Social aspects of business risk in the mineral industry—political, reputational, and local acceptability risks facing mineral exploration and mining

Mineral exploration is an industry of uncertainties. Only 0,1% of exploration projects become mines, as the volume, content, and quality of a deposit all must be economically justifiable to find funding in the global financial market. However, the business risk of mineral exploration is not limited to geotechnical and financial risks, as social aspects are now considered the biggest risk facing the industry. Here, we identify three social aspects of business risk that may challenge the industry: political, reputational, and local acceptability. Political risk arises when sectoral authorities and the related legislation come into conflict, such as mineral versus environmental legislation. Reputational risk lies in the relationship between a company’s past and current operations in combination with the legitimacy of the entire industry. Local acceptability risk parallels the social license to operate, with poor corporate conduct, competition with other livelihoods, intrusion into culturally sensitive areas, and local values critical of mining all potentially evoking resistance. Companies must be aware not only of the nuances of each social aspect but also of the interplay between them to understand the full scale and scope of the business risks associated with exploration.


Introduction
If there could be only one word describing mineral exploration, it would be uncertainty (Olofsson 2020; Thomson and Joyce 1997). And with uncertainty comes risk, of which many face the industry. Geotechnical risk concerns the volume and quality of the mineral deposit, the accuracy of their scientific assessment, and technological opportunities for its mining, processing, and metallurgy. Economic risk relates to the fact that mineral exploration is a business based on finding potential prospects. Hence, funding must be attracted from global markets in a situation in which there is no certainty that the investment will be profitable. As often argued in the industry, an average of only one of one thousand mineral exploration projects results in a mine (Moon and Evans 2006;Thomson and Joyce 1997).
Up to the early 2000s, discussion of risks in mining and mineral exploration was mainly limited to geotechnical and economic issues (Eggert 2010;Kemp et al. 2016). By the late 1990s, the industry had an increasingly negative reputation, facing criticism for neglecting environmental impacts and local community engagement. As a result, the concept of social license to operate (SLO) emerged as the industry realized that it could be affected by the attitudes and responses of the surrounding society (e.g., Boutilier and Thomson 2011;Prno and Slocombe 2012;Thomson and Joyce 1997). In the early 2020s, loss of acceptance of the business operation by the local community and/or society in general was identified as the biggest risk facing the mining industry (EY 2020). This paper discusses the social aspects of business risk in the mineral industry, which comprises mineral exploration and mining. We focus on mineral exploration because it is an industrial sector with high business risk. Also, exploration has received much less attention than mining in social science research, although it is an essential phase and starting point of mining developments. In fact, in the European Union resistance to mining developments usually occurs in the planning phase of the mine (Kivinen et al. 2020) although resistance during the productive stages are more common globally (Franks et al. 2014).
Until the late 2010s, the mining industry used the term "social risk" when referring to the societal pressures facing their business operations. However, recent academic discussion more accurately distinguishes social and business risks: (i) social risks are the expected negative impacts of mining-related activities and threats on the people, whereas (ii) business risks are the risk to mining operations from the people (e.g., Graetz and Franks 2016;Kemp et al. 2016;Worden 2016Worden , 2019. We apply this distinction and discuss business risks in the mineral industry, particularly during the exploration phase, i.e., at the early stage of a possible mine development. There are several reasons for zeroing in on social aspects of business risk. Firstly, social science research about business risks in mineral industry is under researched in comparison with social risks, negative impacts, and concerns that mineral exploration and mining are causing especially in the hostcommunities of operation (e.g., Beland Lindahl et al. 2018Lindahl et al. , 2021Poelzer & Ejdemo 2018;Suopajärvi et al. 2019a, b).
Secondly, exploring business risks in highly regulated democratic countries is novel. While business risks in developing countries are more often recognized, highly regulated democracies, such as Finland and Sweden, are typically assumed to offer a much more stable environment for businesses and economic activity (Fraser Institute 2019). Thirdly, from a practical point of view, conflation of social risk and business risk in the industry may cause misdiagnoses among companies leaving real concern about social risks, negative impacts to the people and to the environment aside in their corporate strategy (Worden 2016). For companies to understand both business risks and social risks is necessary as there are rebound dynamics between the two: if risks to the people are perceived as too high, "it could lead to hostilities and opposition that threaten project viability or corporate reputation" (Kemp et al. 2016, p. 24). In other words, environmental and social risks may turn to business costs, to the situation where business risk is realized (Franks et al. 2014).
