The metals and mining industry is one of the most dangerous in the world. This is not just a mere speculation. A total of 40 miners died in accidents across the U.S. in 2023, the deadliest year in a decade for the mining industry. Zimbabwe, a relatively more minor country, has recorded 237 deaths in the same year. In the words of American novelist Tawni O’Dell, “Mining is a dangerous profession. There’s no way to make a mine completely safe.”
But is death the only risk in the mining industry? No, there are many more. What are the significant mining risks in 2024? And what are the opportunities? Explore all these in this article.
Mining Risks 2024 #1: Risks in Sustainability
Sustainability is the most significant risk in mining in 2024. In a recent report, Ernst & Young (EY) Global Limited, a substantial professional services network, has marked ESG (Environmental, social, and governance) as the most significant risk in the metals and mining industry. The report has enlisted the ESG factors, primarily under scrutiny from investors. The list is below.
Figure 1: ESG factors, which are most likely under scrutiny from investors
Mining companies that successfully handle their ESG risks are better equipped to navigate changing market dynamics, securing their longevity and success. EY has also listed Climate Change as a significant metal and mining risk. Let’s see some statistics about the sustainability risks of metals and mining industry:
- According to a WWF report titled “Extracted Forests,” mining is the fourth most significant driver of deforestation and directly or indirectly impacts one-third of forest ecosystems.
- The World Bank Group’s “Forest-Smart Mining” report mentions that, until 2015, 44% of the world’s large operational mines were built in forest areas.
- In 2019, nickel mining emissions totalled about 120 million metric tonnes of carbon dioxide equivalent globally. For copper, the figure was 109 million metric tonnes, while iron ore emissions reached 96 million metric tonnes. These statistics highlight the significant environmental impact of the mining industry, posing a substantial risk to sustainability.
- According to the IEA, the energy sector accounts for around 40% of human-caused methane emissions, second only to agriculture. Out of the 135 million tons of energy-related emissions, approximately 42 million tons are attributed to methane from coal mines.
Mining Risks 2024 #2: Mining Employee’s Mental Well-Being and Other Workplace-Related Issues
One of the critical risks associated with the mining industry that the mining sector faces is workplace-related issues. The Mental Awareness, Respect and Safety (MARS) Program Landmark Study, a study specifically focused on the mining industry, has found some evidence.
- High or highly high psychological distress was reported by 30% of mining employees.
- 16% of workers said they had experienced bullying at least twice a month in the preceding half-year, and 22% said they had witnessed it.
- 41% of female employees in the mining industry reported being put down or treated poorly.
- 34% of female miners reported encountering offensive sexist comments, such as comments implying that their gender is inappropriate for the work they perform.
A paper released recently by the Australian Council of Trade Unions (ACTU) showed discrimination by the mining companies in terms of paying employees:
- Mining companies could afford to give every Australian worker – all 14 million of them – a 6% pay rise in the cost of living and remain the most profitable industry in the country.
- Profits in the mining industry have increased by 194% over the past decade, while wages have decreased by 6%. This trend indicates a significant disparity between the industry’s profitability and the remuneration of its workers.
Mining Risks 2024 #3:Cost-related risks associated with the mining industry
Labour and Energy costs are increasing rapidly in the mining industry. Though revenue is also growing, the rapid cost increase is one of the significant mining risks in 2024.
Figure 2: Labour and Energy Costs Increase from 2019 to 2022.
Mining Risks 2024 #4:Cybercrime Related Risks
About a year ago, Australian iron ore miner Fortescue Metals was targeted in a cyber-attack, with the Russian ransomware group C10pm claiming responsibility for the data theft. The company acknowledged the breach on May 28th, 2023, describing it as a “low-impact cyber incident.” Another incident took place in March 2023. Rio Tinto, the world’s second-largest metals and mining corporation, experienced one of the most significant cyber-attacks in the mining industry’s history. The breach enabled hackers to leak employees’ family information on the dark web and a substantial amount of company data.
So, cybercrime has become one of the gravest mining risks in 2024.
Opportunities
However, it’s not all doom and gloom. Large mining companies across the world are stepping up and taking significant strides toward environmental sustainability, offering a glimmer of hope in the face of these challenges.
- As per the GlobalData report, among the top companies in the mining industry, Rio Tinto saw the most significant increase in references to environmental sustainability in Q1 2024 compared to the previous quarter. This increase in references indicates a growing focus on environmental sustainability, which presents a significant opportunity for the industry. GlobalData identified 1,250 sentences related to ecological sustainability in Rio Tinto’s filings, making up 9% of all sentences and marking a 7% increase from Q1 2023. Mentions of environmental sustainability rose by 12% to 705 for Gold Fields, 54% to 579 for Glencore, 34% to 460 for Teck Resources, and 47% to 458 for Anglo American.
- Anglo-American, Antofagasta, BHP, Nippon Steel, and Rio Tinto are becoming primary adopters of cybersecurity in the mining industry.
- De Beers, the world’s largest diamond producer, and Fortescue, Australia’s third-largest mining company, pledged to achieve net-zero Scope 1 and 2 emissions by 2030.
So, we can expect a decrease in different risk factors in the mining industry. Mining risks in 2024 can only be decreased by adopting new business models and taking significant steps to reduce workplace-related problems. These measures are crucial for mitigating the risks and seizing opportunities in the mining industry.
