Responsible Mining

Key Principles for Industry Integrity

Sara Bice

• Publisher: Routledge
• Year: 2016
• eBook ISBN: 9781317658146
• Topic: Business
• Subtopic: Business Ethics
• Index: Business

Mining can have negative environmental and social impacts, but can also be responsible. However corporations have little impetus to act responsibly without being held to account by an informed and active public, and by strong institutions and governments which not only create but also enforce legislation. Yet what does such practice look like?

This book shows how the concept of responsible mining is based on five key principles or pillars: holistic assessment; ethical relationships; community-based agreements; appropriate boundaries and good governance. Together, these pillars circumscribe global best practice and innovative ideas to catalyse new and improved approaches to a sustainable mining industry. The author argues that these practices are critical to the future viability and social acceptability of the global mining industry and draws on a range of case studies, including from Australia, Canada, Central Asia, Papua New Guinea and west Africa.

The role of informed communities, governments and civil societies in holding the industry to account to achieve responsible mining is assessed. The book explains how companies judge what effects they may have on communities and investigates ways to improve the prediction and prevention of such impacts and to provide clearer, more meaningful public communication. It offers alternatives to common 'corporate social responsibility' practices in which mining companies adopt roles which are usually the remit of government. Ultimately, it looks to the future, exploring the essential pathways towards responsible mining.

1
Introduction

Each year more than 4.2 billion tonnes of minerals are extracted from the earth (International Council on Mining and Metals 2012). This is enough material to construct 4,200 Eiffel Towers,¹ covering an area greater than China’s Forbidden City.² From the Amazon Basin to the Australian Outback, from the Rocky Mountains to the Democratic Republic of Congo we are ceaselessly and intensively depleting our finite resources. Meanwhile, global goods consumption is on the rise, fuelled by a rapidly expanding middle class, many of whom are exiting poverty for the first time in history. In India, for example, over 291 million people will transition from economic destitution into a consumer class by 2025 (Ablett et al. 2007). Similar shifts in China mean that up to 330 million cars could jam the Asian giant’s streets by 2020 (Fangfang 2013). Despite economic downturns in developed, Western countries, personal consumption continues apace. In 2012 Americans spent US$1.25 trillion on household equipment, recreational vehicles, cars and car parts alone. These consumer products require raw materials – many of them mined – and energy to fuel production and further consumption. Demand for coal is up globally in all nations except the United States where it is being swapped out for cheaper shale gas (International Energy Agency 2012).China’s demand for iron ore propelled record trade levels in 2011 (OECD 2012). Our appetite for modern life and the resources which sustain it is rapacious.

Within the next 200 years, the minerals on which we now rely will be mostly dug up and used (Moyer and Storrs 2010); burned for fuel, lying in long-forgotten rubbish heaps, shining in an urban terrain of high-rises. But the landscape is not all bleak. If we accept that mountains must be disappeared into basins, that ores must be extracted, dirt turned to gold or girders, we can also expect that it is done in a way which is more palatable. Mining can be responsible. It seems like the greatest irony. And it is all too easy to say, ‘But it’s bad. We must stop it. We must oppose it.’ To do so is to deny the modern lives we lead. This book, therefore, does not call for an end to the mining story, but a new and better narrative. A pragmatic but conscious and ethical approach.

Every material aspect of our daily lives is facilitated by mining. Yet many of us never realize, or prefer to leave unacknowledged, the deep connections we hold to an industry which regularly destroys pristine environments, consumes resources which can never be replenished and shapes the prospects of future generations. To reject mining is to reject modern life. To accept it is to acquiesce to certain environmental, social, and economic compromises.

Mining can be responsible. But corporations have little impetus to act responsibly without being held to account by an informed and active public, by strong institutions and governments which not only create but enforce legislation. To do this, corporations, the public, our institutions and governments must understand the possibilities and perimeters of responsible mining. Responsible mining must be comprehensive in its approach and in the concerns it encompasses. From exploration to closure, from environment to community, from corporate governance to financial transparency, this book articulates five pillars to undergird a viable, ethical and accountable mining industry. Taken together, the pillars of holistic assessment, ethical decision-making, community-based agreement-making, appropriate boundaries and good governance hold the potential to transform the mining industry and its impacts. So, what does responsible mining look like? And what should we expect?

