A key question for Australian mining leaders has evolved from “how much water do we need?” to “how secure is our operational and social licence to access it?”. Water stewardship has moved beyond site-level compliance to become a regional strategic imperative. So what is being done?
The New Key Risk
The hierarchy of risks facing the mining sector has shifted dramatically in the past year.¹ While Australian mining executives previously ranked “climate change” as the absolute number one risk confronting the industry, the 2025 KPMG Risk Forecast reveals it has dropped to third place, displaced by immediate Financial and Commodity Price risks.² Similarly, “Community relations and social licence to operate” which is deeply tied to water and land stewardship has fallen precipitously from second down to ninth place.³
In practice, water is no longer just an environmental or regulatory consideration, it is becoming a direct constraint on production. In regions such as the Pilbara, pressure on groundwater reserves is already forcing operators to rethink long-term water sourcing strategies.
Operational Continuity in Climate Volatility
Despite this reprioritisation, water security and resilience to physical climate risks remain paramount long-term challenges.**⁴ The World Economic Forum continues to rank extreme weather events as the most severe global risk over the next 10 years, highlighting the persistent threat of severe droughts, cyclones, and flooding disrupting mining operations and drastically reducing productivity.⁵
This is driving a shift toward independent and more resilient water systems, including large-scale desalination and water recycling infrastructure, to reduce reliance on increasingly constrained natural sources.
The “Beyond-Compliance” Approach
To maintain their social licence and meet stringent environmental, social, and governance (ESG) expectations, miners must take a “beyond compliance” approach.⁶ The regulatory environment is evolving rapidly with frameworks like the Taskforce on Nature-related Financial Disclosures (TNFD), which requires companies to rigorously report on how they manage nature-related risks.⁷ Addressing these issues involves integrating comprehensive nature-based solutions, halting biodiversity loss, and proactively engaging with First Nations rightsholders to ensure the sustainable management of shared resources like water and land.⁸
Conclusion
For many operations, securing long-term water supply is becoming as critical as securing energy, a fundamental requirement for sustaining production.
Balancing industrial demand with community expectations is no longer optional. Integrated strategies that include independent water sources, such as desalination, alongside advanced digital monitoring are now essential components of long-term asset resilience.
References
- KPMG, Australian Mining Risk Forecast 2025, 2025.
- KPMG, 2025.
- KPMG, 2025.
- KPMG, 2025.
- KPMG, 2025.
- KPMG, Australian Mining Risk Forecast 2024, 2024.
- KPMG, 2024.
- Deloitte, Tracking the trends 2025, 2025; KPMG, 2024.
