Social license, disruptions, geopolitics key for mining in 2021 – Ernst & Young

The social license to operate, potential disruptions and geopolitical risks will be the most pressing topics for miners globally in 2021, according to London-based Ernst & Young (EY). 

While society moves to overcome the health crisis, mining companies must increase their commitments to the communities around their projects and operations, as the public will have higher expectations of how companies act on various topics. 

According to Eduardo Valente, EY partner for the mining sector, one of those topics will be property rights, particularly in terms of how companies make their first approaches to land owners before starting exploration works in preparation for greenfield projects.

He also said that work should be done on the public face of mining in order to improve how it is seen and underline its positive contributions.

“Mining companies must work together with governments and industry associations to prepare a stronger message regarding the value of mining for society,” he said in a webinar reporting the results of the firm’s research on risks and opportunities for the mining industry.

Discussing potential disruptions during 2021, the executive highlighted that almost 80% of the 250 mining executives interviewed during the EY study said that their companies are not well prepared to face new problems such as the current health crisis. 

In the event of new disruptions, EY suggests that companies should have a dedicated team to manage crises and another one to lead operational resumption processes, increase liquidity, improve communication with key stakeholders and understand the impact of the disruption on value chains, while ensuring transparency. 

With regard to geopolitical risks, the EY research reveals that the pandemic has resulted in increased nationalism, so mining companies must adopt a proactive and diversified approach to business during the coming months in order to improve relations with national authorities, as well as suppliers and clients. 

During the presentation, Valente said that the world’s energy transition towards cleaner generation will boost investment in essential minerals, so mining companies have to evaluate their portfolios in order to increase revenues. 

The executive also predicted that investments in greenfield mining projects could grow in this new scenario. 

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