By: Caroline Arkalji
Critical minerals such as copper, lithium, cobalt, nickel, and rare earth elements are crucial for the global energy transition. These minerals power electric vehicles (EVs), solar photovoltaics (PV), wind turbines, and other emerging energy solutions, and the demand for these resources is expected to triple by 2030 and quadruple by 2040. However, the mining industry is also facing vulnerabilities: stronger storms, floods, rising sea level, droughts, melting permafrost, and extreme heat. These natural phenomena are already disrupting operations and increasing mining costs, putting critical mineral production at serious risk.
Extreme weather events, such as heavy rainfall, storms, and flooding, are already damaging infrastructure, forcing mine shutdowns, and endangering workers. In recent years, copper mines in Australia and Indonesia were forced to close due to flooding, while flash flooding in Burkina Faso caused several miners’ deaths at a zinc site. In Brazil, the danger was evident in 2019, when heavy rains caused the collapse of a Vale dam in Brumadinho, killing 270 people and costing the company over $7 billion in liabilities. Mining companies have little choice but to invest in resilient infrastructure, adopt rigorous safety standards, and have emergency response systems in place.
Sea-level rise poses another equally serious challenge. Coastal mining hubs rely heavily on ports for exports. Western Australia, producing half the world’s lithium and among the top six producers for nickel, cobalt, and rare earths, is already experiencing sea-level rise three times the global average, with potential financial losses estimated at $350 billion by 2070 if no action is taken. Governments and companies will need to collaborate to modernize ports, enhance coastal defenses, and maintain the functionality of shipping routes amid changing environmental conditions.
Water scarcity and droughts are also transforming the industry. Nearly half of the world's copper, gold, iron ore, and zinc production is concentrated in regions already experiencing high water stress, such as the U.S. Southwest, the Andean Lithium Triangle, Australia, Southern Africa, India, China, Mexico, and the Middle East. By 2030, over a quarter of global mining output, valued at $50 billion, will face severe water stress. Chile, for example, the largest copper producer, will have all its production concentrated in extremely water-scarce areas by 2040. Ongoing droughts have already caused mines to cut back operations, increasing commodity prices worldwide. Some companies are already adapting. Rio Tinto and BHP Billiton have constructed water desalination plants in Chile. Others, such as Hecla Mining Company, have reduced freshwater use, increased recycling, and engaged with local communities to balance industrial needs with community welfare. Widespread adoption of these practices will be crucial to maintaining production while easing tensions over limited resources.
In colder regions, thawing permafrost is destabilizing infrastructure and creating various risks. Melting ground in Alaska, Siberia, and northern Canada has caused landslides, flooding, and extensive damage to mining facilities. However, the problem is not just logistical; thawing permafrost releases carbon and forces more cautious extraction. Addressing this requires strict environmental safeguards, investment in resilient infrastructure, and international collaboration, as permafrost degradation in one country has global implications.
Finally, rising temperatures and heat stress add another layer of risk. Extreme heat reduces labor productivity, increases safety hazards, and stresses equipment. Wildfires can destroy infrastructure and cut off critical transport routes. In 2023, wildfires across Quebec forced Canadian mines to shut down, disrupting production and supply networks. To reduce these risks, mining operations should invest in fire-resistant infrastructure, manage surrounding vegetation to lower fuel loads, install protective fire barriers, and develop comprehensive emergency response and evacuation plans to ensure resilience against increasingly frequent and intense wildfires.
Across these risks, the challenge that arises is navigating the overlap between mining companies’ strategies and broader public policy. While these companies can invest in desalination plants and renewable energy, without coherent policy frameworks and aligned investments, adaptation will stay fragmented. Development banks can help finance resilient operations in emerging economies, where a significant portion of the world’s mineral wealth is found. Trade agreements and critical minerals partnerships could also be part of the environmental risk management, in addition to market access.
Direct financing for resilient mining remains limited, and most adaptation is either self-funded by companies or supported indirectly through broader environmental sustainability programs. Leading companies have begun taking proactive steps, establishing cross-functional management teams, integrating risk assessments into project planning, investing in renewable energy, improving water management, and designing facilities to withstand extreme weather. Scientific modeling at regional and site levels is used to anticipate localized impacts, while emergency preparedness and contingency plans are becoming standard. Some firms, including Mitsubishi Materials Corp. and Rio Tinto Group, among others, are diversifying commodity portfolios, adopting technical innovations, and implementing waste recycling programs, creating both environmental and economic benefits.
Securing strategic minerals against intensifying natural risks is no longer just a business challenge; it must be a global policy priority. The energy transition cannot succeed on unstable foundations; the world needs smarter, safer, and fairer mines designed to withstand current and future environmental risks. Governments, development banks, and industry must coordinate to implement comprehensive strategies, varying from resilient infrastructure and sustainable resource management to risk-informed operations and socially responsible practices. Without these measures, supply disruptions could slow the energy transition and exacerbate social and environmental inequalities.
Caroline Arkalji is a Research Assistant for the Global Economics & Development and Energy & Climate Policy programs at ORF America.