The lay of the land

Mining is an exercise of astonishing scale. Your average mine pit is constructed in a series of ‘benches’, each about the height of a five storey building, stacked in threes or fours with safety benches and haulage roads running along crests in between. Carved from rich, brown earth these benches appear supple and circumfluent, looping down to the grey pit floor. Their gentle grade and terraced edges belie the careful engineering which makes them possible. Each slope is painstakingly planned and measured by engineers speaking a tribal language of haulage types, ore body varieties, overburden amounts and local geology. The world’s largest mine pit at Bingham Canyon, Utah is 4.4 km wide and 1.2 km deep. If it were a football stadium, it could seat nine million cheering fans. The roar would be deafening. From above, a mine pit appears as a still, contemplative organism, a great grey-brown amoeba alive with a cellular thrum of human activity. It is so wide, your eyes must first work to take it all in, to grasp the expanse, before waking up to specks of movement. The pit is dotted with busy, yellow machinery. Excavators with buckets the size of a small house shift tonnes of dirt, scoop after colossal scoop. Dump trucks carry hundreds of tonnes of overburden along the haulage roads, up and out. It is only when one of these trucks rumbles nearby that you begin to grasp the size and depth of the pit. The truck, which in the pit appears like a childhood Tonka toy, rolls on tyres two lanes wide and more than twice as tall as your average miner, each costing more than a Mercedes Roadster. The drivers of these gargantuan gas guzzlers are specially trained and usually earn six figures a year. Big pits mean big business.

The global mining industry generated record profits of US$133 billion in 2011. The top 40 global miners paid out dividends in excess of US$32 billion (PricewaterhouseCoopers 2012), more than the purchasing power parity GDP of many small-to-medium sized countries (US Central Intelligence Agency 2013 ).³ Mining workers in Australia, a country home to one of the world’s largest and longest contemporary mining booms, earn average weekly salaries over US$831 (AU$1,000) more than other workers. In the Land Down Under, mining is a cornerstone of the economy, representing the number one export industry, contributing an estimated seven percent of GDP and comprising almost 2,500 firms paying out US$14.97 billion (AU$18 billion) in wages to 180,000 individuals (Australian Bureau of Statistics 2010; Minerals Council of Australia 2012).

Yet Australia is unusual in its position as an economically developed country whose mining industry remains a primary economic pillar. Although economists argue the Aussie boom is slowing, production and export will continue for years to come (OECD 2013). Australia’s assuredness in the viability of its mining industry is based both on rising global demands and on confidence in measures of the remaining quantity and quality of resources, especially iron ore (Geoscience Australia 2013). Other developed nations face depleted resources and dwindling ore quality. Between 1900 and 1960, American mines accounted for between 30 to 40 percent of total global mining (International Council on Mining and Metals 2012). Today, mining in America accounts for less than 10 percent of the global mining industry, extracting mainly coal. The US’ neighbour to the north was also once a dominant miner, offering a wide variety of resources. Despite a declining contribution to total global mining output, Canadian mining is persistent and contributed about eight percent of the country’s GDP in 2012 (Statistics Canada 2013). Yet explorers remain hopeful, spending an estimated US$134.14 million (C$154 million) searching for minerals in 2010. The investment may pay off, as scientists believe they have identified one of the world’s largest, untapped gold-copper resources in British Columbia (Kosich 2010).

The slow-down in developed countries’ mining industries is partly due to declining quality of remaining resources. In the United States today, it takes several hundred metric tonnes of ore to produce one metric tonne of copper, resulting in mountains of waste rock up to 400 hectares across (United States Environmental Protection Agency 2012). Since the Great Depression, the amount of waste necessary to produce US copper has increased because the high quality ores – those bodies of rock containing the greatest mineral concentrations – have been tapped, leaving mostly ‘low grade ores’ which hold lesser amounts of minerals, harder to extract (Mudd 2009). This means more rocks must be broken, more chemicals used, more ore processed and more waste produced to realize the same amount of materials. The stories are similar for minerals including nickel, gold and zinc (International Council on Mining and Metals 2012). And these are only the resources most people recognize by name.

Rare earth minerals in which there was previously limited interest, such as europium, erbium, gadolinium and terbium, are today in high demand. While the names may seem otherworldly, these are the very elements with which we are most likely to have daily contact. They allow our iphone screens to function, provide the finish for eyeglasses and mirrors, facilitate the miniaturization necessary for our computers, and make our light bulbs more energy efficient (Haxel et al. 2002). These minerals are in ubiquitous use across every continent, yet an estimated 95 percent of global supply comes from China (Tse 2011). Following the Global Financial Crisis, China implemented export limits on its rare earth supply, restricting worldwide access. Not only did China’s move cause prices to skyrocket, it forced Western governments to question their reliance on a foreign provider as the source of materials essential to maintaining their military and technological dominance (Brennan 2013). Mining is not just geological. It is geopolitical.

Mining is also no longer bound to the earth. Miners know terrestrial mineral resources are limited, and their attention is turning to new technologies and new frontiers. Our ocean floor is littered with untapped resources. In 2011 the Papua New Guinean government granted Canadian mining company Nautilus Minerals Inc. the world’s first deep sea mining lease (Roche 2014).With the approval of the International Seabed Authority, Nautilus plans to use underwater digging and vacuum technologies to suck mineral rich ‘polymetallic nodules’ to the surface. Although knowledge of these minerals’ locations is not new, it is only now that the technology exists to remove them cost-effectively. Defence behemoth Lockheed Martin, for example, will adapt its aerospace and underwater technologies to extract resources from approximately four kilometres beneath the ocean’s surface.⁴ Proponents argue the deep sea will provide the answer to environmental and social concerns about mining by taking the process away from the communities and landscapes it effects (Roche 2014). Yet the questions raised by mining an area which is inaccessible to most and mysterious to many are substantial. Some answer that space will provide the solution, with metal-laden asteroids floated home to earth, perhaps in a parachuting extravaganza à la Felix Baumgartner (Sonter 1997). Extraterrestrial mining smacks of science fiction. Yet NASA scientists debate its costs, not its possibility (Cohen 2013). The prospects seem endless and are equal only to our imaginations and to our neverending thirst for convenient, high tech, comfortable, beautiful, modern life.

