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Water Risks for the Metals and Mining Industries

The Carbon Disclosure Project and Eurizon Capital have released a report detailing threats water risks pose for metals and mining companies – and how these risks are already threatening their bottom line.

Key findings of the Metals and Mining: A sector under water pressure, analysis for institutional investors of critical issues facing the industry report include:

  • Detrimental impacts such as increased costs, production and transport disruption, energy loss, and even loss of licenses to operate are already being felt and over 90% of respondents report exposure to substantive water risks that have the potential to impact their business now or within 5 years.
  • Water poses a significant constraint to growth and threatens the future value of companies in the mining and metals sector.

Although some metals and mining companies do engage in mitigation and risk reduction strategies, like the rest of the private sector, they are not yet fully engaged in regional water management issues.  Currently, 1/3 of respondents report financial losses due to water-related issues, including Alcoa, which lost $130 million in 2011 due to flooding.

As water risks threaten these companies’ bottom line, investments to protect their sources, minimize environmental fines, and reduce flooding will become more attractive.  The metals and mining industries could become important players in the IWS space, further engaging in water trading schemes as they do in Australia or in other programs designed to reduce the risks they face from flooding, water quality, and lack of water availability.

What role does the mining sector play in your watershed?

Are they potential participants in your projects?

Read the full report here.