Fourthly, mineral extraction is expected to expand around the globe. The transition to carbon neutral energy production and traffic is expected to increase the demand of cobalt, rare earths, lithium, platinum, and nickel. This development will drive an intensification of mineral exploration, opening new mines, and reopening of old mines (Lébre 202 et al.;Valenta et al. 2019). Consequently, "battery boom" expanding the areas of mineral exploration and new mining is likely to generate more criticism and conflicts-and associated business risks (Eerola 2022;Franks et al. 2014).
Responding to these gaps and needs, the aim of this paper is to explore the social aspects of business risk in the mineral industry and in mineral exploration in particular. Based on our research and participation in R&D projects, the academic literature, and empirical examples from northern Scandinavia (i.e., Finland and Sweden), we identify and elaborate categorization of three social dimensions of business risk, namely: (i) political risk, including unstable political conditions and incoherent jurisdiction and regulation; (ii) reputational risk, including a company's own reputation and the legitimacy of the whole industry in the eyes of the public; and (iii) local acceptability risk, which can engender resistance in the local context where the industrial operation is taking place. There may also be situations where two or even all three risks are realized, as shown in Fig. 1. Figure 1 serves as the basis of the analysis, looking at each of these business risk dimensions in details and the relationship between the dimensions.
In the following section, we briefly discuss business risks in the mineral industry in general. After that, we focus on the three social aspects of business risk in their respective sections. We illustrate our discussion with empirical examples from Finland and Sweden. The paper ends with a discussion and conclusions.

PoliƟcal Risk
Local Acceptability Risk

Social aspects of business risk in mineral exploration and mining
From a sociological perspective, risks are socially constructed expectations that unwanted results may be realized in the future. Risks involve uncertainty-they are future possibilities in a situation in which there is no definite knowledge of what might happen (Aven and Renn 2010;Beck 1992Beck , 2009). As an industry, mineral exploration is considered particularly risky. As Thomson and Joyce (1997) pointed out, mineral exploration is a time-consuming, expensive, highly competitive, and, until the later stages of a project, secretive activity. To find potentially lucrative but rare deposits, vast areas must be surveyed, visited, examined, and evaluated. Exploration is a dispersed and transitory activity laden with uncertainty and ambiguity, clearly differing from mining, which is carried out at fixed locations over extended periods of time and provides revenue from extraction. In addition, it is uncertain whether an individual exploration project will ever become a mine. The final operator of a project is also unknown until the last stages of mineral exploration. In fact, as aptly pointed out by Luning (2012), an exploration license may change hands several times, going from junior to major companies or to other juniors. Furthermore, the progress of exploration projects is generally episodic, with periods of intense activity separated by periods of little or no activity. The process is often protracted, and it is not uncommon for several years to elapse between first identifying the economic potential of a mineral deposit and the decision to mine.
As regards mining, discussion of the definitions of social risk and business risk is mainly of Australian origin (Graetz and Franks 2016;Kemp et al. 2016;Worden 2016Worden , 2019. Graetz and Franks (2016) identified five types of business risks, i.e., social, technical, economic/financial, environmental, and political/legal risks, any of which may pose the ultimate risk of being forced to end a profitable endeavour. As stated earlier, geotechnical and economic/ financial challenges in mineral exploration are recognized. Environmental risk, i.e., the costs and consequences of environmental contamination or destruction, in mineral exploration is relatively minor compared to that of mining (Eerola 2017) and can be further reduced with the application of new low-impact mineral exploration technologies (Eerola 2021). What is left are the social and political aspects of business risks, which are less known in the exploration industry. Graetz and Franks (2016) defined business risk as "the potential threats to, and unwanted impacts on, inter alia, a company's operations, reputational capital, market share and profitability, as a consequence of operational decisions and strategies, and the exogenous responses of other actors to these decisions and strategies" (pp. 588-589). This definition argues that business risk is a result of (i) decisions made by the company and (ii) public pressure that affects both a company's ability to operate and its reputation. However, other research suggests that there are also socioeconomic and cultural preconditions, always unique to each local context, that the company cannot change through its conduct and operations, and that may pose a serious risk to a project (Beland Lindahl et al. 2018;Prno 2013;Prno and Slocombe 2012;Suopajärvi et al. 2019a). Hence, it is not only company performance but also site-specific local preconditions that shape the interactions between companies and local actors. We link the important role of local context to Worden's (2016;in different context earlier Miller & Lessard 2001) concept of social acceptability risk, i.e., the likelihood that the project will meet opposition from stakeholders and the consequences of that opposition, and introduce the concept of local acceptability risk.
