risks are numerous, but history proves the resilience and the inventiveness of the sector to turn these into opportunities. We expect to see more transparency, innovation, collaboration and agility over the next 12 months as mining and metals companies embrace the upside of change.”