Communities affected by mining cannot be an afterthought of transition
One of the hardest meetings I have had to endure in my career was in the highlands of Guatemala in 2008. I was with a group of international shareholders who had traveled there to understand the impact of mining on the local community.
The challenges and impacts of the open pit mine on this impoverished indigenous community were real and raw. Two people were killed while protesting against the opening of the country’s first gold mine. Communities have complained of disease, water pollution and damage to homes from blasting. There was a sense of frustration that their concerns had not been heard and they felt powerless against a large and powerful Canadian mining company. On the other hand, some people in the community acknowledged that the mine had created jobs and investment in local infrastructure, including additional health care, education, roads and even the internet. The community was divided.
There were about 50 people in the room that day, a mix of traditional and modern clothing, the women with their babies wrapped tightly against their backs. It was humbling and had a lasting impact on me.
Fast forward to 2022. I find myself in central London, working for an asset management company, spending my days advising on how to integrate ESG issues into investment decisions and helping to create new investment products.
As I help my colleagues navigate sustainability and increasingly complex regulations, I think more deeply about the “green” transition. What will it take to move our complex social, political and economic system towards a more sustainable future and do our best to mitigate climate change?
I am millions of miles away from that difficult meeting in the highlands of Guatemala so many years ago, but the experience stays with me. How do you ensure that communities and employees are an integral part of this discussion and are partners in the transition, rather than an afterthought?
Ensuring a just transition
There are disturbing facts about mining and the energy revolution. According to the International Energy Agency, the total demand for minerals and metals from clean energy technologies is expected to double or quadruple by 2040, depending on the climate transition scenario. This is mainly due to the need to greatly increase wind and solar energy for electricity generation. Lithium demand alone could increase 13 to 15 times current demand levels. Copper and aluminum will be in high demand to meet the 50% increase in electricity transmission and 35% increase in distribution network lines to support renewable energy capacity.
These materials and metals have to come from somewhere. Much of it will come out of the ground in poor, rural parts of the world and be mined by large mining companies. If we want to ensure that we all move fairly towards a sustainable world, we must support the “just transition”. It is a transition that must recognize the potential social and human costs of the energy revolution.
This is especially important for mining. Not only could these costs be devastating to communities, but the backlash against responsible resource extraction could prevent us from achieving our zero emissions goals.
Certification of mine sites will undoubtedly play an important role in ensuring that mining to support the energy transition is done responsibly. That’s why I serve as a volunteer on the board of the Initiative for Responsible Mining Assurance (IRMA). Communities and workers must be active participants in deciding how and where mining will take place and their rights must be respected. The IRMA Mining Assurance Standard gives these stakeholders a critical voice.
As we accelerate investments in green technologies, investors must ensure that mining development does not come at the expense of communities. IRMA’s rigorous, multi-stakeholder approach embedded in the certification process is an excellent tool to achieve this. This provides greater confidence in how mining companies implement their sustainability principles at the mine site and how they integrate “just transition” principles into their operations. Just as buyers of metals and materials are asking their suppliers to apply for mine-level certification, investors will soon be asking companies to do so.