Rising operational complexity has been identified as the top risk for the mining and metals industry in 2026, according to EY’s latest annual report. This assessment, based on an analysis of 500 survey responses gathered from June to July 2025, highlights a significant shift in the sector’s primary concerns. The report suggests that the industry must fundamentally disrupt its operational approaches to maintain competitiveness amidst increasingly difficult extraction conditions, deeper mining operations, and persistently declining ore grades.
The complexity arises from a confluence of factors, including increasingly challenging ore bodies, the necessity of mining at greater depths, and a global trend of declining ore grades. These conditions amplify operational variability due to inconsistent ore geometry and geotechnical challenges. Aging infrastructure and persistent workforce shortages exacerbate these issues. The trend of depleted quality deposits is forcing operations into more remote geographical regions, introducing additional costs and risks associated with underdeveloped infrastructure, technically demanding extraction, and heightened environmental or political exposure. This creates a disconnect with investor expectations for operational predictability.
EY’s top-ten challenge ranking for 2026 also includes rising costs and productivity concerns, capital requirements, resource and reserve limitations, license to operate considerations, workforce challenges, geopolitical tensions, digital transformation and innovation demands, sustainability requirements, and evolving business models.
Financial and productivity pressures have intensified, with royalty payments seeing a substantial increase. In 2024, International Council on Mining and Metals (ICMM) member companies paid US$13.4 billion in royalties and US$28.6 billion in corporate income tax to host countries. This pushed combined royalty and corporate income tax rates to 40.6 percent, marking a 7.7 percent increase year-over-year. These financial burdens are compounded by labor shortages, expanding trade tariffs, elevated energy expenses, and supply chain disruptions, all of which contribute to higher logistics and procurement costs. These inefficiencies negatively impact profit margins and reduce operational agility.
Capital investment, while descending from the top position held the previous year, remains a critical challenge, ranking third on EY’s list. Mining companies are increasingly competing for investment capital in markets heavily influenced by technology sector investments. The weighted average cost of capital for mining has more than doubled in comparison to major technology companies, a trend attributed to higher interest rates and the sector’s inherent capital intensity.
Perhaps the most concerning medium-term threat highlighted is the acute labor crisis. Some reports project significant retirements within Canada’s mining workforce in the coming years, with insufficient candidates to fill these roles. Seventy-five percent of surveyed executives expressed limited confidence in their ability to resolve this staffing crisis, which, despite ranking sixth among the top challenges, was a recurring theme throughout the EY report. Insufficient staffing, whether due to a lack of qualified candidates or vacant positions, directly leads to reduced productivity, increased operational costs, and compromised safety outcomes. The industry faces intense competition for specialized expertise, driving up labor compensation while simultaneously struggling to attract new talent to mining careers.
In response to these multifaceted challenges, EY recommends strategic pathways involving targeted investments in productivity improvements. This includes implementing sophisticated management operating systems, adopting advanced processing technologies for lower-grade ore recovery, and utilizing predictive analytics for preventive maintenance programs to mitigate operational risks.
District-level collaboration is identified as a particularly promising avenue for growth in 2026. Joint ventures and partnerships among neighboring mining operations can facilitate resource sharing, improved complexity management, and operational optimization. Examples of successful collaboration include partnerships in Ontario’s Ring of Fire region with Indigenous nations and agreements among mining companies, underscoring the viability of collective approaches.
The report places significant emphasis on long-term planning, acknowledging the rapidly shifting geopolitical landscape and its potential to disrupt mineral supply chains. Strategic initiatives such as brownfield reprocessing and collaborative partnerships are suggested to align individual company interests with broader societal needs, recognizing the essential role of minerals and metals in sustaining global life systems.
Comprehensive strategies for navigating the sector’s complex landscape in 2026 also involve human-centered approaches, investments in digital innovation, transparent communication with investors, integration of renewable energy sources, and enhanced community engagement.
Sources
- https://magazine.cim.org/en/news/2026/the-biggest-risks-and-opportunities-for-mining-and-metals-in-2026-en/
