Skip to main content Skip to Footer


The real, but limited, impact of Brexit on mining

Accenture analyzes how UK’s vote to exit the EU will affect the mining industry.

The United Kingdom’s decision to leave the European Union has grabbed the attention of the world. The question is, what will Brexit mean to mining—an industry that has already faced its share of economic challenges over the past few years?

To help answer that question, Accenture looked at 12 countries that have significant mining operations, and analyzed their linkages to Brexit-driven changes. This analysis looked at three key factors for each country:

  • Ability to attract foreign direct investment (FDI) from UK sources

  • Importance of mining exports to the United Kingdom

  • Role of UK-based financing.

These were then distilled into a Mining Susceptibility Index (MSI) that ranks each country in terms of its mining industry’s exposure to Brexit. (See Figure 1)


Figure 1

This analysis indicates that Australia, India and Norway may experience the most impact resulting from the United Kingdom leaving EU. As the chart shows, Australia’s exposure stems largely from its financial sector’s reliance on the United Kingdom, which outweighs the relatively reduced ties to UK trade and FDI levels. The Australian banking sector’s significant exposure to Britain and the EU2 can affect the cost of capital as well as access to funding for miners in that country.

Meanwhile, India—which has deep historical connections with the United Kingdom—receives almost all of its mining-sector FDI from the United Kingdom, and 1.1 percent of its total mineral exports go to the United Kingdom. Norway’s connection is based largely on the fact that the United Kingdom is a sizeable customer for its mineral exports.3

Brexit represents a complicated shift in the economic landscape, and there are other factors to consider as well. On the supply side of commodities, Brexit would have relatively little direct impact because the United Kingdom does not produce many commodities. However, the United Kingdom is a key trading partner of China, which underpins world commodity demand. So it will be important to monitor the impact of Brexit on China closely, particularly with regard to future trade relations.

Currency values will also play a role. Generally, as Brexit unfolds further, the potential strengthening of the US dollar, if only temporarily, until clear new economic and trade policies are established in the United Kingdom, is likely to create headwinds for many countries’ mining exports.

From a broad perspective, there are some stabilizing factors. For example, commodity prices are not likely to retreat sharply, simply because many commodities are already priced so low that they are barely covering operating costs. And although Brexit may or may not assist world economic growth, it is at least, in the worst case, not expected to destroy the global recovery—and ultimately, that reality should play the largest role in shaping global trade and investment in the mining industry.

1Accenture Research analysis, based upon analysis of the following: GTIS data; Bank of International Settlements data,; Analysis of data.
2Michael Roddan, Bad year for ASX as Brexit takes toll, The Australian, 28 June 2016.
3Accenture Research analysis.