Geopolitical disruption: The unpredictable risk that demands strategic resilience

In the mining sector, risk is a constant companion. Yet few risks are as volatile, far-reaching, and difficult to control as geopolitical disruption. From regulatory upheaval to civil unrest, operating in politically unstable regions can trigger swift and severe consequences - compromising safety, disrupting supply chains, and undermining social licence.

Why geopolitics is rising on the risk radar

According to BDO’s 2025 Global Risk Landscape Report, geopolitical disruption has surged into the top five risks facing the sector, a significant shift from previous years. This reflects the growing complexity of operating in jurisdictions with fragile governance, shifting alliances, and rising nationalism. Even in traditionally stable jurisdictions like Australia, evolving political priorities and fiscal policies are introducing new challenges for mining companies.

In the Asia-Pacific region, 84 per cent of executives believe the risk landscape is now more defined by crisis than ever before. Key threats include:

• Sudden changes in fiscal regimes and royalty structures
• Nationalisation and resource nationalism
• Civil unrest and community opposition
• Regulatory inconsistency and opaque permitting processes.

These risks are amplified in mining, where long-term investments and infrastructure are vulnerable to abrupt policy shifts.

The cost of disruption

Geopolitical instability doesn’t just disrupt operations; it can derail entire projects. Delays in permitting, forced shutdowns, and reputational damage can lead to millions in lost revenue and long-term strategic setbacks.

As previously discussed, geopolitical risk has shifted from a peripheral concern to a central strategic issue. To remain resilient, mining companies must embed geopolitical intelligence into their risk frameworks and scenario planning, enabling swift and decisive responses when conditions change.

Queensland’s royalty framework: a case in point

In Queensland, recent updates to the Mineral Resources (Royalty) Regulation 2025 have reinforced the importance of fiscal stability and transparency. While the core royalty formulas remain unchanged, the regulation introduces clarifications around lodgement timing, exemptions, and payment structures. Notably:

• Royalties are calculated based on the average price per tonne of coal sold, with tiered rates applying above thresholds of $100 and $150 
• The Queensland coal and minerals sector contributed over $120 billion to the state’s economy in FY 2023–24.

These figures underscore the sector’s economic significance and the potential impact of policy changes on investment confidence and operational planning.

Asia-Pacific context

The Asia-Pacific whitepaper accompanying BDO’s 2025 Global Risk Landscape Report highlights the region’s unique challenges:

• Regulatory burdens - are increasing, particularly in Australia and Southeast Asia
• Geopolitical tensions - are reshaping supply chain strategies
• Cyber and fraud risks - are rising, often intertwined with political instability.

Interestingly, while risk velocity remains high, there is cautious optimism. Many businesses across the region are embracing AI and digital tools to enhance resilience, though uptake remains uneven.

Building resilience through strategy

Mitigating geopolitical risk requires more than reactive crisis management, it demands proactive, strategic resilience. Best practice includes:

• Jurisdictional risk mapping - understanding the political, legal, and social dynamics of each operating region
• Stakeholder engagement - building trust with governments, communities, and civil society to reduce friction and foster alignment
• Contingency planning - developing exit strategies, alternative supply routes, and rapid response protocols
• Governance agility - ensuring internal decision-making structures can adapt to fast-changing external conditions.

Together, these practices form the foundation of a forward-looking risk posture, one that enables mining companies to anticipate disruption, adapt with agility, and sustain long-term value in an increasingly unpredictable world.

Resilience in an era of uncertainty

Geopolitical disruption is unpredictable, but it’s not unmanageable. By embedding geopolitical awareness into enterprise risk management, mining companies can safeguard their people, assets, and reputation, while continuing to deliver value in challenging environments.

In a world where the political landscape is shifting beneath our feet, resilience is no longer optional - it’s a strategic imperative.

How BDO can help

BDO’s risk advisory and natural resources & energy team has supported clients in understanding and navigating geopolitical complexity across a variety of jurisdictions. Our work includes scenario modelling, stakeholder mapping, and governance uplift to ensure mining companies are not just reactive - but resilient. Contact us to find out how we can support you.