Nearly half of global mining and metals executives rank licence to operate as the biggest risk to their business for the second year in a row, as stakeholder pressure builds and the ethical investing tide swells.

This is according to the latest EY business risk and opportunities survey, in which 44% of executives who participated put licence to operate at the top of the yearly list.

EY explains that extended periods of elections and resultant government changes has brought uncertainty to the political environment, which has created volatility in the commodity markets.

In addition, the sector is facing greater scrutiny from end-consumers, demanding a transparent ethical supply chain, as well as a lower carbon footprint. Shareholder activists are driving many miners, particularly those with coal assets, to reshape their portfolios by either reconfiguring existing operations or executing divestments.

"Companies must show how they're working towards sustainable and inclusive growth to redefine the sector's image as a responsible source of the world's minerals. Demonstrating these values is also key to addressing growing workforce challenges," says EY Canada mining and metals coleader Jeff Swinoga.

Future of workforce rose from seventh place last year, to second place in the risk ranking, owing to increasing demand for, and difficulty attracting, the digital and data-related skills needed to support the future of mining.

"Every mining and metals company is in the process of defining or executing on their own version of transformation," comments EY Canada mining and metals coleader Theo Yameogo.

"Digital effectiveness isn't about pushing the boundaries of innovation, which are far more complex to achieve by a single company. It's about raising the visibility and performance of your business by embracing available technologies. This transformation requires adequate roadmap and execution plans, which the industry tends to overlook or underestimate."

Digital and data optimisation fell one place, but held its position in the top three business risks cited by miners as they grapple with how to unlock the most value from investments.

"Machine learning models and artificial intelligence can surface incredible insights for mining and metals players," says Yameogo.

"Ultimately, AI [artificial intelligence] uniquely creates or improves a company's competitive advantage by churning multi-source data into valuable business levers. It's a pervasive technology nowadays that the mining and metals sector should start adopting."

The 2020 ranking also includes four new entrants gathering attention from executives: reducing carbon footprint (4), high impact risks (5), replacement of production (8) and innovation (9). Together, these challenges tell a story of a sector focused on redefining its future.