Operational complexity has emerged as the top business risk for the global mining and metals sector in 2026, overtaking external pressures such as geopolitics and sustainability as the key challenge facing the industry, according to EY’s ‘Top 10 Business Risks and Opportunities in Mining and Metals 2026’ report, published on October 16.

EY said the findings reflect a decisive shift in miners’ priorities – away from external threats and towards the fundamentals of operational reliability, execution and disciplined capital management. The report highlights how internal inefficiencies are now posing a greater threat to performance than market volatility or regulatory uncertainty.

“Operational complexity, a key topic of discussion in executive meetings, is now the number one risk and opportunity. Declining ore grades, deeper and more complex orebodies and aging assets make reliable output harder to achieve.

“Regulatory delays, labour shortages and infrastructure bottlenecks are equally weighted as production constraints are exacerbated by rising production costs. Restoring predictability – and investor confidence – requires a focus on maintenance discipline and alignment between planning and execution,” EY said.

The report points out that operational bottlenecks are intensifying as ore quality declines and assets age. Copper grades, for example, have fallen about 40% since 1991, while rail and plant capacity remain critical barriers to throughput.

EY found that maintenance discipline is deteriorating as short-term cost-cutting continues to outweigh preventive maintenance, even though optimal maintenance can deliver up to 15% cost savings and, in one Canadian example, extend truck life from 80 000 to 170 000 hours.

EY observed that misalignment between planning and execution is as low as 30% in some operations, undermining production predictability and eroding investor confidence.

“Functional silos are eroding performance. Alignment between planning and execution is as low as 30% in some operations, undermining production predictability and investor confidence,” the report stated.

Cost pressures and productivity losses have also moved sharply up the risk rankings, rising from sixth to second place this year.

EY said that, while higher commodity prices have boosted revenue, they have masked underlying productivity declines driven by higher energy and labour costs, royalties, and trade tariffs.

Structural challenges such as falling ore grades, sustainability obligations and infrastructure constraints are compounding these pressures. The report noted that digital innovation and automation will be critical to unlocking cost savings and improving efficiency.

“Rising costs and productivity have moved up the ranking from number six to number two this year. Higher prices in some commodities have boosted revenue but masked underlying productivity losses. Energy and labour costs, royalties and trade tariffs – combined with structural challenges such as declining ore grades and sustainability obligations – put pressure on margins.”

“Digital and innovation are critical enablers, offering integrated, data-driven operations and automation to unlock cost savings and improve productivity,” EY said.

The report found that capital discipline is tightening as miners increase capital expenditure but reduce shareholder returns. Companies are focusing on brownfield expansion, joint ventures (JVs) and streaming agreements instead of greenfield exploration, in response to regulatory delays and permitting challenges.

EY noted that the industry’s weighted average cost of capital has climbed to between 8% and 10%, more than double that of major technology peers.

“Companies are increasing capital expenditure and reducing shareholder returns in the ongoing shift toward growth-focused strategies. The industry continues to favour brownfield over greenfield exploration, reflecting longer development cycles hampered by regulation, sustainability and permitting. Miners are exploring JVs and partnerships to create long-term value while retaining cash to capitalise on opportunities,” EY said.

The report also pointed to the recent merger between Anglo American and Teck as a key example of strategic consolidation in the copper sector.

“The announcement of the Anglo American–Teck merger underscores how strategic imperatives, especially in the copper sector, can still drive significant industry transactions. This deal, which is set to establish one of the world’s top five copper producers, could be a pivotal moment for industry consolidation and portfolio optimisation as miners aim to secure essential minerals and metals,” EY said.

Geopolitical factors, while still relevant, have dropped to seventh place in the risk ranking. EY attributed this to the industry’s acceptance that assets and markets are largely fixed, but warned that companies should remain alert to the medium- and long-term implications of tariffs and trade disruptions.

“Geopolitics may have dominated headlines, but it has dropped to number seven. We believe this is because miners have accepted that assets – and to some extent, markets – are where they are.

“However, companies should remain vigilant to the impact of geopolitical uncertainty, particularly the medium- to long-term implications of tariffs and trade disruption. Building robust relationships with local governments and communities is critical,” the report said.

Workforce and digital transformation risks have also re-entered the top ten this year, ranking sixth and eighth respectively. The report found that miners are struggling to attract a diverse workforce amid tight labour markets and that digital transformation remains an urgent priority to improve safety, cost control, and sustainability.

“AI is the next frontier but successful investment requires tighter alignment with business priorities and a clear business case,” EY said.

The report concludes that miners are entering a new phase marked by operational risk, cost pressure and geopolitical uncertainty, even as global demand for energy transition materials, defence metals and data centre infrastructure continues to grow.

“Significant transformation of the sector is gaining pace, requiring more innovation, collaboration and agility. This is not the time to stand still – it’s time to reimagine mining,” EY said.