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The future of mining risk: What decades of mining loss data reveals

20 years of insured claims data offers powerful perspective: large, volatile, and under-recovered losses are significantly impacting the mining industry. Download the definitive report on mining loss drivers and how to build true resilience.

Marsh's 20-year claims dataset doesn't just document the past — it illuminates the fault lines that could define mining losses through 2045. Climate extremes, the energy transition, and automation are already reshaping the risk landscape.

In the next 30 years, more minerals will need to be extracted than in the past 70,000 years to support the global energy transition. That demand for copper, lithium, cobalt, nickel, and rare earth elements will drive the most significant expansion in mining's history.

Marsh’s Mining losses uncovered: The cost of disruption and the path to resilience report draws on two decades and 135 significant insured claims totaling approximately US$15.3 billion, offering a powerful baseline for understanding what comes next. The historical patterns are instructive — but the forces shaping the future are unlike anything the past 20 years have seen.

Starting point: What the last 20 years established

Marsh's data shows that operational hazards — fires, explosions, machinery breakdowns, and geotechnical failures — drove roughly 73% of all gross claims between 2006 and 2025. Business interruption (BI) consistently exceeded 80% of total loss value across nearly all hazard categories. And the industry's insurance recovery ratio has stubbornly hovered at just 45–55%, leaving operators to absorb roughly half of every dollar lost.

These patterns are not random. They reflect structural features of the industry: geographic concentration, dependence on single-line processing, and the shift toward giant, high-throughput equipment with no redundancy. Those structural features are not going away, they're intensifying.

Force one: The energy transition demand surge

The clean energy revolution runs on minerals. Solar panels require silver and silicon. Wind turbines need neodymium. Electric vehicle batteries demand lithium, cobalt, and nickel. Grid-scale storage requires significant amounts of all the above. Meeting net-zero targets globally will require mining output at a scale that surpasses historical precedent.

This surge in demand will drive the construction of new mines, the expansion of existing ones, and the intensification of production across every commodity. Each of these dynamics introduces risk:

Force two: Climate change breeds unpredictability

Flooding already accounts for nearly 70% of all-natural catastrophe (Nat Cat) claim value in Marsh's dataset. And climate change will intensify extreme weather — but the story is more complex than simply more rain.

The report's analysis points to a future of extremes: more intense rainfall events and tropical cyclones on one hand, and more severe droughts and water scarcity on the other. For mining, both extremes are damaging in different ways.

Flood risk outlook

Mining operations are concentrated in remote, rugged terrain, some of which are most susceptible to flash flooding and infrastructure washouts. As extreme rainfall intensifies, access roads, conveyor systems, and tailings infrastructure face growing exposure. Even a single flood event that washes out a critical access road can cost months of production.

Water scarcity risk outlook

Many processing operations depend on significant water inputs. Droughts can restrict hydro power, curtail processing throughput, and in extreme cases, force partial or complete shutdowns. Some remote mines rely on seasonal ice roads that will form for shorter periods as winters warm, a growing source of uninsured logistical disruption.

Lars Gono, Global Head of Mining at Swiss Re, emphasizes the importance of continuously updating in-house climate models to incorporate the latest scientific data on tropical cyclones, flooding, and bushfires. The industry needs to plan for scenarios that historical data has never recorded.

Force three: Automation, electrification, and new failure modes

Autonomous haulage, battery-electric vehicles, and AI-driven processing optimization are moving from pilots to standard practice across major mining operations. These technologies offer real productivity and safety gains, but they also introduce failure modes that don't yet have 20 years of actuarial history behind them.

Technology risk: What's new

Massive battery storage systems, autonomous haul trucks, and high-throughput processing plants with AI-driven controls represent novel exposures. Cybersecurity vulnerabilities in connected operational technology (OT) systems could trigger production stoppages with no physical damage at all — an event type for which current BI coverage was not designed. Software failure, sensor malfunction, or network disruption could halt an entire mine without a single piece of equipment being physically damaged.

The interconnectivity that makes automation powerful also makes it fragile. Patrick Walker of Rio Tinto has consistently warned that complex, interdependent systems "amplify the impact of single-point failures." In an automated mine, that single point of failure may be a software update, a cybersecurity incident, or a failed sensor — not a mechanical breakdown.

Force four: Growing tailings and geotechnical exposure

The scale of tailings storage facilities will grow in direct proportion to mining output. The catastrophic events of the 2015 Fundão tailings dam collapse and 2019 Brumadinho dam disaster have already fundamentally changed regulatory expectations around tailings management, and future events could be even larger as individual facilities grow in scale.

Emerging liability exposure

Social license and sustainability pressures may drive post-incident obligations well beyond legal requirements — and well beyond insured amounts. As environmental and governance expectations harden into regulatory frameworks, the uninsured portion of geotechnical events is likely to grow.

What likely won't change: The dominance of BI

Through all these transformations, one thing is unlikely to change: business interruption will remain the dominant driver of mining loss value. As commodity prices for critical minerals rise and operations become more interconnected and interdependent, every day of lost production will carry a higher financial cost.

Lars Gono of Swiss Re notes the importance of continually updating pricing and modeling to reflect the growing BI component and commodity price volatility. The gap between what BI coverage provides and what miners actually need is likely to widen unless programs are actively redesigned.

The implication for modern day miners

The next 20 years will demand fundamental innovation in how mining risk is underwritten, priced, and transferred. Mining claims are already characterized by low frequency and very high severity compared to general property — and the severity trend will only grow as individual mine assets become larger and more valuable.

Parametric solutions, captive insurance programs, and bespoke BI coverage designed around specific commodity price scenarios will become essential tools. The miners who invest now in detailed risk engineering, regular asset revaluation, and early insurer engagement will be better positioned to close the recovery gap.

The historical data makes clear that mining's biggest losses are not random acts of nature — they are the product of identifiable structural vulnerabilities. As demand accelerates, those vulnerabilities will be tested at unprecedented scale. The miners who treat resilience as a strategic priority, not a compliance requirement, will be the ones who survive the next 20 years intact.

Get the full data-driven picture

Marsh's Mining losses uncovered: The cost of disruption and the path to resilience report provides the complete dataset, experienced commentary from Rio Tinto, Swiss Re, and MIRA, and detailed resilience strategies for mining executives. Download today to learn practical strategies to help your organization reduce loss frequency, improve insurance recovery, and build a foundation for long-term resilience.

Article

The future of mining risk: What decades of mining loss data reveals

Starting point: What the last 20 years established

Force one: The energy transition demand surge

Larger, higher-throughput equipment

New commodity geographies

Commodity price volatility