By: Wickus Botha - Mining & Metals Leader, EY Africa 

In an era defined by geopolitical tremors—from the shadows of wars in Europe and the Middle East to Donald Trump's return to the White House—the mining and metals sector stares down a perfect storm of uncertainty. 

According to EY's "Top 10 Business Risks and Opportunities 2026" report, this volatility is curbing risk appetites, fostering a siege mentality of cost-cutting and capital hoarding. 

Yet, amid the gloom, the report charts a paradoxical path: a seismic shift from last year's emphasis on external ESG pressures to deeper, strategic threats like operational complexity and resource depletion. 

As demand surges for energy transition materials, defense tech, and AI data centers, miners can't afford complacency. 

The winners will be those who treat these risks not as roadblocks, but as catalysts for reinvention. It's time for the industry to shed its reactive skin and embrace a future-proof agility.

At the apex of this year's risk rankings, operational complexity has rocketed to No. 1—a newcomer born of declining ore grades, deeper orebodies, and aging infrastructure. 

The report paints a vivid picture: copper grades have plummeted 40% since 1991, while iron ore impurities climb, turning once-reliable mines into unpredictable beasts. Add regulatory snarls, labor voids, and infrastructure chokepoints, and production throughput becomes a crapshoot. Survey respondents flagged these bottlenecks with near-equal alarm, from skills shortages eroding frontline execution to processing plants buckling under feed variability. 

The fallout? 

Earnings misses that shave 0.2% off share prices per 1% shortfall, with mining laggards underperforming the S&P 500 by a brutal 3.6 points last quarter.

This isn't mere bad luck; it's a symptom of functional silos fracturing the value chain. As the report notes, misaligned planning and execution—often as low as 30% compliant with optimal schedules—breed grade cliffs and waste-bound orebodies. Maintenance discipline is another casualty, sacrificed for quick wins despite evidence of 15% cost savings from preventive overhauls. 

Miners have romanticised the "drill-baby-drill" ethos too long. 

The antidote lies in robust management operating systems (MOS) that fuse planning, assets, and execution end-to-end, much like oil and gas stalwarts have done for decades. Imagine predictive tools slashing variability, or advanced ore sorting resurrecting "waste" into profit. These aren't sci-fi; they're strategic imperatives to restore predictability and lure back jittery investors.

At No. 2, costs and productivity pressures have vaulted from sixth place, unmasked by commodity price spikes that paper over deeper rot. Energy and labour remain stubbornly elevated—energy costs still eclipse pre-pandemic norms in most markets—while royalties hit 40.6% for ICMM members, up 7.7% year-over-year. 

Tariffs and supply chain snarls compound the pain. Bulk commodities like iron ore face margin squeezes as prices dip, exposing structural foes: declining grades, sustainability mandates, and siloed ops that hobble asset reliability.

But here are the grounds for optimism. 

The report champions digital enablers—automation, AI-driven analytics—to claw back efficiency. Renewables via power purchase agreements (PPAs) aren't just greenwashing; they're pragmatic hedges against fossil fuel swings. The real unlock is human-centric integration: ditching episodic tech pilots for holistic models that empower workers, not replace them. In a sector where data maturity lags adoption, trusted platforms could turbocharge throughput, turning cost dragons into productivity dragons.

Capital allocation, slipping to No. 3 but no less pivotal, underscores a growth renaissance. For three years running, capex has surged while shareholder payouts dip, blessed by investors eyeing supply gaps in copper and beyond. The Anglo American-Teck merger looms as a watershed: a copper colossus with 70% exposure, synergies from adjacent ops like Collahuasi, and a blueprint for consolidation. Brownfield exploration trumps greenfield gambles, but discovery droughts—zero major gold finds in 2023-24—signal peril. With mine timelines ballooning to 18 years and WACC at 8-10%, financing flux demands creativity: streaming deals, JVs, and sustainable bonds.

Resource depletion (steady at No. 4) amplifies this urgency, with exploration budgets shrinking to $12.5 billion amid $5.4 trillion demand forecasts by 2035. License to operate (No. 5) holds firm, as community pushback—334 protests tied to transition minerals since 2021—delays projects. 

Workforce woes (up to No. 6) scream for diversity reboots, countering a "grey tsunami" with indigenous hires and AI upskilling. Geopolitics (down to No. 7) feels "priced in," but tariffs and resource nationalism—from China's rare earth curbs to Saudi swing investments—loom large. Digital innovation (No. 8) crowns AI as the next frontier, demanding governance to scale beyond proofs-of-concept. 

Sustainability (No. 9) stalls amid green premium droughts, yet nature-positive pledges endure. Finally, evolving business models (No. 10) herald vertical integration and circular plays, like Vale's waterless processing.

Under-the-radar threats like cyber (attacks tripled in 2024) and climate (droughts crippling Chile) merit vigilance, but the report's clarion call is clear: transformation accelerates via innovation, collaboration, and agility. Cyber resilience isn't IT's silo; it's LTO bedrock. New projects falter on permitting, but 30% of respondents bet on regulatory thaw. Climate confidence—over 50% hitting Scope 1/2 targets—belies Scope 3 realism gaps.

Mining's malaise stems from a short-termism that ignores its pivotal role in net-zero and tech booms. The Anglo-Teck deal isn't an anomaly; it's an archetype for "buy and build" portfolios fortified by district JVs, like Codelco-Anglo's 120 000-ton copper boost sans extra capex. Recycling urban waste and ultradeep tech could bridge depletion chasms, while ecosystem training ecosystems—universities, governments, miners—plug skills voids.

As 2026 dawns, standing still is a non-starter. 

Miners must reimagine: from cost-preservers to value architects, wielding AI not as gadgetry but as operational spine. Investors reward boldness—transparent LTO builders, diverse talent magnets and circular pioneers. 

Mining won’t just survive the current instability—it will be a shaping force for the next century.