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Water may be the energy transition’s most overlooked constraint

Emma Gagen
Thursday, November 5, 2026

Mining and metals production depends on water. It is essential for extraction, mineral processing, dust suppression, cooling, transport and site operations. At the same time, water resources are coming under increasing pressure from growing demand, competing users, droughts, floods and changing hydrological conditions.

Until now, however, there has been no comprehensive global picture of how physical water risks intersect with mining and metals facilities across commodities, geographies and facility types.

To help address that gap, ICMM, working with the University of Technology Sydney and drawing on globally recognised datasets from the World Resources Institute (WRI) and WWF Risk Filter Suite, has developed the Global Mining and Metals Water Dataset. The objective is simple: provide a shared evidence base that allows policymakers, investors and industry to better understand where physical water risks coincide with mineral supply chains.

The findings should command attention.

Nearly two-thirds (65.7%) of mining and metals facilities globally are exposed to high levels of at least one physical water risk indicator. These risks include drought, flooding, baseline water stress and year-to-year variability in water availability. Almost 5% of facilities face high risk from three or more of these pressures simultaneously. Perhaps the most significant finding is not about climate extremes at all.

The most prevalent risk identified by the dataset is baseline water stress, which reflects long-term competition for available water among industrial, agricultural and domestic users. More than 38% of mining and metals facilities are located in areas experiencing high or extremely high water stress or arid conditions where water is functionally unavailable. More than 27% are located in areas experiencing high water depletion, where water resources are being consumed faster than they are replenished.

This matters because it challenges a common assumption that water risk is primarily a climate story. While drought and flooding remain important concerns, the data suggests that competition for limited water resources may be the more widespread challenge facing future mining and metals production. The implications extend well beyond the mining sector.

Minerals and metals underpin renewable power generation, electricity networks, battery technologies and modern infrastructure. Yet the regions most important to future supply often overlap with significant water-risk hotspots. The dataset identifies notable concentrations of compound water risk exposure in places such as Chile, southern Africa, China, India and Australia - regions that play major roles in supplying commodities essential to the energy transition.

This does not mean mining is causing those risks. Nor does the dataset assess the water performance of individual companies or sites. Rather, it highlights a reality that policymakers increasingly need to confront: water availability may influence where, how quickly and at what cost future industrial development can occur. That insight should shape policy thinking.

Too often, decisions about industrial development, infrastructure, energy systems and water management are made in separate silos. Yet water is fundamentally a shared resource. Where multiple sectors, communities and ecosystems depend on the same catchment, competition can become a constraint on growth long before a physical shortage appears in national statistics.

Governments seeking to strengthen economic resilience and accelerate clean-energy deployment therefore need to place greater emphasis on integrated water, land-use and industrial planning. Understanding where water pressures already exist - and where future industrial demand is likely to increase - can help reduce conflict, improve permitting outcomes and support more informed investment decisions. The good news is that this challenge is manageable.

Across the mining sector, water stewardship practices are becoming increasingly sophisticated, with greater focus on efficiency, catchment-based approaches, transparency and engagement with other water users. Responsible producers embed water stewardship into business-as-usual. But water stewardship at the company level alone cannot solve a challenge driven by growing competition across entire regions and economies. Effective solutions require collaboration among governments, industry, communities and investors.

As demand for minerals and metals continues to rise, the conversation about supply security must evolve. It is no longer enough to ask where critical minerals are located. We must also ask whether the water systems needed to support their production are resilient enough to sustain future growth.

The energy transition depends on minerals. Increasingly, mineral supply may depend on water. Policymakers who fail to recognise that relationship risk discovering too late that one of the greatest constraints on the transition was hiding in plain sight. 

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