Accessing capital has lifted to No.2 in EY’s rankings of the top risks facing mining and metals businesses as the sector grapples to fund the expansions required to meet the demands of the energy transition.

Cybersecurity is also becoming a bigger issue as the pace of digital transformation accelerates.

But ESG remains No.1 on the rankings of risks and opportunities for the third year in a row.

EY global mining and metals leader Paul Mitchell said the organisation could see a number of key themes playing out.

“According to our survey respondents, scrutiny from all stakeholder groups is increasing, particularly around ESG issues,” he said.

“With these expectations anticipated to continue, miners will need to balance ESG priorities with other business goals, including productivity.

“Many are focused on achieving net-positive impact across a number of ESG factors, with significant benefits for those that get it right, including improved access to capital, a healthier talent pipeline and stronger license to operate.”

Capital has moved up in the ranking from eighth place to second as the sector competes for investment and incentives to accelerate exploration and development of minerals and metals vital to the energy transition.

“We’re seeing a shift from a short-term focus on returns to a long-term view of value, encouraged by recognition that longer-term investment horizons are required to meet 2050 net-zero goals,” Mr Mitchell said.

“Inflationary pressure has fast-tracked technology development, as miners focus on digital tools that can accelerate productivity.

“The pace of digital transformation is highlighting the importance of cybersecurity, which is new to the ranking this year.

“Supply constraints are a catalyst for consideration of circular economy principles, with miners more conscious of minimising waste.”

The EY report shows iron and steel, gold, and coal companies continue to attract the most capital, but investment is increasing in nickel and lithium.

Exploration budgets are on the rise – with the US, Canada and Australia the preferred destinations, due to their low-risk rating. 

The EY risks and opportunities report is based on interviews with more 150 executives involved in the mining and metals sector.