Water Competition Poses Risks to Energy Transition and Mining Industry

Nearly two-thirds of the world's mining and metal operations are located in areas facing significant physical water risks, according to new analysis from the International Council on Mining and Metals (ICMM). The report highlights that increasing demand for clean energy commodities exacerbates the situation due to heightened competition for water between the mining industry and other consumers.

The analysis shows that 65.7% of mining and metal operations globally are at high risk for at least one physical water risk indicator. Specifically, 38.2% of facilities are in basins with high or extremely high groundwater stress or in arid regions. Furthermore, 27.4% of operations experience significant groundwater decline, and 27% face a high risk of drought, making drought the second most common risk category.

"Our findings show that water is already a critical issue for the mining and metals sector," said Dr. Emma Gagen, Director of Data and Research at ICMM. "If water risks are not better understood and managed across the economy, we risk unintentionally introducing significant constraints to the energy transition."

The report also notes that while water risks are global, their nature varies by geographic location and commodity. In some locations, such as Chile, 85.8% of operations face both water stress and annual variability in water availability simultaneously. The report is based on ICMM's updated global mining dataset, covering 12,000 facilities.

Stakeholders and policymakers need a better understanding of water risks to ensure the supply of commodities for future energy needs. ICMM aims to provide reliable data to support decision-making and promote sustainable water management.