Resource Depletion Emerges as Major Risk for Mining Sector, Threatening Supply of Critical Minerals

Global Mining Industry – The mining sector is facing a significant challenge as resource and reserve depletion has emerged as the fourth top risk in 2025, according to a recent report by EY. The report, which surveyed 353 senior mining and metals leaders globally, highlights the growing concern over the ability of mining companies to meet soaring demand for critical minerals due to declining ore grades, rising exploration costs, and a lack of new discoveries. This issue has become so significant that it is a new entry in the top 10 risks and opportunities for mining and metals companies in 2025.

The report indicates that mining companies must develop better ways to extract and optimize critical minerals and metals while protecting the environment. This challenge is driven by a combination of factors.

• Declining ore grades are increasing the costs of extraction. High-grade resources are nearing exhaustion, requiring greater expenditure and energy to access metals from new projects with lower ore grades. Most of the planned global copper greenfield projects have a grade of 0.5% or lower, compared with an average 0.8% grade in 2010.
• Exploration budgets are up, but so are costs, and fewer discoveries are being made. Capital raising is down 4% year-over-year in 2023, hindering mining activity. The last two decades have seen few major new copper discoveries, while the cost of exploration has soared. The estimated cost of copper exploration was US$91/tonne in 2011, increasing to US$802/tonne in 2020.
• Long lead times on projects also hinder the ability of miners to replace or increase reserves. Average lead times are about 18 years for mines starting operations in 2020–23, compared to about 13 years for mines that commenced 15 years ago. Permitting processes can be challenging and require substantial stakeholder negotiation, lengthening mine development times.

“Mining companies must continue to develop better ways to extract and optimize critical minerals and metals to meet soaring demand, while also protecting our environment,” the report states.

Miners are considering a mix of solutions to address the issue of resource depletion. These include investing in technologies that can advance exploration and improve productivity. For example, leaching technology can recover more metals from lower ores than traditional processes. Rio Tinto’s Nuton technology, for instance, can achieve recovery rates of up to 85%. Companies are also exploring unconventional mining frontiers such as extracting resources from asteroids and exploring critical minerals embedded in the ocean, but the economic feasibility and environmental impact of these methods remain uncertain.

The report also notes that a supply shortfall may occur if there isn’t sufficient investment in exploration and mine development. To achieve net-zero goals, the world will need at least 41 million tonnes of copper per year by 2050, which would require building around 40 new copper mines the size of Quellaveco. However, there is not a large uptick in exploration expenditure.

“The issue is exacerbated by declining ore grades, which is increasing the cost of extraction,” the report explains.

Historically, exploration efforts have focused on gold, but there has been a recent shift, with copper, lithium, and nickel exploration budgets seeing increases in 2023.

Technically, the report highlights that the number of major copper discoveries has declined from 75 between 2004 and 2013, to just 14 from 2014 to 2023. This decline in discoveries, coupled with rising costs and lead times, poses a significant threat to the future supply of critical minerals.