Global mining and metals executives still view environment, social and governance as the top risk facing their business over the next 12 months, but access to capital has now also become a major worry, according to a new report from EY.which is based on interviews with 150 executives involved in the sector “highlights the complex operating environment miners will face in 2024”:
While a “healthier talent pipeline” has become less of a worry for mining executives , “improved access to capital” is now considered the second most important priority for major miners after ESG as the massive outlays required by the green energy transition become a firm boardroom agenda item.A renewed focus on growth capital could mark something of a turning point for the mining industry.
The last couple of years have seen this metric slip to around 10% as companies continue to favour shareholder returns over building new mines. There is no doubt lithium and nickel are attracting attention as mainstream investors and outside capital jump on the electric car bandwagon, but steep price falls for these commodities this year may see many cool on EV raw materials sooner than expected.
A review of 132 development projects requiring more than $1 billion of capital investment showed nearly one in five faced cost overruns, with an average blowout of $500 million.