Lost Productivity Headlines Ernst & Young's Top Mining Risks

(Kitco News): According to Ernst & Young, lost productivity is the top risk for miners in their Business Risks In Mining And Metals 2014-2015 report.

“Boards and CEOs are now realizing that regaining lost productivity and gaining new ground is critical for long-term profitability and achieving an adequate return on capital employed, and requires a whole-of-business response,” EY says in the report.

“This broad transformational approach is essential and is yet to be applied effectively by any one sector participant. This huge step change is why this risk is top of the ranking.”

Rounding out the top five risks were capital dilemmas - allocation and access, social license to operate, resource nationalism and capital projects.

A new entry in the 10th spot of top mining risks is access to water and energy.

“With global demand for energy expected to increase 36% by 2025, and with falling ore grades, this risk is compounding year by year, with the sector facing higher energy prices and volatility.

Similarly, water scarcity is an issue demanding a strategic and practical response,” they say. Rounding out the top 10 were price and currency volatility, infrastructure access, sharing the benefits and balancing talent needs.

Courtesy: Kitco News