- Treasury management for mining
- Key risks and opportunities in mining 2026
At the RIU mining conference in Perth last week, one of the key sentiments was that the industry were equally excited and nervous for 2026.
Excited: we've all seen the current all-time commodity prices, which is an opportunity to capitalise on. It seems like the IPO market is heating up. And mining companies are now in AI execution mode, implementing new technologies that have genuine ability to relieve cost pressures.
Nervous: not only do those high prices signal volatility, but amidst these highs are pressures to perform alongside persistent cost and productivity problems. Changing geopolitical landscapes was also a highly contentious point.
The combination of surging demand and push towards digital creates opportunity, but is occurring concurrently alongside increasing operational complexity and geopolitical tensions.
Besides learning about the pain points facing the industry at the conference, I also endeavoured to explain how treasury management can be a part of the solution in addressing some of the key risks and opportunities facing the industry today.
Digger deeper, and paying more
Achieving reliable output has become increasingly difficult, with one of the key challenges being degradation of outputs. The average grade of copper mined worldwide has fallen 40% since 1991 and this geological reality creates unpredictable throughput.
One of the key complexities that results from this is the requirement for deeper mines to find quality metals and minerals, and specialist expertise to orchestrate the exercise. This translates to a higher cost impact, to both extend mining operations but hire talent to do so. Cost overruns have also become a risk that cascade through production variability.
The treasury solution: finance functions must shift from reactive cash management to proactive scenario planning. With unified cash visibility across all bank accounts and entities, treasury teams can model cash flow impacts of production variability and the cash impact in real-time to ascertain liquidity buffers.
Runway created through investment of idle cash could provide the financial flexibility to hire specialists who can address the technical challenges of deeper, more complex mining operations.
Geopolitical dynamics that are hitting the bottom line
The global economy is experiencing a fundamental shift in mineral demand. The convergence of the energy transition, explosive AI and data center growth, and the strategic race for semiconductor supremacy has created critical supply gaps with far-reaching security and economic implications.
China's dominance in rare earth processing, the U.S. push to increase domestic mineral production, and the EU's Critical Raw Materials Act all signal that nations are treating mineral resources as strategic assets, deploying tariffs and export restrictions as geopolitical tools to secure control over the full value chain.
These dynamics are creating currency volatility and cross-border payment complexity.
The treasury solution: multi-currency accounts and real-time FX management capabilities are critical for managing geopolitical currency risk. Treasury teams need platforms that consolidate visibility across currencies while enabling fast execution of FX conversions at competitive rates. The visibility reduces both operational burden and proper FX strategy can protect margins from sudden swings.
Every dollar needs to work a little bit harder
Despite cost pressures, miners have boosted capital expenditure for three consecutive years while dialling back shareholder payouts. This is a clear shift to a longer term growth mindset. Higher interest rates and capital intensity mean the sector's weighted average cost of capital (WACC) is now 8-10%, and as a result projects are harder to fund or require greater certainty on the return. As a result, there's stronger pressure to improve productivity, reduce costs, partner, or use alternative funding structures.
The treasury management solution: real-time cash visibility and intelligent cash management tools allow finance functions to dynamically assess future investment opportunities and act quickly when the right opportunity comes up. With consolidated views of cash across all entities automated, teams can optimise working capital, identify funding needs earlier, and make faster capital allocation decisions.
How the conference ended…
By the end of the three days, the understanding of treasury management had shifted for a couple of these mining players. Treasury used to be the back office, but the companies navigating new operational complexities, FX exposure, and capital decisions are using treasury as a solution to make more efficient decisions in increasingly volatile environments.
About Primary
Primary provides modern treasury management solutions for complete cash visibility, idle cash optimisation, and FX risk management - all in one platform.
