Risk in Mining: What Actually Holds Up When Things Go Wrong?

A focused discussion on how risk is understood and managed across the mining sector, exploring common blind spots, gaps between perceived and real protection, and their impact on valuation and continuity. The session will also examine how strong risk frameworks can act as a value driver and what investors should be looking for today.

Featuring:

• Raul Munoz, Marsh​
• Robert Kovacs, Withers 

Guest Host: 

Lyndsay Malchuk, Apaton Media.

Recorded live at 121 Mining Investment London, May 2026.

Transcript

SPEAKER_00 0:00

You're listening to the Assay Podcast, where mining meets capital, powered by one-to-one mining investment. Today we are coming live from our event in London. Please note, this podcast is for information only and isn't financial advice or recommendation to invest. As always, the views you'll hear are those of the speakers.

SPEAKER_01 0:17

Welcome to this special fireside conversation from the floor of the One-to-One Mining Investment Conference here in London. I'm Lindsay Melchak with Appeton Media, your guest host. Now, this may be one of the most important conversations happening in mining right now. Because while this industry is obsessed with discovery, with production growth, and the next major jurisdiction, some of the biggest threats to shareholders' value are the ones companies still aren't talking enough about. Geopolitical instability, weak legal structuring, human rights exposure, insurance gaps, community conflict, regulatory pressure, the kind of risks that don't just delay projects, it can wipe out valuations overnight. Joining me today are two people operating at the highest levels of that conversation. First, Raul Munoz, North American industry leader for mining and natural resources at Marsh. Raul works directly with mining companies navigating operational disruption, geopolitical exposure, insurance strategy, and financial resilience across global jurisdictions. He sees where companies are vulnerable long before the market does, and where leadership teams often confuse having coverage with actually being protected. Raul brings a frontline perspective on the risk mining companies can no longer afford to underestimate. And alongside him is Dr. Robert Kovacs from Withers, an internationally recognized disputes lawyer specializing in investment protection, geopolitical disputes, and business and human rights. Robert advises mining companies operating in some of the world's most politically and legally complex environments, helping them navigate everything from treaty protection to community impact. His work reflects a major shift happening across mining right now. Legal risk is no longer just about contracts, it's about structure, jurisdiction, political pressure, and whether companies are truly prepared for the environments they operate in. Let's get right into it. So great to sit with you. There is so much going on in this space right now and so little talked about. So I really want to bring a lot of this to the forefront. First off, thank you both. I really appreciate it. Right out of the gate here. Yeah, absolutely. Right out of the gate here, Raul, I'm going to actually address this right to you.

SPEAKER_02 2:37

Okay.

SPEAKER_01 2:38

From your vantage point, we're going to kick it off right here. What you're seeing, what are you seeing right now across different jurisdictions, different commodities, operators, insurance, capital projects? I mean, what are you seeing right now, boots on the ground?

SPEAKER_02 2:53

Boots on the ground. That's a actually a very good place to start. Um, one of the differences, I think, um, that uh that we make and that we have when we talk to clients in the mining space is that we actually have boots on the ground when we visit and talk to them. That's a key point. And a lot of times you're sitting and you can evaluate a project, you can look at a balance sheet, you can look at a million different things, but it's when you're actually on site with the boots on the ground, actually understanding what can go wrong, what is the culture of the company, what uh you know, what are the things that that that are really well managed, and what are the things that that aren't well managed? Um, there's a significant amount of uh MA activity, as we know currently. Yeah. And uh interestingly enough, a lot of the conversations around uh MA with acquiring companies go into resilience and actually operational resilience resulting from the basic understanding of what's happening, boots on the ground. So that's spot on.

SPEAKER_01 3:54

Spot on. Is there uh an area where it concerns you the most right now that you believe the mining industry just is really underestimating?

SPEAKER_02 4:01

Uh commodity valuation.

SPEAKER_01 4:03

Tell me more about that, unpack it.

SPEAKER_02 4:05

I I think everyone's uh excited. Uh, we see commodities spike uh to levels that we haven't seen in many, many years and probably in in many areas unprecedented. Um, what sometimes it's it's understood what could be an upside on the financial side for companies could be a downside on the risk. Okay. Um when you have commodity prices at uh the levels that we're seeing today, risk significantly uh expands. Uh whether it's uh basic coverage is on the insurance side, which we see a lot, but also on you know what it means for a company to not be able to operate because of X or Y reason.

SPEAKER_01 4:44

Yeah. Well, Robert, I'm gonna bring you into the conversation here because we're hearing more and more about geopolitical instability. How exposed do you believe mining companies are today compared to what management teams and investors actually believe right now?

