By: The northern miner

Mining companies could see earnings drop by as much as 25% over five years due to nature degradation, Barclays said in a new report.

The bank’s stress test, published in Navigating Nature Risk: Applying the TNFD’s LEAP Framework, analysed 250 mines linked to 30 companies and about 9,000 European power facilities. It found that transition risks such as higher water prices, stricter pollution rules, expansion of protected areas and increased minerals recycling pose the greatest threat to miners.

Power companies face potential earnings declines of around 10%, mainly due to physical risks such as droughts and floods, Barclays also said.

Adopting nature-positive practices could unlock over $430 billion in cost savings and new revenue across the mining and metals value chain by 2030, according to World Economic Forum calculations. Yet nearly three-quarters of mining assets overlap with sensitive locations, most commonly areas of high physical water risk. Copper mines, often located in water-stressed countries such as Australia, South Africa and Chile, were the most exposed.

Biodiversity loss and ecosystem degradation are emerging as systemic financial risks, Barclays said. “These risks are increasingly materialising across our clients’ operations,” Marie Freier, head of sustainability, said in the report.

While data gaps limit analysis, enough information is available for action, Barclays says. A biodiversity financing shortfall, which is estimated at $700 billion a year, gives financial institutions a significant commercial opportunity to provide the necessary capital, the report adds.