Another social aspect of business risk is political/legal risk, which includes, according to Graetz and Franks (2016), change of legislation/regulation, nationalization, and loss of regulatory license to operate (p. 589). We argue that, for example, unstable political conditions and incoherent jurisdiction and regulation are parts of the social domain and therefore treat political risk as a social aspect of business risk.
In addition, we argue that there also exists a reputational risk that affects a company's performance. While Graetz and Franks (2016, p. 589) seem to claim that diminishing reputational capital is a result of a social type of business risk, we see reputational risk as a business risk of its own. The reputation and legitimacy of the whole industry may affect individual mining or mineral exploration projectsand vice versa. In the following sections, we review the relevant academic literature and discuss the significance of political risk, reputational risk, and local acceptability risk at the mineral exploration stage and provide empirical examples of these three social aspects.

Political risk for the mineral industry
According to Graetz and Franks (2016), political/legal business risk exists in the form of threats "from the state, principally to corporate entities operating within the political society" (p. 598). However, this definition calls for deeper scrutiny of what constitutes the "state" as well as "political society". States and politics are more complex and globally interdependent in the 2000s than ever before (Eriksen 2014;Therborn 2011). Reflecting general governance trends, political power in mineral politics has shifted from the state level to transnational levels of government (e.g., the European Union) as well as to local communities (Prno and Slocombe 2012). These vertical shifts have been followed by horizontal shifts, creating a situation in which power rests not only with governments but also with non-governmental organizations (NGOs), globally operating multinational companies, and their industrial associations. States are still important, but mineral governance increasingly involves negotiation and cooperation rather than the traditional state-led processes of "coercion, command and control" (Prno and Slocombe 2012, p. 349). From a business point of view, changing forms of governance offer opportunities in the form of collaboration, negotiation, and bargaining, as well as increased complexity and uncertainty, which also increase business risks.
Polity, policy, and politics are concepts that can be used to help disentangle the complexity of "political society". First, polity refers to a historically formed and established political arena consisting of actors and their relations (Palonen 2003). Polities, like state governments, are usually sectorally organized into ministries, each with its own area of responsibility and objectives. Hence, the state polity is not monolithic: it is not "one", but harbours different and sometimes competing interests, not least in the mineral industry context. As in many other countries, the Swedish permitting process is governed by mining policy (Minerals Act 1991) and environmental policy (Environmental Code 1998:808). Accordingly, there are two ministries representing different, and sometimes conflicting, objectives. The same arrangement exists in Finland, where in the early 2020s the Ministry of Environment sought to reform the Nature Conservation Act and Decree with the objective of improving integration between the Act and other natural resource legislation, including the Mining Act. The goal is to effectively prevent the fragmentation of habitats (Ministry of Environment 2021). This has evoked concern in the company Mawson Oy, which is conducting mineral exploration and planning a mine in and near conservation areas in Finnish Lapland, and in municipalities supporting mineral exploration and mining in the area (Lapin Kansa 2020a, b). Indeed, more effective nature conservation legislation may conflict with the sectoral objectives and interests of the Ministry of Economic Affairs and Employment, which is promoting mine developments in Finland (Finland's Minerals Strategy 2010). Hence, unaddressed goal conflicts and a weakly coordinated polity are sources of uncertainty and business risk for companies, which need a stable investment scenario with clear terms of reference and predictability (Poelzer 2019).
