License to operate was the number one concern with 63% of survey respondents flagging it as a top three risk, according a survey from EY published today.
The consultancy published its annual ranking of top 10 business risks.
To address concerns about meeting their social license, EY said miners need to work with governments and sector associations “…to help shape the messaging of the societal contribution and value derived from the mining sector.”
Miners took some leadership around COVID-19, which helped burnish their social license.
“In many jurisdictions, mining was declared an essential service during the COVID-19 pandemic, and miners extended their existing laser focus on the environment, health and safety to include local communities, suppliers and partners; indeed, many collaborated with government and sector associations to limit the impact of COVID-19 on these stakeholders,” wrote the authors.
“Initiatives included supplying sanitation materials, funding access to medical assistance and providing basic amenities, such as cleaning and sanitation items, clean water and medical equipment. These efforts have had a clear positive impact on LTO within the sector.”
COVID-19 also had some affect in the number two concern: high-impact risks.
“The experience of the pandemic has heightened stakeholder expectations around how enterprises prepare for, manage and monitor all high-impact risk exposures,” wrote the authors.
Productivity and rising costs were risk number three. Innovation and digitization ranked last in concerns.
The report also had a focus on COVID-19 and its effect on the mining industry. As a result of COVID containment measures that required shutting down many businesses, most mining CEOs don’t think the recovery will be U-shaped.
“[Many] mines have remained operational and productive during the pandemic, despite having less people on-site. Business continuity has come at a cost, however, due to the added expenses of new processes, procedures, protocols, health testing equipment and support for the workforce,” wrote the authors.
“Each commodity has been affected differently depending on current and future demand, stockpiles and the virus’s impact on supply. Given this, it was not surprising that our survey respondents have different perspectives on how recovery will unfold, with almost half predicting a W-shaped recovery (up and down).”
Only one-third thought the recovery would be slow and steady, a U-shaped recovery. Twenty-three percent thought the recovery would be quick, a V-shaped recovery.