SPEAKER_03 4:58

Certainly. I mean, and that's a very broad question. About um, you know, and it's really jurisdictional specific. Okay. So where mining companies will be operating, they'll be exposed to different levels of you know geopolitical risk. But what we're seeing is there's sort of been a shift, and I think mining companies are starting to realize this from what was traditionally, I guess, the some more developing countries, the more high-risk jurisdictions, now that same level of regulatory and geopolitical risk we're seeing in more developed countries and what was seen as safer countries. So that's something that we're noticing, and that's resulting in potentially more uh more risks and potentially more sort of yeah, from my perspective, litigation as well.

SPEAKER_01 5:40

You know, pardon me, we're seeing that, like you just said, in jurisdictions where you would think that it was way more stable or that it has been stable, but now there's so much uncertainty anywhere across the world that you have to actually really start looking at risk not as a box box to check, not as coverage, not as anything that it's not just a box anymore. This is the topic that needs to happen. So, Roel, let's flip this back to you. One of the biggest misconceptions in this industry is the belief that having insurance automatically means you're protected. Okay, so there's the laugh. I mean, that says it all right there. Where are you seeing the biggest disconnect right now between what companies think is covered and what would actually hold during a real crisis?

SPEAKER_02 6:28

Sure. Um I'd like to take maybe a little bit of a step back uh to your question. And I think that historically, uh, and I think a lot of us personally think of insurance as a as a procurement, as something that you have to purchase as opposed to an edge or something that's going to enhance your resilience strategy. Um and I think that's uh the biggest mind shift that we see good operators is understanding that insurance is a last line of defense once a lot of things go wrong. Um and like many contracts, insurance is a legal contract and you don't actually test it until something happens. Until something happens. Um what uh in in you know there's there's horror cases where you see think companies thinking that uh that there's coverage for specific um type of losses for specific type of equipment. Uh and until you actually understand what the loss means to the contract in the specific event, okay. You don't actually know.

SPEAKER_01 7:29

Can you give us an example?

SPEAKER_02 7:30

Yeah. Uh I mean, underground losses, underground mining losses are are a very clear, uh, clear example of that. Um, you know, and insurance, uh, an insurance policy is is a contract, and contracts have a lot of exceptions. Uh until you actually know what those exceptions are uh when it comes to a specific type of loss, uh you could be exposed. Beyond that, uh, I think that's something that that that is sometimes not widely understood is the gap of recovery versus uh what you expect to uh to be covered for. And by that I mean uh I mean insurance companies um set relatively significantly high deductibles and retentions sub-limits. And so when you look at the aggregation, we recently launched a report where we looked at the last 20 years of data on losses and close to $15 billion loss of data. And what the data shows is that uh for every dollar that you invest in in your insurance um protection, you only recover 50% of that. Wow. When you look at you know the significant levels of retention, the exceptions, uh sublimits, uh it becomes and that's not a that's not uh um an issue in and of itself. There's there's this lack of recovery in every industry, and this is something that is structurally uh how insurance companies typically transfer risk. Uh, but that's you know, back to your point about what is sometimes widely misunderstood is those levels of uh protection.

SPEAKER_01 9:06

Well, I see you agreeing over there. What do you see on the legal side of that?

SPEAKER_03 9:09

Well, I mean, from the insurance perspective, I just thought it was a very interesting point that it's it's that um at that level. Um, I mean, from you know my perspective as an international lawyer, we're doing a lot of advice for mining companies on how to basically use sort of a slightly different tool, but uh targeting you know those similar types of risks. But in this case, you know, geopolitical risks. Right. Um so often it's sort of you know um talked about in the same uh conversation as um you know political risk insurance, but this is either an add-on or an additional element to that. And so what I'm talking about is specifically uh investment treaty protections. So these are investment treaties that are signed between two states. But what they do is they give investors the ability to bring a claim if the government of the state that you're investing in, and it could be any level of government, takes a measure that has a negative impact on the investment that is unlawful and it's unlawful under the minimum standards of protection within that treaty language. And we're seeing, and we're giving advice to a lot of mining companies on how to then structure their investments. So if something does go wrong, if a political interference in that investment um takes place, regulatory change that's done in an unlawful and arbitrary right way, that then can lead to potentially a claim and then recovery from the state directly. So it's another form of basically insulating against risk.

SPEAKER_01 10:35

So you have two different perspectives from two different kinds of protections. So you're you're hearing what he's saying about the treaty. How is that being incorporated geopolitically? There's so much uncertainty. Do you see a lot more of that in your coverage now?

