Two-thirds of global mining facilities face significant water risk, ICMM report says

Nearly two-thirds of the world’s mining and metals facilities are exposed to at least one significant physical water risk, according to a new report by the International Council on Mining and Metals.

The report, published on July 22, found that 65.7 per cent of facilities face risks linked to water stress, drought, floods, depletion or year-to-year rainfall variability.

The findings highlight a growing challenge for an industry that is central to the global energy transition, as demand rises for critical minerals used in renewable energy, electric vehicles and infrastructure.

The report, Global Mining and Metals Water Dataset, presents what ICMM describes as the first comprehensive cross-commodity analysis of water risks across the mining and metals sector.

It combines the Global Mining Dataset with global water datasets to examine how more than 12,000 mining and metals facilities across 148 countries and regions overlap with water-related hazards.

The assessment looks at five physical water risk indicators: floods, droughts, baseline water stress, baseline water depletion and interannual variability.

Water stress is most common risk

Baseline water stress is the most common risk facing the mining and metals sector, the report found. About 38 per cent of facilities are located in river basins experiencing either severe competition for water resources or arid conditions.

Drought is the second most widespread water risk, affecting 27 per cent of mining and metals facilities worldwide. Exposure is especially severe in Africa and the Middle East, where 81 per cent of facilities face high or very high drought risk.

The report said countries including Zambia, Ghana and Uzbekistan have all their mining facilities exposed to high drought risk. In South Africa, 96 per cent of facilities are similarly affected.

Flood risk is lower by comparison, with 14 per cent of facilities exposed to high flood risk.

Flood exposure is particularly pronounced for alumina, aluminium, steel and molybdenum production facilities, where more than 24 per cent face significant flood hazards.

Risk hotspots identified

The report said water risk exposure is unevenly distributed across regions and commodities.

It identified clusters of compound water risk in the western United States, Chile, Peru, southern Africa, northern China, central India and western Australia. Each cluster faces a different combination of risks.

According to the report, 16 per cent of mining and metals facilities are exposed to high or extremely high interannual variability, meaning large year-to-year changes in water availability.

This risk is especially high in Oceania, where 74 per cent of facilities face high or extremely high interannual variability. That is more than double the exposure rate for the next most affected region, Africa and the West Asia, where 28 per cent of facilities face such variability.

Energy transition concern

ICMM’s Director of Data and Research, Emma Gagen, said the findings showed that water was already a material issue for the sector. “Our research shows that water is already a material issue for the mining and metals sector,” she said.

“If water risk exposure is not better understood and managed across the wider economy, we risk sleepwalking into a major constraint on the energy transition.” She said leading mining companies, including ICMM members, had embedded water stewardship principles and practices to manage water in ways that were “socially equitable, environmentally sustainable and economically beneficial”.

The report said water is both an essential resource and a growing constraint for mining operations. As demand for critical minerals increases, it called on governments, investors and industry to strengthen water stewardship and include water risk in long-term strategic planning.