Climate change, natural disasters and commodity price risks were listed as key concerns by 46 per cent of mining executives surveyed in Australia.

According to KPMG partner and mining risk specialist Caron Sugars, the main theme of Australia’s mining risk forecast is ‘transition’.

“The Australian mining sector now finds itself at a transition point,” she said

“Miners must closely monitor and manage the ongoing health crisis presented by COVID-19 but mining executives must also continue their focus on the medium to long term.”

Australian mining companies also concerned about impacts of the COVID-19 pandemic on the physical and mental health of the mining workforce and mining communities, while understanding the requirement to manage cyber risks with more people working remotely.

Nonetheless, according to Sugars, 85 per cent of respondents viewed technology disruption as an opportunity rather than a threat, making it the second most important strategy for growth after organic growth.

“The risks created by the global COVID-19 pandemic have been broad and varied,” Sugars said.

“For Australia, our Mining Risk Forecast shows that most obviously there has been the impact on the physical and mental health of the mining workforce and mining communities. There have also been challenges in managing mining sector supplier and liquidity risk.”

KPMG conducted its global mining risks survey in January this year, before the COVID-19 pandemic became a global threat, however the report indicated that other less-immediate risks in the medium to long term will persist and potentially grow.

According to Sugars, addressing climate change — even during the COVID-19 pandemic — would encourage some commodities such as copper and battery minerals to have increased demand, however the industry must prepare for uncertainties around the climate change risk.

KPMG global and Australian mining sector leader Trevor Hart said amplified price risk and volatility; digital transformation; new ways to work; and increased focus on social value, and environmental, social and corporate governance (ESG) are the primary focusses for both the Australian and global mining sectors.

“We believe commodity prices will be volatile for the foreseeable future as COVID and Geopolitical impacts reverberate through global commodity demand and supply,” he said.

“COVID-19 has demonstrated the value of operational agility and accurate real time information for leaders. This is also about addressing supply chain risk to ensure security of supply. We have seen that ability in the quick response of miners in managing potential choke points and building optionality across the chain.”

Hart said COVID-19 represents immediate risk management, but other risks will “continue to persist and even amplify” in the medium to long term”.