Policy refers to a plan of action agreed on or chosen by an entity. Policy is a set of normative guidelines aiming to achieve specific purposes, including the inclusion and coordination of different actions, and implementation measures (Palonen 2003). As in many other countries, Finland's minerals strategy (2010) and Sweden's Minerals Strategy (2013) have sectoral mineral strategies promoting mineral extraction and mining industry growth. Sweden and Finland are generally known as countries with stable and favourable mining policies. The Fraser Institute evaluates the favourability of different jurisdictions for industry investments using a Policy Perception Index. It argues that approximately 40% of investment decisions are determined by policy factors, such as onerous regulations and taxation levels. Finland has been described as "a top jurisdiction worldwide" (Fraser Institute 2019, p. 38), and Swedish policy has also typically been assessed as favourable. However, in 2020, Sweden's rating dropped to position 20 out of listed 77 countries/ regions as investors criticized its regulatory enforcement and regulatory inconsistencies (Fraser Institute 2019.
Risks associated with policy making may result from drastic changes in sectoral policy that can be hard and costly for a company to accommodate. However, risks can also be associated with how policies are implemented.
Several Swedish examples illustrate how conflicting goals within national policy frameworks can result in long and unpredictable permitting processes with business risks including long lead times, unexpected outcomes, and litigation (Beland Lindahl et al. 2018;Poelzer 2019).
How mineral policy is formulated and implemented is a result of politics, different political actors striving for power to influence what themes are raised to the agenda and to create power relations so that they can decide on matters deemed relevant (Palonen 2003). Political risk in mineral exploration and in the minerals sector more generally can arise from citizens' mistrust of the industry, legislation, or the authorities framing the sector. As argued by Graetz and Franks (2016), distrust is a strong motivating factor that can lead actors such as NGOs, communities, and individual citizens to commence protests and political actions, which in turn may lead to political changes affecting the mineral industry and individual projects.
In the late 2010s, several citizens' initiatives were submitted to the Finnish parliament demanding amendments to the Mining Act. Voices were raised calling for stricter environmental legislation and for taxation that would enable the state and host communities to benefit from mining (Citizen Initiative 2019a, 2019c. Swedish studies suggest that confrontational mining resistance is likely to grow at the national level when the state offers little access or influence to mining-sceptical actors in either policy formulation or implementation, and when there is a sufficient number of simultaneously ongoing contested licensing processes. In cases involving indigenous people, weak or contested indigenous rights may also spur resistance (Zachrisson and Beland Lindahl 2019).
Political business risks are associated with the overall performance and legitimacy of the political system, i.e., polity, policy, and politics. Lack of trust in mineral-related decision making is found among citizens affected by ongoing or planned mining projects in Sweden and Finland. Recent surveys show that almost half of respondents in Finland and Sweden argued that mining permits are given to mining projects on flimsy grounds and that environmental monitoring was not trustworthy (Jartti et al. 2020;Litmanen et al. 2015;Saariniemi 2018;Suopajärvi et al. 2019a). These results are striking, as most people in these welfare states generally trust their government and authorities, and typically think that state authorities act in a trustworthy manner (Rothstein 2002;van Oorschot et al. 2006).
Hence, one of the most important tasks of the political system is to develop institutions, including regulations, that are responsive to citizen demands and thereby promote legitimacy and predictability in decision making and society. Tightening up environmental or economic requirements in line with citizen demands may in fact reduce mistrust in the licensing processes and monitoring, reducing political business risks for the industry.

Reputational risk for businesses in the mineral industry
The concept of social license to operate (SLO), referring to local acceptance of industrial projects, emerged in the mining industry in the late twentieth century because of negative reputational issues within the sector (e.g., Boutilier and Thomson 2011;Prno and Slocombe 2012;Thomson and Joyce 1997). While the SLO predominately concerns local acceptance (Moffat et al. 2016;Thomson and Boutilier 2011), there is increasing recognition that societal-level factors also play an important and interacting role at the local level (Lesser et al. 2020). Recognizing that the reputation of the whole industry also affects single projects, international-level standards, such as the Extractive Industries Transparency Initiative (EITI) and Towards Sustainable Mining (TSM), aim specifically at accomplishing this task. Self-regulation of the whole industry is important, and as Boutilier and Thomson (2011, p. 8) argue, "the task of achieving socio-political legitimacy is much less under the company's direct control, much less familiar, and much more complex".
