“Clean” mining? You missed a spot.

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To attract shareholder interest, the standard of responsible mining has risen, but just “clean” just doesn’t cut it anymore.

From clean coal to clean gold and clean cobalt, the label of “clean” is a standard we now come to expect from the natural resource industry in 2018.  If we look at a brief modern history of mining we see a troubled past. In the last century, the mining industry has contributed to a number of global problems; environmental degradation and the number of untimely and preventable deaths of workers.

A major push toward “clean” mining practises ensued near the end of the 20th century. Coming out on the other end, the mining industry has transformed to incorporate the use of “clean”, “green” technologies and practise. Yet, the industry’s preoccupation with the label of “clean” may be missing the mark and forgetting one of its most stubborn stains: Social governance.

Don’t Cry over Spilt Acid

Clean mining, in effect, got it’s name from just that- mines cleaning up their act. Most times this effort was applied after something had already gone wrong. Some of the common environmental issues mines have been forced to rectify include acid rock drainage (the outflow of acidic water from unearthed rock), toxic tailings, heavy power usage and poor waste management, all of these having social ramifications for mining communities and workers.

However, the clean narrative has given some companies a dirty name. Barrick Gold is one of them; however, after undergoing numerous litigations for environmental and human rights violations, the company has now become a leader in Corporate Social Responsibility.

The stigma associated with the clean versus dirty dichotomy has formed a barrier discouraging some companies and financial stakeholders to participate in social programs. In a sense, admitting the need to come “clean”,  by default might entail admitting to their “dirty” dealings.

Yet, it can be difficult to enforce “clean” mining standards in demanding social environments. Where there are abject conditions, where government structures are unreliable and the mines attract unwanted attention from local communities,  including illegal miners and migrant workers even companies committed to ethical operation will encounter challenges. Apart from the stigma associated with the polarity of clean/dirty mining, it is this nuanced understanding of social conditions that is lacking in the terminology.

From Clean Mining to Social Mining

At Peer Ledger we move to shift the focus from clean mining to social mining.  With an integrative Environmental and Social Governance (ESG) approach, mines, mining companies, stakeholders, financial institutions, government as well as community take on joint responsibility.

Social mining implies voluntary actions  undertaken by mining companies to either improve the living conditions (economic, social, environmental) of local communities or to reduce the negative impacts of mining projects. These actions go beyond contractual obligations, licensing agreements, and the bare minimum to reach “clean” environmental standard and mitigating technical risks.

A social mining framework gives communities a place in the process with some measure of decision- making capacity, while mining companies are required to actively give back to the community. There is still debate on what government’s role should be in the ESG framework, with attention to  enforcing mining policy.

Overall,  social mining aims to address the forgotten elements of social unrest and poor governance as environmental concerns and acute human rights abuses take centre stage in dominant narrative . It takes a proactive approach to risk management with attention to risks that are not just technical or environmental,  such as the social risk of a workers’ strike due to abject labour conditions.

Pass clean. Collect $200 million dollars

Taking an ESG approach to responsible mining is a positive move for mining companies to become more attractive to investors and stakeholders. ESG indicators are becoming the dominant framework for socially conscious investors.  Peer ledger’s unique brand of supply chain solutions can enables companies to produce ESG reporting, providing accuracy transparency and consensus of operating measures along the supply chain.

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