SPEAKER_02 10:48

Yeah, I mean, and that I think that's that's the it an interesting point is we're we like to shift the conversation from the word insurance to the word risk transfer. And I think to uh you know, to your point, uh, I I think that this is exactly what this is. I I don't think that there is a um one size fits all solution for every company for every specific case. And it's really what are those things that you're incorporating within your plans uh to um you know to be able to have a proper, you know, well-developed risk management approach to it.

SPEAKER_03 11:19

So from Yeah, and I was gonna say, yeah, they're complementary. I mean, they're not mutually exclusive. You have one, you have the other. And then from our perspective, it's about structuring it when yours is yeah, getting the right products in place.

SPEAKER_01 11:31

You know, there is just uh you could dive into this for so long and go so deep. This is a rabbit hole for sure. Robert, from the legal side, are companies overestimating the strength, the protection they have in place when operating internationally, you think?

SPEAKER_03 11:46

Obviously, every company is um is going to be um at a different level as well. And so, you know, you have the very sophisticated, you know, large mining companies will be operating at one level, and then the smaller, you know, um mining companies might be operating um at a different level in terms of the risks that they're anticipating, as well as what you know appetite they have for risks. Um so difficult to say what, you know, and the lawyer's answer, it always depends um on whether they're you know underestimating. But going back, I think, to my first point, um, I think there is a bit of an underestimation of the risks in particular jurisdictions.

SPEAKER_01 12:20

Okay, yeah.

SPEAKER_03 12:21

That they were thinking were safe jurisdictions. Um, they didn't need to worry about political interference in the sort of traditional sense in some of you know the lesser developing countries that were you know traditional mining, um, you know, places with it um had a big mining culture. Um, and I think that is still being underestimated, although mining companies are starting to realize that what was a safe jurisdiction historically may not be as you know safe as it traditionally was.

SPEAKER_01 12:50

Yeah, I'm gonna flip that question over to you too, because on the risk side, I mean, are you seeing any of those same things?

SPEAKER_02 12:56

Yeah, I mean, I I think that one of the really interesting um areas of of mining is that it's intrinsically international. Okay. Uh we have companies headquartered in Perth, in Toronto, in London that are operating in West Africa, in Australia, in the US, right? So I think again, just going back to the notion of you know, one size does not fit every single case, particularly when it comes to new developments, right? We're seeing uh a lot of projects right now uh you know being built across the world, whether it's you know, West Africa, particularly in in North America. And and and I think to your point about you know what was usually thought as uh you know traditionally safer places to operate, may that may not always be the case.

SPEAKER_01 13:44

So it clearly isn't, because there's just so much instability wherever you look right now. Now, I think a lot of companies also rural, they still treat risk management as a compliance function. Okay, they don't look at it as like a cost center. So when you look at say operational resilience or financing, insurability, uh, even continuity, this really becomes a valuation conversation, doesn't it? So can you expand a little bit more on maybe an example of something like this?

SPEAKER_02 14:16

Yeah, I mean, uh it it's it's interesting that that you use the the word valuation because that's that's exactly what this is, right? Uh you can you can look at a project and you can look at uh at you know a black and white page with numbers and and and and it's one thing. But I think especially when it comes to uh when it comes to development and and and and and new uh new new new new projects that are that are going up, not properly understanding, you know, well, for example, some of the supply chain vulnerabilities that can affect uh you know how uh you know how the project is is built. Affecting them. Are affecting them, especially right now. I mean, we're this is uh I think it it'd be an understatement to say that uh this is not something that's in everybody's uh you know top of mind right now. And so when it comes to to a mining project, it's it's not just about looking at you know how well uh advanced your engineering is, how how well capitalized you are for you know your existing capix, but also you know, what are those you know different issues that can throw everything, uh throw a wrench on everything.

SPEAKER_01 15:23

Right. You know, Robert, human rights and community impact are no longer side conversations in mining either. How dramatically has the legal and reputational landscape shifted around this issue over the last few years?