Macro-discursive expectations create the shifting context in which companies operate and try to gain an SLO from stakeholders (Parsons et al., 2014) . Distributional and procedural fairness have emerged as factors affecting nationallevel attitudes towards mining in Australia, China, and Chile (Zhang et al. 2015). Similar findings have emerged in the Finnish context (Jartti et al. 2020), while a study in Sweden showed how societal-level attitudes and issues related to mining affected a project-level SLO . Societal expectations extend beyond the project level, both to the overall governance of the industry and to the conduct and standards by which companies operate. While mineral exploration primarily involves research and discovery, it is part of the mining cycle and often associated with possible mine development at a later stage. Therefore, attitudes towards mining and perceptions of mineral exploration tend to go together (Beland Lindahl et al. 2021).
The Talvivaara case in Finland seriously impaired the image of the national mining industry (Sairinen et al. 2017). In the autumn of 2012, a toxic leak in the Talvivaara mine's gypsum pond induced a criminal investigation of downstream water pollution. A survey conducted in four Finnish provinces before the Talvivaara gypsum-pond leak showed that mining and mineral exploration were widely approved by their populations (Jartti et al. 2014) , but after the accident, the overall national approval of the industry declined (Jartti et al. 2017). The criticism of mining was strongest in Uusimaa Province, where there is no mining at all (Jartti et al. 2017). The Talvivaara case is a crucial element of mining conflict in Finland, making it almost impossible to talk about the mineral sector without referring to it (see Heikkinen et al. 2013;Sairinen et al. 2017;Tiainen et al. 2014). This was also reflected in interviews with residents (n = 31) in Finnish Lapland in 2019-2020, in which every single interviewee, whatever the opinion about mineral exploration, referred to Talvivaara: "We don't want another Talvivaara here" (see Beland Lindahl et al. 2021). The Talvivaara example shows that an accident or poor performance of one company or operation may create reputational risk for the entire sector.
The SLO literature often stresses that a good company-community relationship is based on positive engagement (Moffat and Zhang 2014), reciprocal dialogue (Mercer-Mapstone et al. 2018), and the open exchange of information (Zhang et al. 2018). Failure to achieve such a relationship can affect company reputation beyond the affected community, as any vocal community opposition can exert indirect influence on it through the mass and social media (Graetz and Franks 2016;Prno 2013). Hence, reputational risk is constantly present in a company's operations. Furthermore, and perhaps even more importantly, if a company's reputation has once been lost, it is hard to regain it.
To cite an example from Sweden, the British company Beowulf Mining PLC started exploration activities in Jokkmokk Municipality in 2006, planning to extract iron ore from one open-pit mine and possibly to develop additional mines in the area (Beowulf Mining 2020). Their subsidiary, Jokkmokk Iron Mines AB (JIMAB), was granted permission to carry out test extractions in 2013, but the company's plans to extract minerals in the Kallak/Gállok area has been a source of controversy since its inception. Interaction between the company and the affected indigenous Sámi reindeer herding communities broke down at an early stage of the process and, despite the company's efforts to re-establish relations at a later stage, trust never developed (Beland Lindahl et al. 2016. The protests culminated in 2013 when local and external protesters temporarily stopped the test extractions and were removed by the police. The project has become increasingly politicized and acquired symbolic dimensions related to the rights of indigenous people, distributional justice, and concern for northern nature. When Beowulf initiated graphite exploration in the Saimaa Lake region in Eastern Finland in the late 2010s through Ab Fennoscandian Resources Oy, the company was immediately associated with its conflict with the Sámi people in the above-mentioned Kallak/Gállok case (Kallio 2016). The company's disrepute spread more quickly than its operations, and local attitudes were sceptical from the beginning. Apparently, the company also did not engage sufficiently with the local community in Finland from the outset, and it was soon involved in a dispute in the region (Kokkonen 2018;Leino and Miettinen 2020). This example shows how a company's failed performance in one locale can affect its, and the industry's, reputation not only locally, but also nationally and globally.

