Changing Role a Great Challenge

Mining has been considered an indispensable industry for the development of human societies since Neolithic times. Today, the industry faces one of its greatest challenges: to continue to play a strategic role in the world’s most important economies, while adapting to new social demands, such as respect for the environment and the communities in which it operates.

In Mexico, where mining is the third-largest industry in terms of FDI attraction, the challenge is even greater. Governments, authorities, NGOs, local communities, companies and citizens have begun a process of change aimed at transforming mining activity into a sustainable and socially beneficial industry. “The mine of the future will have a fully integrated community and business environment, in which planning will occur beyond operation and toward closing, so the community can remain sustainable beyond the mine’s life, as well,” says Robert Schafer, President of the Society for Mining, Metallurgy & Exploration (SME). He was speaking during Mexico Mining Forum 2021.

The sector’s environmental and social risks have been a part of Mexico’s national conversation for quite some time now, especially since Andrés Manuel López Obrador, historically critical of this industrial activity, became president of the country. This is one of the reasons why both the public and private sectors have begun to take steps to offer guarantees to a public that is increasingly aware of the need for radical change in a sector that is required to adapt to new global trends.

One of these trends is Industry 4.0, in which concepts such as AI or IoT will prove to be key in the short term, along with the energy transition that is aimed at eliminating industrial pollution. “This will have implications for local communities. While most jobs will not necessarily disappear, we will need more skilled workers,” says Isabelle Ramdoo, Deputy Director of the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF).

Mexico is considered one of the most diverse mining countries in the world but it also has the most at stake in the near-term future. Water resources, protection of endangered ecosystems, ensuring plans for the future of mines and diversification of economic activities for communities once the mines closed should be at the top of the list of coming changes in the sector. However, the process could change the status quo, making it imperative that all parties involved (federal and local governments, private sector and communities) work together, says Aidan Davy, chief operating officer of the International Council on Mining and Metals (ICMM). Otherwise, Davy says, “problems will prevail.” He further explains that, “Governments traditionally give up their resources so that mining companies can develop them and local communities expect to benefit in a more direct way. If a changing industry alters that relationship, new approaches need to be found.”

The effort to transition to cleaner energy, with US President Joe Biden's Green New Deal as the main exponent, will once again place mining at the center of the discussion. The construction and design of more efficient solar panels, the construction of batteries destined to lead the electric mobility revolution, 5G and the need for companies to eliminate their carbon footprint in an increasingly culturally, politically and commercially connected world will shape the way the world will unfold in the future. “A big commitment is needed. Industries need materials to decarbonize, but there needs to be a balance between mineral development and environmental protection,” Schafer says.

What has not changed, however, is mining's interventionism in the environment. The use of explosives and huge amounts of water (with its consequences on hydrological profiles) and the construction of leaching heaps for the concentration of high-risk substances will continue in the short and medium term. The alteration of the landscape demands rigorous planning when considering new projects, both at the beginning and at closure. “It is obvious that the mining industry operates in a climate of high environmental, social, political and media vulnerability and visibility, which increasingly demands successful adaptation to change. Perceived environmental risks in mining operations determine their social and political viability, as well as their capital costs and ability to generate long-term value. For these reasons, and given Mexico's enormous mining potential, as well as the sector's great economic relevance, it is essential that the government, through SEMARNAT, propose a sustainability and competitiveness policy for the Mexican mining industry that includes large mining companies as well as small and medium-sized ones,” wrote Gabriel Quadri de la Torre, civil engineer and former Mexican presidential candidate, in his article, “Mining, Environmental Crisis and Sustainability.”

Implementing new technologies, developing environmentally friendly projects and training a new workforce that is more committed and educated in the values that will govern the economy in the post-COVID world would help reduce emissions and limit carbon footprints. “We need to find a balance between mineral development and environmental protection,” Schafer says. But to do so, another step is just as essential: convincing the population of the need for green, clean, responsible and community-engaged mining. “Mexico is a large mining jurisdiction and the government is creating a stable environment for mining, increasing its attractiveness. The country can be a leading example of responsible mining through the adoption of new, clean technologies, which could lead other companies to adopt ESG practices,” Schafer says.