Mineral wealth and its discontents

Back on land, the contemporary ‘Eureka!’ is being shouted most often in remote regions previously unreachable to mining technology. Today, developing countries generate more than one-fifth of total global mineral production (International Council on Mining and Metals 2012). Europe (excluding Russia) and the United States generate only 3.5 percent and 4.2 percent, respectively, by comparison. The shift of mining activity from the developed to the developing world makes mineral extraction an increasingly important component of developing economies. In countries like Mongolia, recently discovered mineral deposits hold the potential to boost foreign direct investment well into the billions of dollars (Edwards 2013). In neighbouring Kazakhstan and the nearby Kyrgyz Republic, mining leads foreign direct investment, encouraging stronger connections to the international community than ever before (Deloitte 2013). In the developing countries home to the necessary mix of geology and climate, the figures estimating potential mineral wealth are staggering, but these figures come at a cost.

‘Blood diamonds’ famously fuelled civil war in Angola (Orogon 2004). The Democratic Republic of Congo’s estimated US$24 trillion in untapped mineral wealth has not catalysed health and development (Morgan 2009). Instead, it drives conflict and greed. The average Congolese lives only 47.8 years and the country ranks at the very bottom of global corruption indices (Transparency International 2013). For Mongolian herders, the cost of mineral wealth is measured in water and history. In an area which receives an average annual rainfall of 80mm per year, herders worry the country’s largest proposed mine will soak up or contaminate this sparse resource. They worry that the presence of an open pit mine and all its heavy equipment accoutrements and safety exclusion zones will defeat their nomadic way of life and endanger their indigenous culture and livelihood (Oyu Tolgoi Watch et al. 2012). Theirs is a story heard too often.

Downstream of the Tolukuma Gold Mine in the steamy, mountainous jungles of Papua New Guinea, Fané Village is hidden from interlopers, and immune to the passage of time and all its changes. Fané consists of about six thatched huts, some larger than others, set widely apart on a large patch of cleared dirt. A community garden rests along a verdant slope behind the huts. On any given day, children will be busy building forts in the dirt, their chickens plucking after them, dogs napping lazily. Since 1994, and with the approval of the Papua New Guinean Government, the mine has dumped its tailings – the waste rock leftover when you extract the valuable minerals from an ore – into the local river (Macdonald 2004). While efficient and convenient, the environmental and social costs come at the price of a river’s death.

The impact of mining in developing countries is more severe than that experienced in the first world (Auty 1993). A dearth of strong governance mechanisms, lack of accountability, unethical business behaviour, involvement of paramilitary or private security forces, and tolerance of corrupt practices contribute to environments in which the needs of local communities or environmental protection are often sublimated to economic gain (Bebbington et al. 2008). Such experiences are so severe and so common, they have been dubbed the ‘resource curse’ (Auty 1993).

While developing countries weather the bulk of mining’s negative impacts, these effects occur to varying degrees wherever the process takes place. In first-world countries, mining’s impacts may be felt disproportionately by those individuals and communities who are more likely to face the marginalization and vulnerabilities associated with indigeneity, lower socio-economic status or rural living. Although such communities are more likely than their developing country counterparts to enjoy the considerations and protections of legitimate governments, environmental protection regimes, social programmes, welfare supports and economic compensation, mining nevertheless precipitates social, environmental and economic challenges.

In remote Western Australia mining takes place on and around lands which the earth’s longest known human inhabitants call home. Yet until Australian law recognized the rights of indigenous people in 1993, native Australians had little or no ability to protect their territories. Although the overturning of the terra nullius (literally ‘blank earth’) doctrine granted indigenous Australians the ability to claim ‘Native Title’, certain lan...

Table of contents

• Cover
• Title
• Copyright
• Dedication
• Contents
• Acronyms and abbreviations
• Acknowledgements
• Prologue
• 1 Introduction
• 2 A lunchroom model of corporate social responsibility
• 3 The great adoption: mining companies tell their CSR story
• 4 Holistic assessment and community-based agreement-making
• 5 Ethical decision-making: weighing dilemmas, intuition and rational choice
• 6 Appropriate boundaries and good governance
• 7 Making responsible mining happen: a theory
• 8 Hope for the future
• Appendix: notes on primary data sources, research ethics and methods
• Index