Local acceptability risk for mineral exploration
An extensive body of literature examines the local acceptance of mining-i.e., the SLO (e.g., Boutilier and Thomson 2011;Lesser et al. 2017;Litmanen et al. 2015;Owen and Kemp 2013;Parsons et al. 2014;Prno 2013;Prno and Slocombe 2012;Poelzer et al. 2020;Suopajärvi et al. 2019a). For the present purposes, we oapproached the literature to learn how and why a company can lose local acceptance of its operations by actors in the host community. Local acceptability risks as social acceptability risks in general concern the likelihood that a project will meet opposition from stakeholders and the consequences of that opposition (Worden 2016). These risks may arise because of the company's own mode of operation or be caused by external factors, such as the unique socioeconomic, land use and cultural features of the local community and, negative environmental and social impacts expected by the host community initially.
While considerable research has explored the SLO in mining, literature on the social license to explore (SLE) is relatively scarce (for exceptions, see, e.g., Beland Lindahl et al. 2021;Caron et al. 2016;Eerola 2017;Luning 2012;Lyons et al. 2016;MacKenzie et al. 2020;Suopajärvi et al. 2019b;Thomson and Joyce 1997). This is not to say that social licensing at the exploration stage is unimportant-quite the contrary. Mineral exploration is often a newcomer in a locality, especially in greenfield sites, i.e., unexplored or underexplored areas. Mineral exploration companies represent the mining industry in many local communities' first encounters with the industry, at a stage when relationships take shape.
The SLO literature on mining argues that the local "context is a key" (Prno 2013, p. 584), and this is true for SLE as well, as all exploration sites differ, and companies must adapt and take into account specific features of the social structure and land use in a given area. For example, previous experiences of mining or natural resource industries in a locality, underlying value-based disagreements about land use and the use of natural resources, or strong local livelihoods threatened by mining may influence companies' ability to gain SLE (Beland Lindahl et al. 2016Suopajärvi et al. 2019a).
Local acceptability risk elevated by a strong competing industry is exemplified in several places in Finland where the tourism industry has been critical of mining and mineral exploration. In Kuusamo Municipality in northeast Finland, where the large Ruka ski resort is located, mineral exploration has been strongly contested (Lyytimäki and Peltonen 2016). In Kittilä Municipality in Finnish Lapland, where the Kittilä gold mine has a strong local SLO, new exploration projects have been also opposed near the Levi ski resort (Kantola et al. 2019). Besides tourists, holiday homeowners are among the stakeholders most critical of the expansion of mining areas, and thereby also of mineral exploration. Such resistance has often been described in terms of not in my backyard (NIMBY), whereas Eerola (2017 p. 20) referred to the phenomenon as not in my leisure area (NIMLA).
Local acceptability risk is also high in culturally valued areas. For example, Europe's only indigenous people, the Sámi, with their traditional nature-bound culture have resisted mining in their home area in northern Scandinavia. The above-mentioned resistance involving indigenous people in the Kallak/Gállok case gained extensive media coverage, and Sámi resistance in the Swedish Rönnbäcken case mobilized support from international NGOs and the UN Rapporteur on Indigenous Rights (Beland Lindahl et al. 2016;Zachrisson and Beland Lindahl 2019). In Finland, in the River Tana valley, Karelian Diamond Resources had to withdraw from diamond exploration because of local Sámi resistance that also gained international media coverage (Lassila 2018). These examples show that local acceptability risk may have an impact on the decisions of global companies and financiers.
A specific livelihood in northernmost Europe is reindeer herding, which is also a traditional livelihood among the Sámi people. Reindeer herding, and the people engaged in it, are particularly vulnerable to mineral exploration and mining, since reindeer herding requires access to large areas of land suitable for grazing. Small local groups with little resources at their disposal tend not to present strong opposition, but as businesses are expected to work ethically (e.g., Graetz and Franks 2016), their resistance may become relevant. Not acknowledging and respecting indigenous rights or traditional livelihoods is becoming increasingly risky for the mining industry in northern Europe. The intersection of indigenous rights and mining-related developments in Scandinavia has become an increasingly contested socio-legal arena (Larsen et al. 2018;Raitio et al. 2020) .
