Sustainable Mining as a Competitive Advantage
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Sustainable Mining as a Competitive Advantage

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Karin Dilge By Karin Dilge | Journalist and Industry Analyst - Fri, 05/20/2022 - 10:21

Even though mining has been linked to irresponsible practices and negative impacts on the environment and communities, the industry has been and will continue to be fundamental to the country’s sustainable development, agree experts.

According to the United Nations Development Programm (UNDP), extraction of construction minerals increased 34 times in the 20th century, while ore and industrial minerals production increased 27 times. This outpaces the quadrupling of the global population and even the 24-fold increase in the worldwide Gross Domestic Product (GDP).

The UNDP reported that the World Economic Forum, UNDP, the UN Sustainable Development Solutions Network (SDSN) and the Columbia Center on Sustainable Investment (CCSI) have been working together to find out how the mining industry can most effectively contribute to the UN’s proposed Sustainable Development Goals (SDG).

Currently, 193 UN member states have pledged their support to the 17 SDGs proposed by the UN and mining companies have the possibility of becoming a key partner in achieving these goals. Mining companies can generate profits, employment and economic growth in low-income countries. Furthermore, if strong partnerships between corporations, government and civil society are closed, the mining industry could benefit beyond the life of the mine itself.

“There is a big push in the mining industry to find more sustainable solutions, particularly in terms of equipment or methods. But in every company, you must start from the top. If senior management are really tough and focused on sustainability, it is easier to pass the message down to operator level and ensure everyone understands what is required and why it is important,” said Tom Melbye, Normet, Board of Directors.

According to Melbye, equipment selection should play a key role in sustainable practices. “Miners will be focusing on cutting greenhouse gas emissions, moving to solar panels, looking for ways to use clean energy and decarbonizing. Some will shift to battery-electric vehicles (BEV) for mine site operations, moving their fleets away from diesel,” said David Wolfin, CEO, Avino Silver. An example is Torex Gold, a company that is joining the efforts seen around the world to reduce greenhouse gases by building a hybrid fleet of electric and diesel vehicles, starting with the acquisition of 66 BEVs, and signing an agreement to build a solar power plant at its Morelos complex. The company’s Media Luna project fleet will be hybrid via the combination of diesel-powered vehicles and electric vehicles.

“The mining industry is starting to take sustainability seriously, realizing that if companies do not act on it, they will not survive,” noted Melbye. “After all, sustainability is increasingly connected to productivity, which is, in turn, linked to economics and profitability. There are clear financial gains to be accessed from sustainability.”

Sustainable practices are normally seen as more expensive. However, companies can find an unexpected financial benefit from improved sustainability. Green policies can help give a corporation a competitive edge. Additionally, the ability to recycle and reduce waste has clear links to an improved bottom line. Mining is one of the most regulated activities in the country and to operate, companies must have an environmental operating license, an operating certificate, authorization in terms of impact and change in land use.

In 2019, the sector invested US$457.7 million in sustainability initiatives and US$375.2 million in environmental programs. Torex Gold, for example, developed a plan to build an 8.5MW on-site solar energy project by partnering with Scatec that will complement its existing power supply. “Investors are tired of hearing all talk and no meaningful action regarding decarbonization. The project will bring economic benefits, reduce energy costs and help curb emissions. Furthermore, it will create jobs for our community and leave a net-positive legacy there. Transforming mineral resources into sustainable prosperity over time is important to us,” said Judy Kuzenko, CEO, Torex Gold, in an interview with MBN.

Specifically in Sonora, there are also plans to improve the negative impact that some mining operations have had on the environment. An example of this is the new Cananea Comprehensive Care Plan that seeks to improve the quality of life of its citizens and address the most urgent mining problems in Cananea, Sonora.

In 2014, there was a spill that contaminated the Sonora River with copper sulfate, which came from Grupo México's Buenavista del Cobre mine. The government committed to conducting studies at the Sonora River and carrying out constant testing and monitoring to limit the pollution in the water and improve its conditions. "This plan seeks to repair the damage and restore the human right to water, health and a healthy environment for the present and future generations in Cananea," says Luis María Alcalde Luján, Minister of Labor. Meanwhile, Grupo México has reaffirmed its commitment to the well-being of the environment and its communities and argued that its operations have been a driver of development for Cananea.

The government of Sonora announced that it will invest over MX$700 million (US$34.91 million) together with Grupo México to carry out water infrastructure upgrades at the Cananea and Nacozari mines. Water is a key factor in mining and minimizing it has proven to be effective in countries such as Canada, where figures from the National Round Table on the Environment and the Economy show that water intake used in mining fell by a third in just ten years, according to UNDP data. Moreover, reducing energy consumption is also very relevant to be mitigated in the industry. Three percent of the world’s energy is used in mining extraction activities.

Sonora Governor Alfonso Durazo announced that MX$670 million (US$33.42 million) will be allocated to Cananea and MX$50 million (US$2.49 million) to Nacozari to provide clean water. Durazo highlighted that the decision was made following a meeting with Xavier García, Executive Vice President, Grupo México. The investment will be carried out for the remainder of 2022 and early 2023.

Photo by:   Tyler Casey

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