A new survey of mining leaders by KPMG in Canada finds an industry confronted by stringent compliance and regulatory demands, pressures related to community and environmental matters, and concerns about access to capital at a time when the world's transition to clean energy depends on the secure and sustainable supply of critical minerals.

"The outlook for growth is strong, yet the risks and opportunities that lie ahead for the mining industry have never been broader or more diverse," says Heather Cheeseman, a partner and the national mining leader for KPMG in Canada.

"The consensus among mining leaders is that their ability to develop new mines is becoming an almost insurmountable uphill struggle. Access to capital isn't the only barrier. Permitting remains as live an issue as ever, with the length of time and effort required to secure permits showing little sign of improving."

The International Energy Agency (IEA) warned earlier this year that unless more investment is made in projects such as new mines and recycling, there will be a shortfall in critical metals and mineral supplies. According to the IEA, the world's projected supply of lithium will meet only 50% of global demand by 2035 and copper resources will meet only 70% of demand.

Despite the apparent challenges with developing and operating mines, nearly 80% of mining executives are optimistic about the industry's five-year growth prospects, up sharply from 62% in KPMG's last global survey in 2022, the report says.

"The Canadian government's support for the critical minerals exploration and development is likely driving confidence among Canadian mining leaders, while its increasingly protectionist stance on foreign takeovers garners a mixed reaction," says Katherine Wetmore, a partner and GTA mining leader for KPMG in Canada. "But, while the overall picture is one of confidence, the reality is mining companies are grappling with so many different issues, with the top two risks being community relations and social licence to operate and commodity prices."

Community relations and social licence to operate are regarded as important near-term and long-term risks to operations, the report finds. Access to capital, permitting risk, and geopolitical uncertainty round out the top five.

Nearly half (46%) of mining leaders said mergers and acquisitions (M&A) are critical strategies for their growth, although they are increasingly looking to establish strategic alliances, joint ventures, and partnerships to tap into new technologies, innovative ways of working and expert skillsets, the report says.

"The industry's focus on securing resources for technology and renewable energy is anticipated to drive continued M&A activity in the near future," says Wetmore. "In fact, copper and lithium accounted for over 70% of critical mineral deals by volume last year."

The report is based on a survey of 100 mining executives worldwide, primarily in Canada, and includes operators, exploration and development companies, mining service providers, and mine finance companies with a market capitalization of between $100-million and more than $10-billion.