Australian mining organisations face many climate risks that could significantly disrupt operations and cause long-term reputational damage if left unchecked.
FM’s recent report, ‘Sight Unseen: Navigating Out-Of-Sight Risks’, developed in partnership with The Economist Impact, shows more than 70 per cent of Australian executives reported revenue or property losses due to unexpected events.
And despite the impact of climate events like floods and bushfires on Australian businesses, 24 per cent rank climate-related risks as low or medium priorities.
Research from the UN Environment Programme Finance Initiative shows that climate events pose a major risk to mining operations, making it crucial that operators understand the potential impact on their businesses.
Mining operators often underestimate the impact climate events can have on operational sites and the infrastructure that supports them, including rail networks, shipping ports, power transmission lines, and more. These facilities might be hundreds of kilometres from the mine’s boundary, but still cause significant downtime when impacted.
As such, climate change is no longer a distant threat. It poses immediate consequences for Australia’s economy, with the resources and energy sectors facing some of the biggest challenges.
Bushfires fuelled by longer heatwaves and drought conditions pose a severe threat to mining operations in hot and dry regions. This risk is especially prevalent in Western Australia, with 90 per cent of the state prone to bushfires despite being home to nearly 1000 operating mines.
Additionally, the impact of the 2024 Queensland bushfires on one of the state’s major operations highlighted how bushfires have the potential to force extended site closures and extensive damage to surface piping infrastructure.
But the impact goes beyond flames; smoke from bushfires can also compromise air quality in mines, potentially endangering worker health. Both direct and indirect consequences of bushfires must be factored into operations’ preparedness plans.
Flooding poses another significant challenge, particularly for mining operations located near rivers or coastal areas. It’s caused major losses at multiple mine sites across the country in recent years, including a major incident in Queensland that led to a complete loss of key infrastructure and forced an operation to close while it committed resources to recovery.
Beyond direct damage and major downtime, floods can also cause power outages, disrupt supply chains, and displace workforces.
Mining operators also continue to underestimate cyclone risk, amid a false perception that cyclones haven’t historically caused major downtime events. But as one of the few industries that isn’t always in a position to select operational locations, cyclones pose key risks to mining equipment and operational resilience.
FM believes most losses incurred as a result of climate events can be prevented with the right insight and planning. Mining operators can take proactive steps, including comprehensive risk assessments, tailored mitigation strategies, and structural evaluations, to protect their operations from escalating climate threats.
Preparation is key and FM offers a boots-on-the-ground approach to understanding site-specific vulnerabilities, delivering practical, data-backed guidance to reduce exposure. Through comprehensive engineering assessments and consultation, FM identifies the biggest risks faced by a specific operation and develop tailored advice and strategies for mitigation.
Climate change represents an existential risk to many mining operators. Those that develop a robust risk assessment and effective mitigation strategy will be best positioned to face key challenges and protect their operation well into the future.
To find out more about how FM can help future-proof your mining operators from climate risk, visit the FM website for access to the natural hazard toolkit and other free tools.
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