SPEAKER_03 15:36

Certainly, and you know, you're seeing mining companies really pay attention to this because yeah, they've had to from a range of reasons, I'd say. I mean, there's been sort of litigation risk that you've seen from transnational torts from affected communities, bringing claims in the UK courts, for example. Um, you've got the reputational risks that's associated with that, um, as well as you know, I'm thinking of um destruction of indigenous communities, yeah, heritage sites from a few years ago for um a large major mining company that ended up in the CEO having to resign. So you're seeing this really play out at every level, I think, um, both at the top, but also at the very sort of community level as well. I mean, we acted and advised mining companies in Africa that had issues with their local communities that then resulted in potential litigation, ultimately through a resolution with a grievance mechanism on the ground with the local communities, um, was something that you know managed to, you know, in terms of the value, you manage to then keep the mine operating, um, uh, yeah, remedy those impacts, and then you know find a solution that made the mine operable, which you know it potentially could have lost most of its value. So it's definitely a um a key area that I think that a lot of you know mining companies have to have grapple with, both also from the regulation perspective as well. You've got now supply chain due diligence directives in a number of countries, you've got modern slavery um requirements. So that is something that they've you know had to grapple with. Um, probably you know, since the UN Guiding Principles on Business and Human Rights came out in 2011, that conversation has shifted. So now that element of looking at what impacts you know the businesses have on human rights is really part of that risk management and has to be operational at every level. Right.

SPEAKER_01 17:33

You know, I want to add you into this conversation because community engagement is massive. It is, if you don't have that backing with the community, you're not gonna go anywhere fast. On the risk management side, how do you deal with that?

unknown 17:46

Yeah.

SPEAKER_02 17:47

Um, I think at a very high level, uh, one of the things that that I notice is that even good operators are not very good about telling their story.

SPEAKER_01 17:57

No, they're not.

SPEAKER_02 17:59

And and and I think it's it's a shame. I mean, to your point, I think that you know the mining sector has been grappling with this since the beginning of a modern uh mining sector. And and and I think that a lot of times uh there's a gap in what people know and and what actually happens on uh going back to your original question in Boots on the ground, right? This is things that we see. We see operators in Peru, for example, partnering with local communities in developing uh you know their their abilities, their business, uh different business plans to, for instance, be some of the main uh trucking companies uh led by uh indigenous communities. Uh we see uh community engagement across every level of site operations that sometimes are not told to everyone and properly. And I think that for the last five, six years when we started to see a lot of the sustained companies uh issue sustainability reports, huge, um, which has been great. Um, I I think that again, that those stories are are not broadcasted enough.

SPEAKER_01 19:08

Absolutely. I couldn't agree more with that. Now, when I sit on the side of the table as an investor, there's a lot of things that come up about investor conf confidence. And one of the things that we spoke about off-camera is when there is a failure, when there is a something that happens with the the talent there, when something happens, often an investor will go, okay, well, now you're not functioning and now we're losing money. So is that hitting my portfolio? So we're gonna start with you on this side. On the investor confidence, you know, what are you seeing for investor confidence on your side?

SPEAKER_03 19:43

Yeah, so we you know, we'll often be engaged when an issue comes up, and it could be a major sort of bet the company type issue. Um, and so um obviously investor confidence potentially has hit. Sometimes it's before it's public as well. Um, and you have to really be managing it very carefully. Um and we've got a crisis management team for those sorts of situations. Um, often you know it'll involve an investigation to work out what happened, what's gone on. I mean, obviously every issue is going to have its you know different um origins and ramifications for the business. Um, but it's about obviously getting on the front foot to making sure that it can be mitigated, whatever that risk is, um, having a good PR strategy is vital. Um, so these are some of the things that we then, you know, we have a REPMAN team that will come in and assist on this. And that we've been advising one of the major mining companies on that side of things recently. So those are the types of things. And then if you're in sort of a potentially um a dispute, let's say, whether it's with local communities, whether it's with the government, then yeah, you sort of really need to be on that uh yeah, litigation perspective and thinking everything, okay, how is this going to play out in a potential situation?

SPEAKER_01 20:59

Okay. Yeah. What about on the risk side?

SPEAKER_02 21:01

Uh, I think unlike you, we typically get involved when there is no issue, right? And I think the moment you bring in uh a law firm, you know that uh there's there's something going on. Not always. We can we can be involved to to avoid these players. Uh and and you know, from from our perspective, we we we try to we try to avoid those things. And and you know, some of the things that we see on on the risk side and and what good operators do is is is have you know proper business continuity plans, right? Things will go wrong. Yeah, but no matter what, there's always something that that's going to go wrong. It's how do you deal with it? How does a company, how is a company uh prepared to do it? And I think from the investor side, what makes the biggest difference uh when you have a loss is is not how bad the loss is, is how quickly you can recover from it. And it all comes down to to preparation, whether it's business continuity plan, whether it's proper Proper uh mitigation strategies, uh, whether it's proper crisis management, whether it's proper, you know, partner with companies that are going to be there uh to look at uh uh that understand your company uh and and and help you through uh through the crisis. And so I think it's it's a different um a bit of a different perspective.

