Mining needs to embrace its role as an agent of change for good – and tell the story of how it does this better – if it wants to continue to compete for investment dollars and talent in the future, according to International Council of Mining and Metals CEO Tom Butler.
Speaking at the International Mining and Resources Conference 2018 in Melbourne, Mr Butler said there was overwhelming evidence that mining was a force for social progress – especially in those often-poorer countries that were highly dependent on mining as an economic base.
The economic contribution of mining is widely understood. In the last five years ICMM members paid over US$100b in taxes, and currently directly employ more than one million people, with a job multiplier of up to 25 in developing countries.
“Such payments are important in a mining country like Australia, where mining’s production value is about 10% of GDP, but they are critical for the much poorer countries that are dependent on mining, including for example the 15 African countries that are in the top 25 of ICMM’s index of mining dependent countries. In these countries, this contribution will be key to them diversifying and achieving their development goals,” Mr Butler said.
“Beyond the economic contribution, our own research published earlier this year has found, based on independent indicators, that social progress over the 20 years to 2015 has been fastest in mining-dependent countries. That means that people in these 25 countries have become healthier, better educated, and enjoyed improved access to affordable and clean energy, water and sanitation at a faster rate than in other (non-mining) countries.”
It’s these social indicators that really indicate the power of progress that can be generated by mining. And with a flood of money flowing to sustainable investment funds, mining – done with the right set of principles – can be an investment of choice for ethical investors.
The movement of ethical investment to the mainstream is another shift that mining is adapting to, Mr Butler said. The forces driving that change are similar to those driving fundamental shifts in the way mines operate – changes in community expectations, and technology.
“Twenty years ago, it would have been hard to imagine that Apple would one day be a bigger driver for ESG improvements in mining than Greenpeace, or that investors would demand more accurate data on social performance than Oxfam,” Mr Butler said.
“Today what we see is a convergence between the demands of consumers, of communities and the NGOs who advocate for them, and of investors. This convergence is reflected in for example the number of funds applying Sustainable and Responsible Investment criteria, which the Economist commented recently went from $13 to $23 trillion in only 4 short years.”
Mining has a complex relationship with climate change. Coal is being challenged as an energy source because of its high CO2 emissions, while large supplies of different metals will be critical to support collar, wind and battery technologies if the world is to meet global emissions targets.
“To give just one example, the Bank predicts we will need 20mn tonnes of copper alone for just those three technologies, to meet the 2 degree scenario. That is roughly a years’ worth of total global supply,” Mr Butler said.
“But it is not sufficient for us to say that; we also have to make sure that we are taking all possible steps to maximise the use of our own renewable energy, and that our operations are as energy efficient with as low a carbon footprint as possible. The industry has started to do that, with some notable examples, but it still has a long way to go.”
Mr Butler said the way forward for mining is for the industry to be clear about what it stands for, and say it clearly, in a world that is looking for more than dollars from its biggest industries.
“The mining sector has a critical role to play in the sustainability effort. We can choose whether to lead or follow in that. I believe that the leaders will be rewarded with access to finance, projects, and markets on more reasonable terms,” Mr Butler said.
It’s also time we told our story better. People outside our sector largely don’t understand our contribution, the important role we will have to play in decarbonising the planet and in helping countries develop. And telling our story better will help us attract the next generation of talent that we need so crucially.
“And it’s time to embrace the new social contract – which means re-thinking our models for partnership and how we collaborate, and how we engage with consumers, civil society and our host communities.
“If we can do those three things, we will be well equipped to face the future.”
For more information visit https://imarcmelbourne.com/
The International Mining and Resources Conference is Australia’s largest mining event. Bringing together over 6,000 decision makers, mining leaders, policy makers, investors, commodity buyers, technical experts, innovators and educators from over 90 countries for four days of learning, deal-making and unparalleled networking. IMARC will run from 29 October to 1 November 2018 at the Melbourne Convention and Exhibition Centre.
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