Who are our most controversial miners?

The mining industry has always been one to attract controversy.

And the last few years, with developments expanding as commodity prices soar, have been no different.

Most widely targeted for its impact on local communities and the environment, the mining industry of 2011 was not immune from its share of criticism.

After studying the public fallout from the industry's growth last year, advisory firm Reprisk has put together a comprehensive report highlighting the most controversial mining companies of 2011.

The list is dominated by the usual suspects and mega projects, but also has surprising entries from smaller companies and rarer parts of the world.

And whilst it doesn't top the list, the sheer number and size of some of the mining developments down under mean Australia has attracted its own share of the industry's controversy.

Close to home

While the Reprisk report singles out companies and projects from most corners of the globe some Australian sites from our two biggest miners, Rio Tinto and BHP Billiton, made the most controversial list.

Reprisk said Rio Tinto came under fire in 2011 for health and safety conditions at its Mount Thorley, Hunter Valley, and Bengalla coal mines.

Some of those sites, particularly in the Hunter Valley, have also been the subject of recent unfair dismissal cases, which have also tarnished their image.

Apart from the health and safety concerns, Rio Tinto was also targeted by environmentalists for the risk of radioactive water spilling from the Ranger uranium mine.

Still in the Northern Territory, the company also drew criticism in 2011 for spilling 62,000 litres of petrol, leading to soil and groundwater contamination in Arnhem Land.

As a broader issue, Rio's uranium interests in Western Australia were also unpopular news.

Part of Reprisk's reason for conducting the study is to guage the health of our mining companies, and while more complex factors are at work than those mentioned above, the controversy did contribute to a significant slide in Rio's share price over 2011.

Starting the year around $85 a share, the company's performance slid right through 2011, ending on $60 dollars, a 25% drop over 12 months.

But Rio wasn't alone in attracting controversy over 2011.

According to RepRisk BHP Billiton also drew the ire of environmentalists and the public, primarily over health and safety and industrial relations concerns.

Reprisk marked the exposure of workers on a BHP Teekay shipping vessel as a bad moment for the company in 2011.

It also marked the long running industrial dispute between unions and BMA in Queensland as a sore point for BHP.

With the Construction, Forestry, Mining and Energy Union eager to get the public on side, the BMA battle has at times dominated the media agenda on the east of Australia.

Even 12 months on the CFMEU continues to release media statements and other promotional material to back its claims on the battle.

Global focus

While the Australian sites of Rio and BHP drew controversy in 2011, the bulk of the criticism was reserved for projects off Australian soil.

Of all the global miners, United States-focused Alpha Natural Resources topped the most controversial list after being targeted for the practice of mountaintop removal, a hot issue in the US.

The company also drew controversy for safety and pollution problems and allegations of fraud.

Second on the list was US-based gold and copper producer Newmont Mining, which drew controversy for its projects in Peru, Indonesia, Ghana, and the US.

According to Reprisk Newmont has been regarded as having a "poor international record on human rights and has been accused of masterminding numerous abductions of activists".

The company's developments in Peru and Ghana were both hit with violent demonstrations in 2011, and the company was also accused of significant pollution in the [African] nation.

Newmont rival Barrick Gold wasn't far behind on the controversy scale, with this bad press also focusing on projects in the developing world.

"Multiple claims of sexual abuse, beatings and murders have been linked to [Barrick's] security staff," Reprisk said.

"Those affected by environmental destruction, health problems, and loss of land and livlihoods have also achieved a media presence, publicising their complaints against the company."

Elsewhere Reprisk said Glencore International was one of the most controversial companies of 2011, with its "notorious secrecy" and environmental and human rights abuses bringing bad news.

"The company's activisits continue to be targeted for safety, environmental impact, human rights and tax issues," Reprisk said.

Still on human rights concerns, Reprisk said Freeport-McMoran Copper & Gold was "highly criticised" throughout 2011 for allegations of misconduct and poor employment conditions.

Along with Anglo American, two lesser known companies, Peruvian miner Compania de Minas Beunaventura and British group Vedanta, rounded out the top ten list.

Like their peers these companies drew criticism for conflict with local communities and environmental concerns.
Tough times

From all the companies on the top ten list, the common themes pervading most entries were transgressions on human rights and the environment.

And while sites in Australia and the US made appearances, the majority of questionable operations were located in the developed world in more riskier places to do business.

Most large miners also made an appearance, proving that such problems weren't isolated to one company, and weren't restricted to any operating size.

With the controversy making business harder in an worsening global environment, the controversy ratings will likely come as a wake up call for many of the industry's leading companies.

The 10 Most Controversial Miners

1 Alpha Natural Resources
2 Newmont Mining
3 Glencore International
4 BHP Billiton
5 Freeport-McMoran Copper & Gold
6 Rio Tinto
7 Compania de Minas Buenaventura
7 Barrick Gold (Equal Ranking)
9 Anglo American 
9 Vedanta Resources (Equal Ranking)
   

 

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