SPEAKER_01 22:19

Yeah, absolutely. I'm gonna hold this here with you for more a little bit more. When sophisticated investors assess mining companies today, what are the strongest signals that a management team truly understands their risk?

SPEAKER_02 22:32

Um I think when you open a conversation about risk and the discussion immediately goes to insurance, I think that there's there's a bit of a gap. Insurance should be the last line of defense when it comes to an issue. Uh, and you want to avoid getting to an insurance conversation. And I think that for companies that look at risk from a a proper edge of what's gonna get them ahead of their competitors is is looking at at risk from that perspective and risk transfer only as a component of the broader uh ecosystem uh of strategies, much like the treaties that uh that that you were mentioning before.

SPEAKER_01 23:18

Well, I'm gonna flip over. Robert, we're gonna bring you back in here. Red flags. What would be something that you would see as a red flag on the investor side as well as on the company side?

SPEAKER_03 23:27

I mean, I guess not having the right policies in place is definitely a red flag. Um, I mean, yeah, you obviously look at the the types of jurisdictions and um we often do um sort of you know risk analyses, um, but looking also at um the levels of yeah, sanction compliance, AML compliance, all of that needs to be you know very well integrated all the way along the business, um, as well as having you know uh the right sort of audit trails and supply chain due diligence, all of that is the type of stuff from the legal perspective that we'll be looking at.

SPEAKER_01 24:03

Okay, perfect. And on the risk side?

SPEAKER_02 24:06

I think on the risk side, particularly when it comes to an operational perspective, uh sometimes we tend to think of you know big money losses as a big catastrophes, right? Massive tailings, dam failures, earthquakes, big collapses. But the reality is though, uh what uh it's that's death by a thousand cuts. It's it's those little small issues that happen in production on a day-to-day basis is losing six hours, is losing 12 hours because of lack of proper maintenance, because uh there is no um no robust uh mitigation strategies or or or proper human element uh uh processes in place. To me, that's a big red flag.

SPEAKER_01 24:49

Okay. Final question for both of you. What should investors specifically be asking management teams right now around geopolitical exposure, around legal structuring, human rights risks, and perhaps they're just not asking enough of yet? We'll start with you, Ro.

SPEAKER_02 25:08

The toughest question.

SPEAKER_01 25:10

Save the best for last.

SPEAKER_02 25:13

Um I I think it's it's it's um the the question uh or this the questions that that I think investors should be asking is is is not how uh you're going to deal with a loss. Um but it's it's it's what are those what are those pre-existing conditions that are going to lead to a a loss. Um and I think that uh you know to our to your point earlier about not uh our our point earlier that not all one size fits all is is really what are the are we operating in in Panama or are we operating in the Ivory Coast? Uh and and and sometimes the answer may not be as as simple as making assumptions. So to me that's that's that's the biggest thing.

SPEAKER_03 26:01

All right. It's it's a it's a it's a very big question. I mean, there's not one specific question, but it's looking at the way the business is being run at every level and how these types of risks are being uh mitigated and and actions are being taken to sort of incorporate you know measures that will try to avoid these risks at every level. So that's including having the right policies in place, um, having that um the right education at every level as well, because what we've seen is you know, at the operational level is often critical. It's that they're the ones that are um implementing what management is doing and sort of trying to see if that is being done in the best possible way. Um that's one aspect. And then the other aspect is um having the right um structures in place from uh yeah, where the business is in making the investment so that you can get, you know, for example, those investment treaty protections.

SPEAKER_01 26:56

You know what, guys, this has been such a great conversation. I would love to keep it going. So come back soon. But for now, we'll put a pin in it, we'll circle back all the perfect sayings, and thank you again for joining me.

SPEAKER_03 27:08

Thank you. Thank you very much. It's been a pleasure.

SPEAKER_01 27:09

Well, I think what today's conversation makes incredibly clear is that the future winners in mining won't just be determined by grade, by scale, or jurisdiction. They'll be determined by preparedness. Because in a world shaped by geopolitical instability, supply chain pressure, activist scrutiny, climate disruption, and rising stakeholder expectations, risk is no longer sitting on the sidelines of mining strategy. It's in the strategy. It is the strategy, and it's part of the discussion that investors need to be including. What is covered, how it's covered, and who takes the hit if it's not. So grateful to Ruhl and to Dr. Robert. Thank you so much. I'm Lindsay Melchick, your guest host, and we will see you next time.

SPEAKER_00 27:51

Thanks for listening to the Assay Podcast, where mining meets capital, powered by one to one mining investment. Subscribe for new episodes and visit theassay.com to stay close to the conversations shaping global mining and investment.