Sustainable Development: Working with nature and humanity

In the beginning, almost in the beginning, there were the earth, the water and the sky. Within the earth and water and sky there were metals, and they were moved by tectonic and meteorological forces. But there were no people, and the animals had no use for the metals, so the metals were not touched.

Then the first people inhabited every land. They used rocks and other resources and eventually most of them discovered, accumulated and used metals that they found on the surface.

Other people came and exploited the metals and resources more thoroughly. The lands, water and air became polluted. Wars were fought over the resources. Some governments began to tell people to leave the metals in the ground. Everyone wanted the old mine workings cleaned up but no one wanted to do it.

And so, a large meeting was called, and wise people came to talk about these problems. That meeting was the Global Mining Initiative (GMI) conference, held in Toronto in mid-May.

This introduction may seem facile, but I want to convey the importance the conference may have to mining history.

Going to the convention each day was like stepping into another world, where international bankers, ethicists, environmental and human rights advocates joined top executives from the largest mining companies in the world in continuous dialogue. The delegates were well-informed, some brilliant, charismatic. They all focused on a single theme–how to reconcile the need for mine products with the equally important need for a clean environment, healthy communities and economic stability amongst the world’s poorest people. Of the 520 delegates, representing 42 countries, only 40% came from the mining industry. Synopses of many papers from the conference and a webcast link are available at www.gmiconference.com/summary.html.

The conference was a culmination of three years of planning, and two years of intensive work on the Mining, Minerals and Sustainable Development (MMSD) project, which resulted in a massive analysis of the world mining industry, and nine recommendations that will strongly influence how mining companies and other stakeholders tackle sustainable development issues in the years ahead. The final report is available at www.iied.org/mmsd.

The issue of sustainable development is not confined to the mining industry, but is being tackled in a broader way by world leaders. In fact, the results of the MMSD report and the GMI conference will be on the agenda at the World Summit for Sustainable Development in Johannesburg this summer.

The GMI and the MMSD project came to an end with the conference, but the work will carry on through a recently restructured international mining association, the International Council on Mining and Metals, ICMM (Communications Director, 19 Stratford Place, Third Floor, London, W1C 1BQ, United Kingdom, Tel. +44 (0)20 7290 4920, www.icmm.com).

Following are excerpts from plenary and sub-plenary sessions and interviews during the GMI conference. Note that the statements are all taken out of context, remembered from my imperfect notes, but they show the range and honesty of issues being discussed.

Environment

Luke Danielson, director, MMSD, U.K. – There is a legacy from past mining practices, which is the most visible form of negative advertising for mining. All consumers have a shared responsibility through paying low prices for metals.

Daniel Limpitlaw, University of Witwatersrand, South Africa – The Copperbelt in Zambia is one of the great mineral belts of the world, but Zambia hasn’t benefited from it. Over 70% of the population lives below the poverty line. It is a good example of how large and serious the environmental impact of mining can be. There are more than 45 large tailings dams and over a billion tonnes of tailings and well as large waste dumps. Mining contamination has been traced 700 km south from the mines in a river.

However, the largest environmental threat is the huge urbanization in the Zambian Copperbelt, forcing people into marginal activities like small agriculture, which is removing forested area and degrading the headwaters. The land is sustainable at a population density of four people/km2, but not at 37 people/km2. The best solution would be if ZCCM [a national mining company] could mine in the area again and make jobs for people, but it looks like this won’t happen.

Jim Kuipers, consultant engineer, Centre for Science in Public Participation, U.S.A. – In many places, the mining industry has lost its social licence. The solution lies in accurately determining the actual reclamation and closure costs. Internalize all environmental and social costs. Establish a tax or tariff on metals consumption.

Community and government

Shri George Varughese, Development Alternatives, India – If you are in business, do your business; don’t get involved in community development. Hire the best person to do that. Activities can be economically sustainable; you don’t have to provide welfare only. Start your community dialogue and planning early in the exploration stage, so it is not out of sync with the mine development process.

Prof. Glenn Miller, University of Nevada, U.S.A. – Communities have the right to say ‘no’, even if the government has decided ‘yes’. Putting a mine into a community will alter that community forever. Mining companies should not be allowed to go into areas without responsible government. There should be no mines in areas where the society does not have the capacity to use the wealth for societal good.

