Rio Tinto chief exec for coal and copper, Jean-Sébastien Jacques, has called for greater transparency in mining, and outlined the miner’s bullish stance on copper.
Speaking at today’s Bloomberg Address in Sydney, Jacques said “licence to operate issues make or break mining companies in the future”.
“The weight of increasing stakeholder expectations can cost a company like ours time and money if not managed well.
“Society demands more and more transparency, openness and rigour in environmental performance and impacts.
“There is no doubt it is getting harder to bring new projects to life, brown or green field, and the winning mining company of the future will manage licence to operate issues with excellence.
In terms of coal, he stated that while it is “facing a PR challenge…it will be part of the global energy solution for years to come”.
However he fully acknowledged the issue of climate change, stating Rio Tinto “wants to be part of the climate change solution”.
Yet he added, “Without coal – there’s no steel. That’s steel for new schools, mass transport infrastructure and even renewable energy.
“Every wind turbine you see is a product of the coal, copper and iron ore sectors – our industry is an integral part of the solution.”
He used the Address to outline Rio’s current stance on the market, admitting that there is overcapacity across many commodities due to an overinvestment in infrastructure and operations over the last five years in order to take advantage of growing Chinese demand, but that there is still opportunity to grow.
“[We knew] the Boom was never going to last forever, but then again neither will the bad times,” Jacques said.
“We are now faced with a transitional period as markets come to terms with supply-demand imbalances; while we are seeing some current market volatility we run our business on long term considerations.
“With this in mind, I still see plenty of opportunities for us miners.”
Jacques discussed ongoing growth in China, agreeing with Rio Tinto CEO Sam Walsh’s seven per cent growth point for the nation.
“We do expect a slow in Chinese growth [compared to previous growth rates], but even seven per cent is still massive, and while we’re not sure on the future rates of growth we’re confident it won’t be zero.”
He said the key was in not diversifying too heavily.
“Diversifying for the sake of it will devalue the quality of assets.
“I believe there will be a shift toward a multi-specialist model; by this I mean we may start to see less of a push towards diversification in the development and growth of mining companies’ portfolios.
“In some ways, those companies with less diversified portfolios right now, as long as they run tier one assets, are performing better.”
In terms of its top tier assets, Jacques focused on Oyu Tolgoi in Mongolia, which has encountered a rocky road in getting into production.
When asked if he believed the site was worth the hassle, Jacques stated: “No doubt, it’s bloody awesome.”