License to operate continues to dominate the top risks list for miners

Annual ranking captures risks and opportunities on mining and metals executives' minds

• 44% of mining companies rank license to operate as the top risk to their business
• Sector brand and transformation pressures push up ranking of future of workforce
• Digital and data optimization potential continues to go untapped in the sector

TORONTO, Oct. 2, 2019 /CNW/ - Nearly half (44%) of global mining and metals executives rank license to operate as the biggest risk to their business for the second year in a row, according to the 12th annual EY Top 10 business risks and opportunities 2020 report.

"Increased stakeholder pressure and the rise of ethical (ESG) investing continues to keep license to operate top of mind for the sector in Canada and abroad," says Jeff Swinoga, EY Canada Mining & Metals Co-Leader. "Companies must show how they're working towards sustainable and inclusive growth to redefine the sector's image as a responsible source of the world's minerals. Demonstrating these values is also key to addressing growing workforce challenges." 

Future of workforce rose from 7th to 2nd place in the risk ranking due to increasing demand for and difficulty attracting the digital and data-related skills needed to support the future of mining.

"Every mining and metals company is in the process of defining or executing on their own version of transformation," says Theo Yameogo, EY Canada Mining & Metals Co-Leader. "Digital effectiveness isn't about pushing the boundaries of innovation, which are far more complex to achieve by a single company. It's about raising the visibility and performance of your business by embracing available technologies. This transformation requires adequate roadmap and execution plans, which the industry tends to overlook or underestimate."

"Digital and data optimization" fell one place but held its position in the top three business risks cited by miners as they grapple with how to unlock the most value from investments.

"Machine learning models and artificial intelligence can surface incredible insights for mining and metals players," says Yameogo. "Ultimately, AI uniquely creates or improves a company's competitive advantage by churning multi-source data into valuable business levers. It's a pervasive technology nowadays that the mining and metals sector should start adopting."

The 2020 ranking also includes four new entrants gathering attention from executives: reducing carbon footprint (4), high impact risks (5), replacement of production (8) and innovation (9). Together, these challenges tell a story of a sector focused on redefining its future.

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SOURCE EY (Ernst & Young)