OZ Minerals, Hatch and Kirkland Lake Gold are taking their own unique approaches to sustainability, but all point to a greener future. Australian Mining looks at how they are driving change.
Meeting sustainability goals shouldn’t equate to ticking off marks on a scoreboard, but instead be internalised to induce change to a company’s system, culture and leadership principles.
This is the message of OZ Minerals managing director and chief executive Andrew Cole, who believes that with the above approach, no sector is going to get remotely close to where they need to be in creating a sustainable business.
All sectors now have less than 10 years to fulfill the 2015 sustainability development goals (SDGs) set by the United Nations General Assembly.
However, the call for no poverty, zero hunger, good health and well-being, quality education, gender equality, affordable and clean energy, decent work and economic growth as well as life below water and on land are a big ask.
What it will take, Cole says, is a company that has a genuine determination to operate for the greater good of society.
“While you might get short-term profits out of using the SDGs as a scorecard, it will destroy value in the long term,” Cole, speaking during the 2020 International Mining and Resources Conference (IMARC), says.
“We report against those metrics, we score ourselves and put it in our reports. I’d argue that alone, it isn’t going to create a change that we need to see.
“Short-term profits at the expense of overarching purpose will result in long-term value destruction for everybody.”
OZ Minerals is walking a revolutionary path at the West Musgrave nickel-copper project in Western Australia after deciding to develop it into an emission-free operation.
The project will include off-grid renewable power and processing solutions that include battery storage and diesel or trucked gas-fired generation, according to OZ Minerals’ pre-feasibility study for West Musgrave.
The company is around a year away from making a construction decision on the project and is using the time to redesign all aspects of the mine operation from the bottom up.
“The old ways of thinking and mining don’t work and (would become) too expensive to create an emissions-free operation, so it requires an awful lot of thinking to technically make that work,” Cole says.
“I think it’s really exciting, but it’s also really hard. You need the input (of) and collaboration with many, many parties to make it happen.”
Having the conviction in the mining sector’s ability to get to a net neutral impact position, and even a net positive impact area, Cole is practising what he preaches.
He believes that change comes from the top, as people in leadership positions move from the approach of compliance and accusations of non-compliance, to that of a greater purpose.
“I personally believe that we need to change the way we conduct business,” Cole says.
“We all need to be striving for a higher purpose, if you like, something that betters society and the planet and not just generate profits, which has historically been the core driver of business.”
While SDGs shouldn’t act as an administrative report card for companies, Cole acknowledges that they play a role in keeping organisations accountable.
In fact, they systemise the way OZ Minerals undertakes its business. The company doesn’t define its value by its net present value – a measure of value historically used by many organisations – but in terms of the value it creates for shareholders, employees, communities, governments and suppliers.
Hatch managing director – Australia and Asia, Jan Kwak, agrees that there’s a subset of the mining industry that does not treat SDGs as an opportunity to window dress or put out a glossy report on, but instead takes them very seriously.
“You can’t just imagine that you can buy social licence by building a school or hospital for the community. You can’t just treat it as a ‘dollar’,” he says.
“(Instead), we’ve got to figure out how to see these things as benefits and value centres in the way we construct our businesses.”
At a copper project in Indonesia, Hatch is incorporating sustainable thinking in each stage of the site’s development.
This is something that Kwak says wouldn’t have happened five to 10 years ago, but is proof that the resources sector is making its way to becoming more responsible and sustainable.
“We’re making shared values, land use, carbon footprint and residual social value important. We’re right in the beginning of a study where we still have a long runway in front of us to make a difference,” he says.
Kwak says the way the mining sector drives its projects shouldn’t be based on risk analysis as that is not the place to find opportunities.
Kirkland Lake Gold, for example, is identifying opportunities in and setting aside a significant amount of funds to reinvest into mine electrification at a time when gold prices are favourable.
Company president and chief executive Tony Makuch says Kirkland Lake has focussed on creating a safer working environment for its people.
To realise this, Kirkland Lake commissioned four 36-tonne electric underground haul trucks at the Macassa gold mine in Canada and is about to add a fifth vehicle to the operation.
The company is also investing a significant amount of funds in battery-powered loaders, while reviewing its energy use and hauling options at the Macassa underground mine, the Fosterville mine in Victoria and the Detour Lake operation in Canada.
“From a climate change point of view, the Macassa mine is probably the lowest greenhouse gas emitter – not just in the gold industry, but also the mining industry as a whole,” Makuch tells IMARC delegates.
Makuch believes that all members of the World Gold Council (WGC), such as Kirkland Lake comply with the WGC responsible gold mining principles – they bring together issues related to environmental, social and governance aspects of gold mining into one overarching framework.
He says there is a communication issue in the way the gold sector is communicating its responsible mining initiatives to the industry.
Makuch says this should not just include investors, but also the local communities, employees and industry peers.
“When you read through the responsible gold mining principles, there’s nothing there that we don’t do or we don’t want to do,” Makuch says.
“We comply with them, but it’s (about) how we set up our communication process.”
While OZ Minerals’ Cole believes that the resources sector has a long way to go in generating clean products right through the supply chain, it is moving towards a better place of responsibility.
After all, opportunities to do so are in the eyes of the beholder.
This article will appear in the February issue of Australian Mining.