Critical minerals getting harder to mine as deposits age: EY

Critical minerals are becoming harder to extract as aging deposits, declining ore grades and increasingly complex operations threaten the mining industry’s ability to maintain production, according to a new EY report.

The Top 10 Business Risks and Opportunities in Mining and Metals report ranks operational complexity as the industry’s biggest risk for 2027, followed by capital availability, supply chain disruptions, rising costs and geopolitics. The findings are based on a survey of 400 senior mining and metals executives worldwide.

“Mining has always been complex, but the degree of operational complexity is increasing as mines age and reserves are depleted and the new ones are more difficult to mine and process,” EY’s global mining and metals leader, Paul Mitchell, said in a statement.

The challenges carry particular significance for critical minerals, which governments increasingly consider essential to industrial development and secure supply chains. Producers face the task of replacing depleted reserves while navigating more demanding extraction conditions, financing constraints and shifting government policies.

Depleting deposits

Regulatory compliance delays emerged as the leading contributor to operational complexity, followed by variability in reserve grades, cited by 29% of respondents. Labour availability, material handling, processing capacity, transport and equipment reliability each affected 24% to 26% of executives surveyed.

As mines mature, operators have fewer options to adjust production schedules, blend ore or redirect material through processing facilities. Lower flexibility makes it harder to absorb disruptions, potentially increasing costs and limiting output.

Developing replacement deposits presents additional challenges as companies confront more difficult mining and processing conditions.

Capital, the second-ranked risk, is also becoming harder to secure on favourable terms. Although funding remains available, investors are increasingly selective as commodity prices diverge, forcing miners to reconsider how they finance new developments and sustain existing operations.

The survey found 44% of companies are pursuing capital from original equipment manufacturers, while 39% are seeking sovereign wealth funds and another 39% are targeting government investment.

“Access to diverse funding sources will be critical as companies seek to preserve flexibility when market conditions change,” Mitchell said.

Supply chain disruptions, ranked third, are adding pressure by affecting the delivery of mining inputs, processing operations and access to markets.

To reduce their exposure, 53% of miners are investing in technology to improve supply chain visibility, while 52% are increasing inventories or stockpiles to protect operations against interruptions.

Rising costs present another obstacle. Even stronger prices for some commodities have not fully offset more expensive inputs and the additional demands of operating increasingly complicated mines.

“Productivity initiatives are often undermined by organizational silos and deliver greater value when managed across the entire value chain rather than through isolated cost-reduction programs,” Mitchell said.

Strategic supply pressures

Governments are stepping up efforts to secure critical mineral supplies, adding a geopolitical dimension to the industry’s operational and financial challenges.

Public financing commitments for critical minerals more than quadrupled between 2023 and 2025 to about $65 billion, according to EY. The survey also found 28% of mining executives expect direct government investment over the next 12 months.

“Governments increasingly view secure mineral supply as a strategic priority and are introducing incentives to encourage domestic mining, processing and refining,” Mitchell said.

The growing role of governments could create new financing opportunities for developers, although changing trade relationships, industrial policies and investment conditions may complicate long-term planning.

Geopolitics ranked fifth among the industry’s risks, but its influence extends into capital allocation, supply chains and decisions about where companies develop new projects.

Mitchell warned that uncertainty would persist beyond near-term political events, including the US midterm elections, requiring miners to build more flexibility into their investment strategies.

Technology could help producers overcome some of these constraints through artificial intelligence, automation and improved processing efficiency. However, greater digital connectivity is exposing mining operations to additional security threats.

Cybersecurity entered EY’s top 10 risks for 2027, with the firm’s research finding 67% of mining and metals assets fall into a vulnerability zone characterized by below-average visibility and cybersecurity controls.

Carbon, sustainability, changing business models and licence to operate completed the ranking.

For critical minerals producers, the findings point to a growing tension between governments’ ambitions to secure mineral supplies and the industry’s ability to develop and operate increasingly challenging deposits.

“The important thing is not to wait for this uncertainty to disappear – it won’t,” Mitchell said. “Instead, mining companies must reassess the assumptions underpinning strategies, portfolios and capital decisions and build greater flexibility into how they operate.”