Survey IDs trade tensions, ESG policies as top issues for miners

Image from White & Case.

Global law firm White & Case has released the results of its fourth annual survey on mining and metals, identifying trade and ESG issues as the industry’s top concerns for 2020.

White & Case surveyed 64 senior industry decision-makers on an array of topics, including key risks for 2020, what ESG areas will be most scrutinized, which metals will do best and the level of M&A expected this year.

Resource nationalism, climate change regulation and climate change activism were also identified as risks

Trade tensions was selected as the top risks for the mining sector in 2020 by 26.3% of respondents, followed closely by a slowing Chinese economy (24.6%). Although a preliminary agreement between the United States and China has been reached on trade, one quarter of respondents expect trade tensions to weigh on the mining sector. Resource nationalism, climate change regulation and climate change activism were also identified as risks.

In addition to climate protests and activism, the Brumadinho tailings disaster in Brazil last year also helped bring ESG issues to the forefront for mining. After productivity gains (chosen by 28% of respondents), ESG policies were chosen as the main priority for the sector in 2020 (26.3%). Another 17.5% identified tailings management and safety as the industry’s main priority, with 12.3% choosing climate change response.

Respondents expect copper to be the best-performing metal in 2020 (35% of those surveyed) with 21% choosing gold and 13% choosing lithium. Accordingly, 33.3% expect the most consolidation to take place in base metals this year, followed closely by precious metals at 31.2% and battery metals at 22.9%.

(This article first appeared in the Canadian Mining Journal)

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