Mining Sector Needs “Social Compass”

Although minerals are critical to a net zero future, ongoing environmental and social abuses cannot be ignored, urges Brumadinho community representative. 

The new Global Investor Commission on Mining 2030, which was launched Wednesday, aims to address systemic risks in the mining sector to ensure a just transition to net zero, mitigating negative social impacts and meeting growing global demand for critical minerals.  

“What we’re really looking to do here is to jointly develop a compass that helps [investors] have full clarity of what a sustainable and just mining sector looks like,” said Elisa Tonda, Head of the United Nations Environment Programme’s (UNEP) Consumption and Production Unit, Economy Division, speaking at the launch event hosted at the London Stock Exchange (LSE).  

The Commission is targeting sector-wide reform by the end of the decade, plugging gaps in global environmental and social standards as well as pinpointing investment opportunities with a focus on core themes: artisanal mining, child labour, automations and the future workforce, indigenous community rights, conflict and reconciliation, corruption, and the impacts on biodiversity due to climate change.  

It will further attempt to identify where existing ESG data can be consolidated, so investors and corporates can align.  

The investor-led initiative will be advised by UNEP and is backed by the Archbishop of Canterbury, Archbishop of Cape Town and the UN-convened Principles for Responsible Investment (PRI). Throughout its work, the Commission will be supported by investors, banks, insurers and mineral demand-side corporates.  

“The Commission’s consensus is to set out a vision of a path to 2030 that outlines how the mining sector can retain its social licence, building a social compact with local communities while meeting the needs of wider society and ensuring a low-carbon transition,” said Adam Matthews, Chief Responsible Investment Officer at the Church of England (CoE) Pensions Board and new Chair of the Commission. 

Past mistakes 

The launch of the Commission follows a number of mining-related disasters which have had huge social and environmental ramifications.  

Mining major Rio Tinto destroyed a 46,000-year-old heritage site at Juukan Gorge in Western Australia, and mining and commodities company Glencore was responsible for a wastewater spillage in southern Chad.  

Supporting the work of the Commission, Angelica Amanda Andrade, whose sister was killed in the Brumadinho tailings dam disaster, challenged BHP CEO Mike Henry – also in attendance at the launch summit – on the company’s progress in making amends with those affected by the 2015 Mariana dam disaster.  

“We need to start having penalties and fees for mining companies that continue to have human rights and environmental violations. If that doesn’t happen, then any action taken is just political – and what’s the point of that?” she said. “The climate transition cannot be an excuse for the allowance of continuing poor standards and lack of ethics.” 

It was recently announced that the case is going to UK court in April 2024. 

“The Commission needs to be absolutely clear that one of the key parts of our agenda is [the message that] there can’t be mineral demand met on the back of conflicts being created in many parts of the world,” said Matthews. 

“No metals, no transition”  

Understanding the potential impact of rapidly growing demand for critical minerals to develop the necessary clean technologies and solutions – like electric vehicles – to drive the climate transition is crucial, according to Matthews. 

“There’s an increasing scramble for minerals from many governments with net zero commitments and the sheer extent of mineral dependency is starting to dawn,” he noted. “It’s important that the Commission works with the sector constructively and pragmatically to understand the subsequent pressures of growing demand.” 

A World Bank report estimated the production of minerals like graphite will need to increase by nearly 500% by 2050 – the equivalent of nearly three billion tonnes – to fulfil sufficient upscaling of clean energy technologies and energy storage solutions. 

Max Reid, Senior Research Analyst at research company Wood Mackenzie, referred to the firm’s accelerated energy transition (AET) 1.5°C global warming by 2050 scenario, which estimates that around US$400 billion of additional investment in global critical minerals supplies is required by the end of this decade to achieve this temperature pathway. 

He noted a common adage cited by mining companies: “No metals, no transition.” 

Andrade was quick to counter. “No metals, no transition… but at what cost?” she asked.  

Setting new standards 

Prior to the official launch of the Commission, and building on the development of the Global Industry Standard on Tailings Management (GISTM) following the Brumadinho disaster, UNEP and CoE Pensions Board (as a representative of PRI) announced the formation of an independent Global Tailings Management Institute (GTMI).  

The institute will independently manage an assurance framework where tailings facilities can be audited and certified against the GISTM, promote awareness and adoption of the GISTM to mining companies, facilitate the sharing of knowledge on implementing the standard, and ensure maximum transparency of tailings facility details and auditing outcomes.  

“We all know that mining will be expanding to meet the demands of the low-carbon transition. It can only do so with the highest standards,” said John Howchin, Global Ambassador for the GTMI.  

“Increased mining is likely to lead to increased tailings waste. This institute will be vital to ensure companies can be supported to implement best practice and demonstrate to their host communities and governments that they are doing so credibly.” 

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