Father Michael Perry, US Conference of Catholic Bishops, U.S.A. – There is a place for profit, but there is a social mortgage. The paradox of plentiful resources and plentiful poverty has not gone unnoticed. The Church recognizes that weak, corrupt governments and unorganized communities have played a part in this tragedy.

NGOs [non-governmental organizations] are no longer just trying to target mining; we are in a new stage of trying to engage and educate you. NGOs are beginning to speak to one another, to discuss issues of corporate responsibility.

Robert Wilson, chair, Rio Tinto plc; chair, GMI, U.K. – The responsibility for decisions rests with governments, but it is complicated. What happens if governments can’t or won’t make decisions?

For many years the industry has been dominated by businessmen and engineers. We are reasonably confident in handling environmental issues, but the social dimension is a much bigger challenge. The social skills are now a part of our mainstream responsibilities.

Economic development

Peter Woicke, managing director, World Bank Group, U.S.A. – Mining is key for developing nations because mining companies work in the frontier. Mining is tremendously important in some of the poorest nations in the world. Mining companies have transformed themselves into engines of growth.

We can design revenue management for governments that can transform how money gets to the people. The number one challenge is for local community development. If you don’t get a handle on issues – social, environmental, economic – you will lose credibility.

The mining industry and what you are doing with MMSD is way ahead of what many other industries are doing. It is bringing up issues that might be uncomfortable for some, but which will lead to benefits.

Thabo Mbeki, president of South Africa (by video) – This conference is an important step on the road to sustainable development. We need to work for a future that is more equitable than the current one. Mining has been a catalyst for industrialization. One of the most important outcomes will be to help developing nations to diversify their economies.

The problems of the 21st century will require many partnerships. Jean Chretien’s devotion to African development has heartened many Africans.

Duma Nkosi, chair, MMSD Assurance Group, South Africa – Critics of development must respect the force of desire where development has to happen. Africa needs both types of development–agriculture and mining. When the resources are depleted the benefits must be ongoing. Mines are not
sustainable, but mining can be.

The fundamental problem for the global economy in the last 20 years is that the price of minerals has declined. At the end of the day, consumers must pay a fair price after all the costs are incurred.

We need a wired up group of consumers. Investments made in companies that use good practices is the only way to prevent a rush into hell. We need a free movement of capital around the world. It won’t be easy.

The MMSD has been largely a willing experiment. You have no idea of the Pandora’s box you have opened. Many would feed abused if there is resistance to change by you.

New relationships are needed between those who provide and those who benefit from them. Even if you don’t understand someone, it’s alright to respect him.

Juan Villarzu, president and CEO, Codelco, Chile – I can offer the perspective from a southern developing country.

Here we have an important contradiction. Brian [Gilbertson, deputy chair and CEO of BHP Billiton, Australia] says my shareholders want income, perfectly reasonably. It is the same shareholders in the North who are also making demands for sustainable development. But consider the balance of power and how the market works. It is usually the weaker countries that cannot afford to pay. (Fortunately this is not the case in Chile.) How do we make profitability compatible with sustainable development?

Business case for sustainable development

John O’Reilly, head of technology, Rio Tinto plc, U.K. – We need to maximize the value of a deposit and minimize the impacts. The conventional wisdom is the open pit is the more cost-effective way to mine. But when an open pit mine is considered as a waste management project, that changes the economics.

Jay Hair, secretary general, ICMM, U.K. – The ICMM is trying to help companies do things that are both right and that make good business sense. The metals we use every day have not been fully costed, in terms of their costs to the environment and society. Start thinking of this as an integrated materials management system. Recycling is vital. Metals are the only material that can be recycled into perpetuity because they are elemental.

Doug Yearley, chair emeritus, Phelps Dodge Corp; chair, ICMM, U.S.A. – There is a clear business case for improving our performance. Low returns and a poor social-environmental record make mining a risky investment. Mining companies that embrace environmental issues are more efficient, have superior management and represent a lower risk profile.

If we can all work together and improve this sector’s performance then the prize is spectacular: a sector that plays a fundamental role in alleviating poverty around the world. We cannot afford to fail.

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