I’ve been thinking a lot recently about mining supply chains and the growing transparency imperative.
No business is an island. Buying and selling products is a core function of mining companies. Through their dealings with other businesses, organizations, systems, processes and jurisdictions, these transactions can expose miners to a significant amount of risk – financial, environmental, social and governance (ESG) and otherwise.
Take a look at the 2025 edition of EY’s Top 10 risks and opportunities for mining and metals companies. While supply chains aren’t directly named on that list, its immediately obvious how the top three issues – access to capital, environmental stewardship and geopolitics – could be impacted by mining supply chains, and likewise, how mining supply chains could influence them.
For example, shortly after the outbreak of war in the Ukraine in 2022, many mining companies opted (or actioned sanctions) to sever commercial ties to Russian suppliers, impacting access to essentials, such as diesel, at some key operations. Likewise, access to critical mineral supplies is becoming a growing political issue with governments forming new alliances and even choosing to invest in mining projects directly.
But, as EY acknowledges, on the other side of risk lies opportunity. For companies that manage their supply chains carefully, the knowledge, relationships and cost/logistical advantages they provide can far outweigh the risks, making them one of the greatest value-creation tools that mining companies have. For example, through accelerating the development and implementation of green mining technologies.
The level of transparency, or ability to easily see through a supply chain, is critical here (although admittedly not easy to achieve if you have an ecosystem that’s 20,000+ suppliers strong). Honest, open and assured practices foster trust. They’re the basis of meaningful business relationships and provide credibility to the commitments that companies make.
Long story short, I think that supply chain transparency is quintessential to the future of responsible mining and should be a prerequisite to doing business. I’ll leave these thoughts and a reading list (below) for you to mull over. Send me your own musings when you get a moment, and I’ll see you next month for the final newsletter of 2024.
Carly