ESG targets

Operationalising ESG

Epiroc constantly pioneers new initiatives to make a BEV reality more accessible and efficient for the mining industry.

Epiroc and MineRP have innovated a digital solution that gives ESG measurable value, enabling mining companies to more precisely and accurately plan, monitor and report on their ESG performance.

According to Epiroc company MineRP, many mining companies are caught between making sincere, yet unfounded environmental, social and governance (ESG) promises and creating vague, after-the-fact ESG reports.

If a company doesn’t have the processes in place to plan and then monitor its ESG deliverables at a detailed level, how can it expect to deliver an accurate, evidenced ESG report?

This is the conundrum that MineRP is trying to solve.

As a respected software company, MineRP is strongly placed to deliver on this objective, leveraging its reputation, technology and domain expertise to enhance ESG monitoring and analysis in the mining sector.

For mining companies keen to gain greater clarity around their ESG performance, MineRP urges them to operationalise their ESG commitments and infuse ESG into the way they plan, strategise, operate and report.

“Operationalisation simply entails baking ESG commitments into detailed mine plans, so that even small changes to plans or standard operating procedures can be assessed proactively, keeping the company on track ESG-wise.” MineRP vice president marketing Empie Strydom told Australian Mining.

Mine plans should be optimised for production, profit and ESG targets, while every planned activity should take place with ESG outcomes in mind.

This way when the time comes for a company to prepare and release a report – whether it be a quarterly, half-year, annual or sustainability report – it has the data and insights to deliver the honest, transparent ESG reporting that shareholders need to see.

Optimising ESG monitoring isn’t just limited to infusing ESG into day-to-day operations, but also redefining the concept of value.

This is where MineRP’s Triple Balance Sheet enters the picture.

“Through our platform, we enact a company’s strategy through three lenses – the science of mining, the business of mining, and the conscience of mining,” Strydom said.

“The conscience of mining recognises that ESG is intangible and doesn’t intrinsically have a currency, therefore making it difficult to transact or enable. But if we can give ESG a currency, it can be transacted through balance sheet and income statement fashion.

“Hence the Triple Balance Sheet.”

Whether it be the share price, market capitalisation or net present value (NPV), there are several metrics to understand the value of a mining company. But does this value remain the same when its ESG performance is factored in?

Strydom used an example to elaborate on the idea.

“I have three mines – mine A, B and C – and each one of those produces one ounce of gold,” he said.

“But how about if each of mine A, B and C had a different carbon footprint – mine A has a minus-50 carbon footprint, mine B has a net-zero carbon footprint and mine C has a plus-50 carbon footprint.

“How would the market appraise each of these companies? More specifically, would you be able to measure this difference in the price the market would be willing to pay for an ounce of gold from that company, or the directly attributable costs associated with each produced ounce?

“Research shows that mines with more mature ESG practices do not only win the admiration of investors and other stakeholders but are demonstrably more productive than their peers.”

Under the Triple Balance Sheet premise, when a mine has a negative carbon footprint, because it’s ESG performance is favourable, there is now a currency linked to each ounce of gold it produces. The company can then use that to trade.

ESG currency would work the other way for a plus-carbon mine, where a tariff such as carbon tax could be imposed on the company or operation due to their plus carbon footprint.

Strydom refers to MineRP’s three core lenses – the science of mining, the business of mining, and the conscience of mining – to further explain the Triple Balance Sheet.

The science of mining showcases the capability of the MineRP platform.

“Through the science of mining, we consolidate all mining activities onto one platform,” Strydom said.

“Here we are linking mine planning to execution through helping our clients to formalise and digitise their standard operating procedures, and doing that at a very granular level.”

Companies are then able to derive a smart bill of resource (BoR) which enables them to link their financials to their mining activities by assigning the right resource or equipment (as seen through technical, financial and ESG lenses) to a particular task.

This can be pre-planned or done in real-time, making the Triple Balance Sheet a dynamic platform that enables mining companies to make changes on the fly.

Through MineRP, Epiroc is reconceptualising ESG, providing mining companies with the tools to accurately monitor and analyse their ESG performance, leading to more honest and transparent reporting, and happier stakeholders all round.

This feature appeared in the June 2023 issue of Australian Mining.

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