The dramatic changes that have impacted the mining sector over the past several years, including high commodity prices, high demand for power and processing equipment, falling industrial demand for raw material, limited access to capital and the re-evaluation of corporate strategies, means that companies are placing more of an emphasis on the need for effective risk management. The good news, however, is that most mining companies are ahead of the game.
Those in the industry are inherently willing to take big risks for big gains and are proactively seeking advice to do so safely, but important investment decisions are being made in an environment that is often unstable with returns that are increasingly uncertain. This uncertainty can be viewed as both a threat and an opportunity, however, so it is important to put an effective risk management strategy in place in order to ensure success.
RSA Insurance suggests that developing strong partnerships with insurance brokers and carriers can strengthen preparedness, and offers the following tips for managing risk:
As the mining industry becomes more globalized, working with an international insurance partner will help ensure risks are managed effectively and appropriately for various jurisdictions.
*Michael Marino is Assistant Vice President, Energy at RSA Insurance. RSA is an established global insurer with employees in over 30 countries and compliant operations in more than 150 countries.