Sustainable mining must be the new normal to boost earnings and convince a skeptical public about the industry’s importance to combat global warming as the world enters a metals trade war, Ross Beaty, Rob McEwen and former Conservative Party leader Erin O’Toole say.
Mining luminaries Beaty and McEwen stressed the importance of tapping renewable energy, eliminating tailings dams and slashing water use as proposed at Equinox Gold’s (TSX: EQX: NYSE-AM: EQX) Greenstone mine in Ontario and McEwen Mining’s (TSX: MUX; NYSE: MUX) Los Azules copper project in Argentina. They spoke on a green metals panel at The Northern Miner’s International Metals Symposium in London Dec. 1-2.
“At the end of the day, it affects your bottom line,” said Beaty, chair of $3.8-billion market cap Equinox Gold. “If you look after the environment, if you look after your employees, if you look after your communities, you can mine more cheaply and more effectively with fewer disruptions. It’s just simple good business.”
Fellow panelist Nicole Schwab of the World Economic Forum echoed the sentiment with a forecast that critical mineral demand may rise four to six times by 2040 while 16% of mines with those minerals are in water-strained areas and only 5% of miners have set biodiversity targets. Half the world’s GDP is at risk from the loss of nature because industries depend so much on it, she said.
‘Unlivable planet’
“We are suffering from CO2 tunnel vision,” Schwab said of a fixation on just cutting emissions instead of also saving flora and fauna. “If we look just at the energy transition, we’re missing the point, because we may achieve those targets, but we are going to be on an unlivable planet.”
Billions or trillions more dollars are poised to fuel the mining industry as governments pivot to fight climate change. But companies face a slew of challenges after decades of mine accidents and environmental degradation have slammed the sector’s public image. Some miners complain they can’t afford to be sustainable while critical minerals leader China pollutes seemingly unpunished. And now United States president-elect Donald Trump threatens a global trade war that could cut metal prices and snarl supply chains.
Yet, Canadian miners could benefit from sustainable operations creating their own added value, said O’Toole, a trade lawyer who’s now president of the North American unit of Paris-based business intelligence firm ADIT. The global rules-based liberalized trade order is morphing into a new stage of interventionist tariffs and sanctions, he said.
“Trade is being managed in a range of ways through tariffs, depending on what president-elect Trump tweets on a certain day,” O’Toole said. “But also, you’re going to be seeing managed trade through carbon emissions.”
BRICS challenge
The BRICS nations, led by the namesake Brazil, Russia, India, China and South Africa, but also including Iran, Egypt, Ethiopia and the United Arab Emirates, are considering their own currency to challenge the U.S. dollar. They’re also trying to sidestep the G7’s rising environmental, social and governance (ESG) standards for mining.
“There has to be some sort of policy direction to curtail that and it’s going to be sanctions,” O’Toole said. “It’s going to be carbon, border adjustment tariffs, to recognize that if another country is not pricing in carbon or not reducing emissions, we’re not going to let their products circumvent our own.”
Still, Canadian miners often say it’s pointless to change ways of generating electricity when they’re a drop in the pollution bucket compared to some other nations, Beaty said.
“What can we do in Canada? We say that a lot, but actually, everybody can make a difference, absolutely everybody. And at the end of the day, if everybody does make that difference, big picture changes happen.”
However, junior mining companies often say they can’t afford sustainability because they aren’t making money yet, according to audience member Jamie Strauss, founder and CEO of Dorset, U.K.-based ESG technology company Digbee. When should they start? he asked.
“Immediately,” McEwen said. “It’s about social licence. Will the community accept it? This discussion is about the changing environment that you have to meet certain standards before you’ll be allowed to build a mine, to operate a mine and provide the supplies.”
1,000 to one
Beaty was less sure about juniors, saying 1,000 early-stage explorations fold before one mine is ever built. But project developments should adopt sound environmental policies, he said.
“I wouldn’t obsess too much about it, but when you’re more advanced, immediately, to Rob’s point, you should start thinking about how you can do this the best way versus not such a good way. And there are choices. Make those good choices, think about it, reflect on how you can do things with as little footprint as possible, as little water use, as little damage to the environment as possible.”
The industry is also concerned there are too many ESG standards and bodies with no clear rules and routes for companies to follow, according to conference attendee Theresa Sapara, co-lead at EY’s Americas Mining and Metals Centre of Excellence. How can the industry reduce ESG reporting redundancy? she asked.
The International Sustainability Standards Board is trying to align with the Taskforce on Nature-related Financial Disclosures while the World Economic Forum is providing a framing to converge metrics for the investment side as well as natural capital accounting, Schwab said.
“Obviously each country is also moving at different speeds,” she said. “And kind of in slightly different directions and we know that’s a challenge.”
Beaty agreed there’s a push to make it easier for mining companies to understand what is needed and what they can do. But he said the answer is even simpler.
“There’s sort of one way to do things, and you shouldn’t necessarily look at specific regulations to figure out, well, what can I get away with? How can I avoid this problem or that cost? You just try to take the high road and do things right, because if you do things right, you’re going to satisfy all the regulations. That’s how we try to work.”
What climate Fight! Unlivable planet? Are these people nuts? The climate nonsense is a scam manufactured by EU politicians pretending science is behind them, rather its political, no science at all. Reality smacks truth here as your own thermometer clearly shows. Miining folks following this malarky will be hurt with collapse of the climate ruse.
|It is super disappointing to see these ivory tower, captured, ‘industry leaders’ perpetuating the climatism ideology. Why you ask? Because there is big money in it for them -taxpayers’ money, in the form in billions in government handouts. And if they want money from the BlackRocks of the world they better toe the line, too. They don’t care about the climate, the working class or the poor. They just want more money and to be part of the global elite club.