These examples illustrate the diversity of local contexts and local acceptability risks. The resistance of local stakeholders, those who are affected by the operations or those who can influence the developments at the local level (Lesser et al. 2017;Prno 2013), may lead to conflicts and lawsuits causing delays and even stop the operation (Franks et al. 2014). Assessments of attitudes in one place cannot easily be generalized to other places. Nevertheless, insights into the contextual conditions and drivers shaping attitudes can be generalized and help explain, even predict, local attitudes to exploration and mine development across Europe (Beland Lindahl et al. 2021).
Although local context is important, company performance also matters. As illustrated above, poor corporate conduct in mineral exploration can be related to, for example, target selection in sensitive areas (e.g., nature conservation areas, Sámi homeland, reindeer herding areas, and tourism destinations) with associated lack of communication and stakeholder engagement from the beginning (see Eerola 2021; 2022).

Discussion: social aspects of business risk in mineral exploration
Risks concern the future. We argue that three social aspects of business risks-political, reputational, and local acceptabilityare particularly relevant to mineral exploration. Mineral exploration is time consuming, often lasting decades, while legislation, public opinion, commodity prices, markets, and the production and demand of the explored metal may change quickly (Eggert 2010;Thomson and Joyce 1997) and affect the conditions of the project. In a changing socio-political operational environment, mineral exploration companies need to be aware of the social aspects of business risks to make informed and proactive decisions to manage those risks.
Although power is increasingly diffused in mineral governance, the state is still a key actor setting the legislative and regulatory frame for the industry (Prno 2013). Nevertheless, this does not mean that there are predictable political conditions for the industry. From a company's point of view, political risks are primarily associated with sudden political changes and/or uncertainties arising from weakly coordinated polities, policies, and political processes. Power struggles between sectorally organized national political institutions, and their associated interest groups, are common in most Western democracies. Despite offering overall stable conditions, the political climate may change rather quickly in democratic societies such as Finland and Sweden, as parliament is re-elected every fourth year, possibly resulting in changes in mineral sector policy (Zachrisson and Beland Lindahl 2019). Hence, business always faces a political risk, which mineral exploration companies must manage. How companies act in the political arena can increase or decrease the risks faced. Supporting stricter environmental or economic requirements in line with citizen demands may, for example, help reduce mistrust of the licensing processes and monitoring, thereby reducing business risk for industry.
Another set of business risks concern the reputation of companies and projects. The experiences and opinions of various groups in civil society, ranging from the smallest host communities to NGOs operating globally, are easily amplified through the mass and social media (Eggert 2010;Thomson and Joyce 1997). In the Global North, the Internet and social media are widely used, and national media ownership is not centralized. A company's track record follows it to new locations. The conduct and standards of each company affect the legitimacy of the whole industry, as became evident in Finland in the Talvivaara case (Sairinen et al. 2017;Tiainen et al. 2014). Therefore, a mining and mineral exploration company's reputational risk depends not just on its own performance, but also on the performance of other companies in the sector. Thus, individual companies within the global mineral exploration and mining sector depend on one another to ensure proper conduct and reduce reputational risk.
