‘Unless a wide portion of the industry embraces responsible practices, the reputation of this industry will not change’
by Richard Roberts, Editorial Director, Beacon Events
Higher international performance and conduct thresholds are vital to the mining industry’s future even if markets remain largely indifferent about a “level playing field that does not disadvantage responsible producers”, according to International Council on Mining and Metals (ICMM) CEO, Rohitesh Dhawan.
Speaking in Australia after the public release of the council’s updated Indigenous Peoples Position Statement, Dhawan said work continued to streamline a plethora of industry operating codes and standards and bring in independent, multi-stakeholder governance to oversee the new rulebook.
“Standards hardly get anybody’s heart racing but they are the absolute bedrock of our industry’s commitment to operating responsibly,” he said.
“We have this bizarre situation globally where there is a portion of the industry that follows too many standards, and as a result, is bogged down in bureaucracy, cost, auditing, and then we have a very large portion of the industry that follows no standards.
“Too many standards for some, no standards for many other parts of the industry.
“And we think that the way to resolve that is to bring a set of the existing standards [ICMM mining principles, World Gold Council Responsible Gold Mining Principles, Copper Mark and Towards Sustainable Mining] together into a consolidated global standard that … [provides] an on ramp for any operator to embrace responsible mining practices.
“Taking the best of those four, building a consolidated standard, having an independent, multi-stakeholder governance, clear assurance, and making that available to any mine in any country, producing any commodity.
“We know that unless a wide portion of the industry embraces responsible practices, the reputation of this industry will not change, and that’s why this effort to consolidate standards is so vital.”
Dhawan said ICMM members, “over half of the mining industry, by market cap”, had signed up to the Global Industry Standard on Tailings Management, or an equivalent, and he was proud of the “decades-long engagement and commitment and leadership that the most responsible miners have shown on” biodiversity and nature, embodied in the council’s Nature Position Statement posted earlier this year and its direct role in the Task Force on Nature-related Financial Disclosures (TNFD).
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“Arguably there’s no other sector that has been as much on the front foot as the mining industry has on this topic, which is why when we made this commitment earlier this year, which essentially was centred on managing our own impacts but also influencing our value chain, the landscapes in which we operate, and the wider economic system, to transform to a nature positive future,” Dhawan said.
“What our commitment said was we will achieve at least no net loss of biodiversity at our sites by closure. Now that’s easy to say. It’s bloody hard to do.
“But that is the level of commitment that companies have made to make sure that we are having the minimum possible direct footprint we can.”
Hoping for the best
Dhawan said “it’s a real problem that we don’t have a mechanism to reward responsible producers and differentiate between products that are produced in a responsible way and those that are not”.
Suspension of nickel production in Australia and other places while Indonesian output surged, and struggles for cobalt, rare earth and other producers outside China-backed channels, “tells us that the market currently does not sufficiently reward good practices when it comes to responsible production”.
“It tells us that if there’s a clean but slightly more expensive way to do something and a less clean or less responsible and cheaper way to do something, there will be enough people choosing the latter, which means those that choose to do the right thing will often lose,” Dhawan told the Melbourne Mining Club gathering.
“What can we do about it?
“Typically, the answer tends to be a green premium – essentially a higher price for commodities that are produced with high standards compared to those that aren’t.
“We as an industry cannot and will not drive a green premium because one thing we are absolutely committed to doing in ICMM … is to make sure we never do something that is anti-competitive.
“I still hold out hope, but it’s diminishing hope, that states will be able to get their act together to make sure that there is a minimum floor of responsible production below which mining is not allowed to take place.
“The reason I have hope is, for instance, that a few months ago the UN secretary-general Antonio Guterres created a panel to advise him and the UN on how to think about a just energy transition, especially as it relates to critical minerals. I’m on that panel and I see governments taking this very, very seriously and wanting to come to some form of global consensus on the principles that we will all follow to make sure that there’s a level playing field that does not disadvantage the good producers.
“But imagine doing that in the current geopolitically fractured, polarised world that we are in.
“My experience tells me that even when states have the chance to take the right actions for whatever reason, they aren’t able to or willing to do it.
“And I’ll give you just one example of that. Since 2002 … ICMM has had a commitment that our members will not mine or operate in World Heritage sites. These are parts of the world that are simply too precious to risk damaging by operating there. And so for 22 years no ICMM member has operated in the World Heritage Site.
“But I can tell you right now there are many other companies that have operated in World Heritage Sites, and those companies that are operating there may be committed to high standards, but in many cases won’t be committed to high standards. So the outcome for those sites is worse than if a company that is truly committed went in and operated there.
“I spend a non-trivial portion of my waking life trying to convince different states to legislate so that mining cannot occur in World Heritage Sites, but I’ve had very little success in convincing states to do that.
“So a simple ask like asking states to ban mining in World Heritage Sites has not gone anywhere.
“What is, then, the hope that states will truly grasp the scale of this challenge and ensure a level playing field so that responsible producers from responsible countries like Australia are not disadvantaged?
“I have hope, but diminishing hope, which is why I think it may be a market solution that we need the most.”
Dhawan said the ICMM’s latest Indigenous Peoples statement aimed to clarify “the role of the state alongside the role of companies because in the last few decades, and particularly in the last few years, there has been a real muddle in whose responsibility it is at different stages of the process to take certain actions”.
“In most parts of the world the natural resources under land are in the hands of the state to manage for the common good of all its citizens,” he said.
“Now with that in mind it is the state that will often have to make very tough choices about which project goes ahead, where, when and how.
“Independent of a state’s obligation to seek and obtain the free, prior and informed consent of indigenous communities, ICMM members are making a commitment to obtain agreement for any anticipated impacts on the rights of indigenous peoples.
“What I hope will happen as a result of this is that we gain the confidence of our indigenous partners that with human rights due diligence at the very heart of what we do that we are approaching this from a sense of equity, from a sense of fairness, to reach an agreement, which could mean that there are parts or wholes of projects that don’t proceed, but it could also mean that they proceed on the basis of a joint agreement on how impacts will be managed.
“A state’s authorisation for a project means that mining can be done.
“Your ability to achieve broad consensus tells you whether it should be done.”
Rohitesh Dhawan is a keynote speaker at Resourcing Tomorrow, Accelerating the Energy Transition, in London from December 3-5.
