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Mining losses uncovered: The cost of disruption

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.

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The mining sector is entering an age of unprecedented scale. To support the global energy transition, the world will need to mine more minerals in the next 30 years than in the past 70,000 years. However, as operations become more sophisticated, the cost of disruption has become catastrophic. A single equipment failure or extreme weather event can halt production and cost hundreds of millions overnight.

In this high-stakes environment, mining executives need comprehensive data to mitigate risks and protect investor confidence.

The numbers that are redefining mining risk

Marsh's proprietary loss database reveals the true anatomy of mining claims and these key findings will change how you think about risk:

69%

Flooding leads natural catastrophe losses

Flooding drives nearly 70% of natural catastrophe (Nat Cat) claim value in mining. As climate change intensifies extreme rainfall, remote mine sites face escalating flood exposure that traditional models underestimate.

45–55%

Insurance recovery gap

Mining operators recover only 45–55% of gross losses through insurance, versus ~75% in renewable energy. High deductibles, waiting periods, sub-limits, and underinsurance create a persistent protection gap.

$115 million

Average fire-related claim

Fire and explosion events average $115 million per claim, accounting for 25.7% of total losses. Hot work, combustible dust, and electrical faults remain the leading ignition sources after 25+ years.

What you'll learn by downloading

Actionable intelligence drawn from 20 years of insured mining losses — structured to help risk managers and finance executives make better decisions.

Detailed analysis of approximately $15.3 billion in gross claims across 135 events — broken down by hazard type, geography, and commodity — revealing where the real exposure lies.

Understand the structural reasons mining BI ratios far exceed other industries, and how commodity price volatility amplifies the financial impact of every incident.

The shift to single large mills and crushers has created catastrophic single-point failure risk. Learn how to quantify and mitigate this underappreciated exposure.

Dissect the structural factors — high deductibles, complex BI valuations, underinsurance, and long repair lead times — that leave operators absorbing the majority of losses.

From site-specific flood modeling to parametric insurance solutions for ice road failures and water scarcity, understand how leading miners are adapting to climate risk.

Preventative, predictive, and proactive maintenance frameworks, critical spare parts strategies, fire prevention programs, and innovative risk transfer structures that close the protection gap.

Learn how captives, layered programs, and parametric solutions can reduce premium volatility, increase recovery ratios, and provide cover where traditional policies fall short.

Candid insights from global risk leaders on where mining risks are heading, what underwriters are scrutinizing, and how industry collaboration can improve outcomes.

FAQs

According to Marsh's analysis of over 20 years of mining claims data, the leading causes of mining losses are operational incidents rather than natural disasters. Fires and explosions account for the largest share of mining losses at 25.7% of total gross claims — with an average claim size of US$115 million per event — followed by geotechnical failures (22.5%) and machinery breakdowns (16.5%). Together, these operational hazards represent roughly three-quarters of total recorded mining losses, totalling approximately $10.3 billion. Understanding these mining claims trends is foundational to effective mining risk management. Hot work practices remain a persistent ignition source for fires, while the industry's shift toward single, high-capacity mills and crushers has amplified the impact of machinery failures. Geotechnical events, including tailings dam failures and slope collapses, are less frequent but produce some of the sector's largest and most complex mining losses — as illustrated by the 2019 Brumadinho disaster in Brazil, which resulted in a settlement exceeding US$7 billion. Flood is the dominant natural catastrophe driver, accounting for 69% of natural catastrophe claim value. Effective mining operational risk programs must account for all of these hazard categories, since mining — unlike most industries — is exposed to fires, explosions, machinery breakdown, floods, earthquakes, structural failures, and geotechnical events simultaneously.

Building mining resilience requires a layered approach that addresses the root causes identified in loss data: improper maintenance, absent spare parts, and inadequate controls. A robust mining risk management program should combine three maintenance pillars — preventative, predictive, and proactive — to reduce unplanned equipment downtime. Preventative maintenance follows OEM-based schedules; predictive maintenance uses real-time sensor data to detect anomalies before failures occur; and proactive, reliability-centered maintenance focuses on eliminating root causes through cross-functional collaboration and root-cause analysis. Beyond maintenance, mining resilience depends on maintaining onsite inventories of critical spare parts — particularly for large mills, transformers, and crusher components — since a missing mill motor can extend an outage beyond a year, far exceeding policy sub-limits. Mining risk assessment should also encompass structural integrity programs for tailings facilities, geotechnical monitoring, and flood mitigation infrastructure. For natural catastrophe exposures, site-specific climate modeling and scenario planning are essential given the increasing frequency and severity of extreme weather events. Finally, engaging early with mining insurance partners to design layered programs — combining traditional coverage, captive structures, and parametric solutions — ensures that protection keeps pace with operational complexity and commodity price volatility.

From a mining risk assessment perspective, business interruption consistently produces the greatest financial impact on mining operations — representing approximately 80% of total gross mining losses across all hazard categories. Within this, machinery breakdowns pose a particularly severe mining operational risk: modern operations increasingly rely on single large mills or crushers that can generate millions of dollars of revenue daily, meaning a single component failure with no spare available can trigger multi-month outages. Fires and explosions are the most frequent high-severity events, while geotechnical and structural failures — though less common — generate the industry's largest individual mining losses and can trigger cascading environmental, regulatory, and third-party liabilities. Natural catastrophe risks, led by flooding, are growing in significance as climate change intensifies extreme weather events. What makes mining operational risk uniquely challenging is the absence of diversification: unlike manufacturing, a mine is tied to a single ore body, so when production stops, revenue simply ceases until repairs are complete. This geographic and operational rigidity, combined with long equipment lead times and remote locations, means that the mining claims trends consistently show BI losses outpacing physical property damage — a ratio far higher than in most other industries.

Mining business interruption is the dominant financial threat the sector faces, consistently accounting for around 80% of total gross claim value — and the trend is growing. Unlike other industries where production can be rerouted or subcontracted, a mine is operationally tied to a single processing stream, so any disruption halts revenue entirely until repairs are complete. The financial impact is compounded by commodity price volatility: when a loss event coincides with elevated metal prices, every lost ton of production translates into disproportionately higher revenue losses, even when physical property damage is limited. Mining insurance recovery further exacerbates the challenge — average recovery ratios in mining hover around 45–55%, compared to approximately 75% in sectors with more standardized exposures. This gap is driven by large deductibles, multi-week waiting periods before coverage activates, sub-limits that cap BI indemnity, and the complexity of BI valuations where production can partially continue via stockpiles or alternate processing routes. Mining claims trends show that machinery breakdowns carry some of the lowest recovery ratios of any hazard category, often because outage durations exceed policy sub-limits. To close the protection gap, mining companies should invest in detailed BI valuations based on current commodity prices, conduct scenario testing and stress analysis, and work closely with mining insurance brokers to design programs that combine traditional BI coverage with parametric solutions and captive structures — ensuring adequate protection even in worst-case disruption scenarios.

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Access $15.3 billion in mining claims insights — download below.

Article

Mining losses uncovered: The cost of disruption

$15.3B

135

20+

The numbers that are redefining mining risk

~80%

Business interruption dominates

~70%

Operational risks lead

69%

Flooding leads natural catastrophe losses