Local stakeholders are seen as key actors because of their proximity to the project and because people living in the area are most affected by the operations. If they oppose the project, this may cause delays and increase operator costs (Franks et al. 2014;Lyons et al. 2016;Prno 2013;Prno and Slocombe 2012;Thomson and Joyce 1997). Local criticism, possibly supported by national NGOs, can delegitimize a project and lead to the withdrawal of investors, thereby ending the project (Eggert 2010;Franks et al. 2014;Thomson and Joyce 1997). Also, lack of mutually beneficial local relations may prevent a company from recruiting local labour and thus benefitting from local actors' support. Mineral exploration is the stage when a representative of the mineral industry makes first contact with the local community and relations are established (Thomson and Joyce 1997). If an SLE is not achieved, this may seriously hamper the development of a potential mining project. Hence, as the environmental impact of mineral exploration is relatively limited, and if the budget of a mineral exploration project is stable, the main challenge will be a social one, that is, earning and maintaining the SLE (EY 2020). Consequently, it is very important for the mineral exploration company to correctly assess and manage local acceptability risk. Knowledge of the local context, and of the factors shaping local attitudes to mineral exploration and mining, can help companies make informed site selections, avoid high risk projects, and manage existing social acceptability risks in satisfactory ways. Figure 2 provides a developed illustration of three social aspects of business risk and their combinations introduced in Fig. 1. There can be a solely local acceptability, political, or reputational risk, a combination of two types of risks, or a situation in which all these risks are simultaneously present and even reinforce one another. Examples of such 1 3 multiple risk situations can be cited from Finland. The above-mentioned company Beowulf (see Reputational risk for businesses in the mineral industry) brought its bad reputation with it from Sweden, creating a fertile basis for local opposition movements in the Saimaa Lake area. These movements generated a national network of mining-sceptical groups demanding Mining Act reform (Leino and Miettinen 2020; Pulkka 2019), with stricter rules for exploration as well. This case occupies a central position in Fig. 2, showing the coexistence of all three risks. Another example of such a company and situation in Finland is that of Dragon Mining's operations (see Eerola 2022;Lyytimäki and Peltonen 2016;Mauranen et al. 2014;Muhonen and Gröndahl 2019). A combination of strong local resistance, an unstable political situation and legislation, and a company with a bad reputation would be the worst-case scenario for a mineral exploration company.
As noted, risks concern the future (Beck 1992, 2009) and are associated with expectations, especially in the mineral exploration context. Mineral exploration typically generates both positive and negative expectations, with their management being among the main challenges for the involved companies (Beland Lindahl et al. 2021;Olofsson 2020;Suopajärvi et al. 2019b; Thomson and Joyce 1997). It is necessary for the companies to emphasize the potential of a business proposition to investors, but if a deposit is described in excessively lucrative terms, this may create overly optimistic expectation within the local community of employment and impacts on the local economy. If very positive economic impacts are expected locally, but they turn out to be weak, this can be a source of local resistance. Therefore, exploration companies have a clear challenge concerning what, how, and when to communicate about their activities (see Moffat and Zhang 2014). Kemp et al. (2016, p. 22-23) claim that "unintentional generation of social risk may be a function of flawed or substandard processes, lack of skills, experience, motivation and/or incentives (or disincentives)". The probability that social risk turns to business risk (rebound effect) depends on how well-informed the decisions are that the company makes and how diligently it operates (Graetz and Franks 2016). Mineral exploration companies are expected to be "good neighbours" to the local people, but it is also assumed that they will take responsibility for major global issues such as climate change  and futureoriented sustainability (Thomson and Joyce 2006). Earning local acceptance and good reputation as well as respecting the will of elected political bodies are necessities in all industries, not only in mineral sector. As well, these business principles are even more relevant in developing countries, where due to deep-rooted historical, structural, social, economic, and political reasons, conflicts related to natural resources are more common and severe than in highly regulated democracies (Conde 2017;Hilson 2012).

Conclusions
Risks are possible future outcomes resulting from decisions and operations made in the present. We have argued that business risk involves three social aspects-political, reputational, and local acceptability-that mineral exploration companies and the mineral industry in general may encounter. The political aspect is framed by the changing socio-political environment mainly at the national level. The reputational aspect refers to a company's past and present image among the public and to the legitimacy of the whole industry. The local acceptability aspect relates to the denial or withdrawal of the SLO or, in the case of mineral exploration, the SLE.
The probability of business risk increases if a company is uninformed or ignorant regarding legislation and the code of conduct applicable in a certain sociocultural and political environment. Also, the world is increasingly interlinked because of rapid news dissemination as well as interconnectedness via social media. The multi-faceted nature of business risks is an undeniable reality in the 2020s.
Funding Open Access funding provided by University of Lapland. This article was made possible with the funding from the European  Data availability Not applicable.

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Conflict of interest
The authors declare no competing interests.
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