Here's how mining can reinvent itself for the modern age

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This piece originally appeared in the Daily Telegraph on 17 July 2017 2016

 

Tom Butler
CEO

A mining executive recently asked some students at a university careers seminar: “Which of you would like to work with cutting edge technology, deliver products that are essential to modern society, and at the same time contribute to lifting millions of people out of poverty?” A forest of hands shot up. He then asked who would like to work for a mining company – and every single hand went back down.

The mining and metals industry has extraordinary potential to improve human wellbeing and has done much to reduce its impact on the environment but, as this anecdote effectively shows, it remains a controversial concept for many.

In 2000, a group of far-sighted mining CEOs initiated a process to examine what responsible mining might look like. After dialogue with over 2,000 organisations around the world, the organisation I lead, the International Council on Mining and Metals (ICMM), was founded.

It adopted 10 principles that embed ethical business practices within the mining and metals industry to deliver real and sustainable progress for people and the planet. In subsequent years, these principles have been strengthened with additional commitments by our members.

On the environmental front, though much remains to be done, the mining industry has made great progress in recent years: managing its water, waste, and mine closure impacts much better than ever before.

But managing social impacts and securing social acceptance is increasingly  challenging, partly because society’s expectations continue to evolve rapidly, under the influence of the internet and globalisation. In the last century, mining and metals companies used to think it was enough to pay taxes, wages and dividends, and to manage environmental impacts.

Today, mining and metals companies need to think in terms of delivering on a ’social contract‘, which includes at a very basic level: doing good, not just doing well; actively engaging with partners to promote development and mitigate climate change; and taking proactive steps to protect human rights in both operations and the supply chain.

The development angle is key. Based on our own analysis, there are about 25 countries that are heavily dependent on mining, and most are developing countries whose pathway out of poverty will likely be through mining.

It is critical that these countries use their mining revenue to invest in infrastructure, and to diversify into other sectors. Mining and metals companies can and should play a role in these efforts by helping with skills transfer, capacity development, and by anchoring shared infrastructure.

This is very difficult to get right, but there are some good examples, such as Zimele, Anglo American’s community development company in Southern Africa, which since 2008 has helped create more than 30,000 non-mining jobs in new businesses, and about 40% of these are led by women.

The partnership angle is also crucial. This summer, the United Nations reports on the progress of the 17 Sustainable Development Goals (SDGs), which aim to tackle the greatest challenges facing us all, such as eradicating hunger and poverty and protecting our environment.

The last goal, SDG17, is key, as it stresses the importance of partnerships between governments, the private sector and civil society. It acknowledges that we need to “unlock the transformative power of trillions of dollars of private resources” if we are to deliver on sustainable development objectives. 

It was a great step forward for the UN to acknowledge the role of the private sector in this way, and ICMM and our members are ready and willing to play our part. One good example is Freeport McMoRan’s $500 million investment in a water plant in Peru to help clean up the effluent from a city of a million people, in exchange for the right to use a portion of the clean water.

Another successful example is the Extractives Industry Transparency Initiative, which is a partnership between governments, the private sector, and civil society, focussed on encouraging revenue transparency and accountability. So far over 50 countries have signed up.

However, such examples are still too few. Recently, a number of countries have revised their mining codes and fiscal frameworks, often with minimal dialogue and consultation with the industry. Irrespective of the merits of each case, the resulting investment instability is not going to help unlock those private sector millions, and the low level of trust between government and industry that this lack of engagement evidences is of great concern. All of us – whether it is governments, business, or civil society – need to get better at communicating and at understanding each other.

The UN’s global goals provide a once in a lifetime opportunity to work together to tackle the biggest challenges facing us all. My hope is that we will meet these challenges,  and that students in 2030 won’t be putting their hands down at the thought of a career in mining, as they will know that mining can help develop communities, as well as providing the metals that we all need for a sustainable, low-carbon future.