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The mining industry’s biggest risk for 2027 sits in its own pits, as operational complexity leads EY’s latest ranking of business risks and opportunities for mining and metals, ahead of capital, supply chains and rising costs.
According to the consulting firm's recently published report, ore quality drives much of the concern. Twenty-nine percent of respondents named grade variability as their most significant operational complexity issue. EY said depletion leaves miners with fewer accessible or economic mine faces, narrowing their options when disruption hits.
The strain already shows in producers’ numbers.
For instance, lower grades at Sentinel in June helped push First Quantum Minerals' (TSX:FM,OTCPL:FQVLF) C1 cost to US$2.02 per pound of copper. Codelco’s C1 cash costs reached US$2.08 per pound, up 46.89 percent from 2019, on equipment rental fees, unexpected maintenance, a seismic event at El Teniente and a stronger Chilean peso.
For gold, a July 1 rock wall failure halted extraction at the Barnat open pit at Agnico Eagle Mines (TSX:AEM,NYSE:AEM) Canadian Malartic complex. The company expects the failure to cut output by up to 150,000 ounces a year in 2027 and 2028, pending geotechnical reviews.
Inputs add to the bill. EY named energy, logistics, sulfuric acid and explosives among the cost drivers. The closure of the Strait of Hormuz triggered a global shortage of sulfuric acid, a reagent used in copper refining.
Miners have mostly responded by building buffers.
Fifty-three percent have adopted technology that improves supply chain visibility, and 52 percent have increased inventories or stockpiles. Only about a third have diversified their supplier base, and a quarter are pursuing strategic partnerships.
Capital remains available, EY said, but investors are favoring strategically important commodities and jurisdictions with greater policy certainty.
Governments are also stepping in as financiers. EY put public financing commitments in critical minerals at about US$65 billion in 2025, more than four times the 2023 level.
Miners are still investing in artificial intelligence to lift productivity, though EY warned that poorly integrated systems carry their own costs.
“AI agents working in isolation can increase costs, silos and complexity,” said Paul Mitchell, EY’s global mining and metals leader.
Connected operations also widen exposure to cyber threats. Only 18 percent of respondents reported full visibility across their industrial control systems, and EY places 67 percent of mining and metals assets in what it calls the “vulnerability” zone.
License to operate rounds out the top 10. Twenty-eight percent of respondents named community trust as a top sustainability issue, and 26 percent expect governments to tighten stakeholder consultation rules within the next 12 months.
EY urged miners to plan for uncertainty rather than wait for it to pass, and cautioned against short-term fixes that erode long-term capability.
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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.