A “switch to growth” by miners is the new number one on EY’s list, displacing productivity improvement as the area considered to be the greatest risk facing the industry in the coming financial year.

The report found the lack of fresh investment by miners was shrinking supply pipelines and reducing the sustainably of production volumes, limiting future growth options for companies.

It said this pro-cyclical behaviour in conjunction with the short-term focus of shareholders had pushed growth above the ongoing drive for productivity in the workplace.

EY Global mining & metals leader Mike Elliott said miners needed to make brave decisions to ensure the industry continued to sustain itself.

“Growth today is undoubtedly fraught with risk and tension, but standing still is not an option,” he said.

“Growth is essential in an industry that diminishes with every tonne or ounce it produces, where value is ultimately destroyed if the pipeline is not replenished.”

Elliott warned that those who decided against growth were running the risk of missing out on the inevitable industry upturn, which was expected to come about in the next few years as a result of supply constraints, the removal of high-cost supply and growth in demand.

“Many mining companies risk missing future growth prospects because they are hostage to highly risk-averse investors, and, as a result are focused on short-term cost-cutting and maximising current returns to shareholders,” he said.

The report also highlighted the threat emerging from private capital investors and commodity traders in a stronger position to make long-term countercyclical investments without shareholder resistance.

“Unless mining companies reinvest, they are essentially liquidating their asset base,” Elliott said.

“The switch to growth is looming, and assets are now still relatively cheap. Given the long lead time to develop new supply, decisions to invest for future growth have to be made now or long-term returns will be lowered.”

While losing its place on top of the list for the coming financial year, productivity was ranked second overall in terms of risk facing the industry, while access to capital was third and resource nationalism fourth.

EY said productivity would remain a core focus for mining boards in the coming financial year, and that a lasting transformation to more sustainable operations was expected to take place over two to three years.

Social licence to operate, price and currency volatility, capital projects and access to energy were listed next.

Cybersecurity and innovation both made the list for the first time at nine and 10 respectively.

EY said 65% of mining companies reported an increase in cyber-threats in 2014, with an increased reliance on integrated IT systems due to a drive for productivity leaving them more vulnerable than before.

Social licence to operate, resource nationalism and access to energy were the only risks to be included in the 2015-16 report and the 2008-09 report, a statistic EY said highlighted the cyclical nature of the mining industry.