License to operate rocketed from seventh to first position in the EY Top 10 business risks facing mining and metals in 2019-2020 report, with over half of survey respondents listing it as the number one risk.
“The stakeholder landscape is changing and miners need to adapt,” says Iain Thompson, EY Canada Mining & Metals Advisory Leader. “Rising societal expectations, the impact of new technologies and the desire for greater collaboration are all pushing mining and metals companies to rethink their approach to license to operate. It’s time to move beyond social and environmental issues, and address license to operate more holistically with a purposeful commitment to community, government, employee and environmental needs beyond the mine.”
License to operate climbed the ranking from seventh position in 2018, moving digital effectiveness, maximizing portfolio returns and cybersecurity back a notch.
- Digital effectiveness is still challenging the mining and metals sector. While miners have begun making headway in using digital tools to improve productivity, they need to apply these solutions across the entire value chain to create a digital mine that can truly transform and emerge as a dominant player in the market
- Maximizing portfolio returns is becoming more of a balancing act. Higher commodity prices and rising cash flows are pushing miners to assess their capital allocation to ensure highest future returns. Beyond building or acquiring new mines, companies need to consider boosting investments in innovation and transformative technologies
- Cybersecurity is a growing concern in an increasingly connected world – and the attack surface is only getting larger across physical assets, digital infrastructure and business processes. Cyber spending has increased, but now the focus should be on how cybersecurity will support and enable enterprise growth
“Many of the top risks remain the same going into 2019, but digital disruption is adding new challenges into the mix. Disruption, future of workforce and fraud all entered the ranking for the first time this year,” says Thompson. “To get ahead, miners will need to use capital and collaboration to their advantage as they transform and protect themselves from steady and upcoming business risks.”
Access the full Top 10 business risks facing mining and metals in 2019-2020 report at ey.com/miningrisks.
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SOURCE EY (Ernst & Young)