An increasing level of stakeholder pressure has pushed the mining industry to re-think its approaches to environmental, social and governance responsibilities. Australian Mining speaks with some of the companies and organisations leading the transformation.
The mining industry is a critical component to a decarbonised world.
For it to remain essential, companies must adhere to external pressures to cut emissions and go beyond their responsibilities as corporate citizens.
A larger supply of critical minerals for net zero technologies will be needed for electric vehicles (EV), wind farm and solar power technologies if countries are to reach their emissions reduction targets.
Commodities including copper, nickel and rare earth elements will be important to this transformation, but growing stakeholder pressure means mining companies are needing to show a stronger commitment towards environmental, social and governance (ESG) requirements to retain offtake partners and supply chain stability.
ESG standards for mining include energy efficiency, emissions reduction and water efficiency, along with improved worker safety and community relations.
Stronger ESG standards are also making their mark on other major commodities in Australia, including iron ore and gold, two of the key resources exported from Australia.
Ernst & Young’s (EY’s) report, Top 10 Business Risks and Opportunities for mining and metals in 2022, reveals environmental and social risks will be the most significant factor for the industry to consider over the next year.
The report surveyed 200 global mining executives that gave their insights into the risks and opportunities for the industry in the year ahead.
“Investor and community relations have really changed,” EY global mining and metals leader Paul Mitchell says. “If you went back in time, community relations were down the flagpole and now it’s a factor that boards and CEOs ask questions about, and the importance of that role has increased.”
While the risks are present, there is value to be had by mining companies if they appease ESG demands.
Mining companies including BHP, Fortescue Metals Group and Rio Tinto have also partnered with organisations, including the Cooperative Research Centre for Transformations in Mining Economies (CRC TiME), to drive sustainable change in the industry.
CRC TiME has more than 70 industry partners across the mining and METS (mining equipment, technology and service) sectors, regional development organisations, community and first nations groups, state and federal governments and research partners, all looking to address complex challenges across mine closure and rehabilitation, which are essential aspects to ESG.
The organisation was founded through the Australian Government’s Cooperative Research Centre program in 2020 to improve trust between mining companies, regulators and communities.
This is being delivered through four research programs that cover regional economic development, risk evaluation and planning, operational solutions and data integration, forecasting and scale.
CRC TiME associate professor Bryan Maybee is part of the risk, evaluation and planning program, bringing experience in minerals and energy economics from Curtin University.
Maybee says there is a strong value incentive for mining companies to get their rehabilitation measures completed correctly.
“Responsible closure is one of the key factors that is used to measure ESG outcomes,” he says. “Instead of looking at a five-year or a 10-year mine life, we actually have to start looking at much longer timeframes, taking into account the life after the mine and think about the future economic use for the land.”
Without a social licence to operate, mining companies may be at risk of being unable to develop new mining operations across global jurisdictions.
If a mining company has an effective mine closure plan, government and community groups are more likely to accept a new development.
The risk, evaluation and planning program will aim to gel operational activity with mine closure planning, which requires changes to decision making in response to uncertainty.
This involves advanced evaluation frameworks for assets, real-time predictive models and planning tools to identify risks.
In June, CRC TiME initiated a study in collaboration with Fortescue, the University of Western Australia and Curtin University, which focusses on increasing plant nutrients in iron ore waste at Fortescue’s Chichester Hub operation in Western Australia.
The move towards “green” iron ore, which is mined using zero emissions is also a factor that Australia’s largest miners are having to consider.
“People want to know where everything has come from, so it is important to be able to show iron ore is mined in a responsible way,” Maybee says. “Green iron ore for example is becoming an important consideration in retaining customers for your product.
“Being a good corporate citizen being responsible as far as ESG goes, we actually have the opportunity to operate more sustainably.
“An operator that closes their mine responsibly and relinquishes it will build confidence with regulators.”
According to Maybee, stronger environmental outcomes can reduce community unrest related to an operation and therefore boost employee sentiment.
“By operating in an ESG responsible manner and embedding those factors into the way that we operate you actually can reduce risk, which means smoother, more productive and efficient operations,” Maybee says.
Solving the ESG puzzle
There are several innovative ways that mining companies can boost their ESG compliance outside of progressive mine closures.
Advancements in Industry 4.0 technologies have delivered real-time and predictive capabilities across the entire mining operation.
Envirosuite global head, mining and industrial, Matt Scholl says environmental solutions offer more than just compliance for mine sites.
“Any mining company that treats environmental management as a compliance issue only, will be outcompeted by the wave of progressive miners who are already using environmental intelligence to optimise their operations,” Scholl says.
Envirosuite recognises the importance of environmental management to ESG requirements for mine sites and has developed its environmental intelligence platform, which can optimise plans for weather risks and maintain compliance while reaching specific production goals.
Environmental intelligence uses data, artificial intelligence and other digital technologies alongside environmental and sustainability research to prevent any environmental impacts.
For example, the threat of changing weather patterns on an open pit mine could cause an unexpected shutdown. Envirosuite’s platform allows mine sites to develop an awareness of these risks before they occur.
“ESG performance covers a range of areas, however, a key pillar of ESG centres on environmental management,” Scholl says.
“ESG ratings are high-level indicators of whether companies have good measures in place to manage these risks.
“Envirosuite provides real-time and predictive capabilities to help mining companies manage environmental risks while enabling them to optimise production.”
SRK Consulting offers specialised services for the mining industry, including environment, community and mine closure services and water management.
The company was founded in 1974 and has grown to work on more than 20,000 projects worldwide.
SRK also uses data analysis to determine strategies for mining companies to comply with regulations and address environmental and social challenges for a more effective mining operation.
According to SRK principal consultant (geochemistry) Claire Linklater, stakeholder expectations for ESG requirements are growing.
“I think those topics are much higher on the social and political agenda and the regulators are starting to become much more informed in these areas,” Linklater says.
“The people that are financing mining projects pay much more attention to the ESG implications of what’s going on.
“Poor ESG management can cause mining companies reputational damage on the global stage and might actually impact finance for another project elsewhere.
“This is especially true of companies operating across multiple jurisdictions and continents.”
SRK can assess environmental risks in the early stages of a mining development to mitigate risks of poor environmental outcomes.
For example, identification of problematic waste rock volumes during exploration opens up the opportunity to either avoid mining those volumes, or develop waste rock dump designs to control the potential for impacts on water quality once a mine site is up and running.
By mitigating environmental risks before they occur, mine sites can save costly retrograde solutions down the line and prevent poor ESG ratings from stakeholder groups.
Stakeholders are painting a clear picture of where mining company ESG requirements need to be to receive support for new developments.
Through collaboration and the adoption of innovative ESG services, the mining industry will be able to move forward to deliver positive outcomes that are well-received by these groups.