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Australia’s mining sector has cemented its position as the fastest-growing contributor to national gross domestic product (GDP), expanding 3.7 per cent over the past year and underpinning more than 60 per cent of the country’s export earnings.
However, a new global report from FM highlighted that despite this, loss exposure across the industry remains dangerously concentrated, with fire now accounting for nearly a third of all severe losses worldwide.
The report, Understanding the Mining Industry: Loss Trends and Predictive Analytics, draws on two decades of engineering-led loss data across more than 300 mine sites.
Its release comes as Australian operators tackle a spate of high‑profile underground fires, including incidents at Perilya’s Broken Hill operation and Century Tailings’ Queensland site.
New South Wales’ regulator has also recorded quarter‑on‑quarter increases in fire and explosion notifications, signalling an escalating pattern rather than isolated events.
According to FM, fire risk is the single biggest driver of loss severity. Analysis has shown that it is responsible for roughly 32 per cent of total gross loss value in mining.
“Scale cuts both ways,” account engineering group manager and senior advisor at FM Michael Beaumont said.
“Australian mine sites generate enormous economic value, but a single fire or equipment failure can escalate quickly into a multi‑million‑dollar loss with a long, complicated road to recovery.
“Severity isn’t about bad luck, it’s about understanding risk concentration, controlling escalation and planning for restart before disruption hits.”
“Hot work” – cutting, welding and grinding near combustible linings, conveyor belts, cable runs, hydraulic systems and polymer-based materials – remains a persistent ignition source, intensified by the growing use of plastics and composites around process equipment.
“Effective control depends on more than permits,” FM’s report stated.
“It requires task‑specific hazard review, isolation, cleaning, supervision and verification before work starts.”
Equipment failure compounds the risk
A small number of critical asset classes account for the majority of equipment‑related losses: conveyors (32 per cent), heavy‑duty mobile equipment (21 per cent), motors (16 per cent) and mills (15 per cent).
Nearly a third (29 per cent) of losses stem directly from mechanical or electrical breakdown; FM said when structural failures and mobile equipment incidents are included, this rises to 53 per cent.
With Australia’s critical minerals sector expanding rapidly, and lithium exports alone forecast to exceed $13 billion by 2026–27, FM said its findings around commissioning risk are particularly relevant.
Losses frequently concentrate around start‑ups, shutdowns, maintenance and recommissioning, when safeguards are most likely to be bypassed or degraded.
The report outlines seven equipment‑focused factors operators should prioritise to reduce failure risk and limit escalation.
These are: maintenance, operating conditions, environment, operators, age and history, safety devices and contingency planning.
It also urged stronger hot‑work controls, disciplined change management, reduced combustible material concentration around conveyors and processing equipment, and more robust recovery planning – noting that business interruption is increasingly driven by restart complexity rather than physical damage alone.
For more information on FM’s mining resilience insights, visit risk.fm.com/mining.