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Member, Beacon International Group, Ltd.
Mining companies should review their insurance and risk management programs in light of growing infrastructure and supply chain considerations, and pressure from indigenous populations to gain greater benefit from their natural resources, according to a Willis Group Holdings P.L.C. report.
“Infrastructure and the supply chain are becoming increasingly important factors in the success or failure of projects,” the Willis report said. At the same time, social unrest has resulted from indigenous populations' dissatisfaction with financial rewards offered by mining firms.
Willis' spring 2013 Mining Market Review concludes that the trading and financing environment in the mining industry is changing so quickly that decisions mining companies made on issues such as uninsured versus insured risks, risk retention levels and types of coverage purchased may no longer be valid.
“These tradeoffs require careful consideration, given that mining companies and insurers often have differing views on the level of risk and its pricing,” the Willis report said. “This is particularly the case for political risk insurance, as well as natural catastrophe and business interruption coverage for property insurance.”
The report from London-based Willis also concludes that insurers must be more adaptable and innovative in the coverage they offer mining firms.
The Mining Market Review focuses on what Willis said were “seven of the leading, closely interwoven issues” currently confronting the mining industry:
• Resource nationalism
• Social license to operate
• New markets
• Costs
• Infrastructure
• Supply chains
• Skills shortages
The Equal Employment Opportunity Commission has reached a $40,000 settlement with mining firm Jim Walter Resources, which allegedly continuously assigned a worker to conditions that would have harmed his hearing aids, the agency said Friday.