Tag Archives: ESG

Hindustan Zinc accelerates growth plans as it partners with industry leaders

Hindustan Zinc Ltd (HZL), a Vedanta Group Company and the world’s second largest integrated producer of zinc and lead, is in acceleration mode, embarking on aggressive expansion and collaboration plans with technology and innovation partners from across the globe.

One of the first mining companies to commit to going “Net Zero” by 2050, it has a strong focus on ESG reinforced by plans to deploy battery-electric vehicles, tap into more solar and wind power potential and recycle waste heat from its captive power plants. Such ambitions are being delivered with up to $1 billion of finance in the next five years to “go green” and, by 2025, achieve focused sustainability goals.

At the same time as it is looking to become an ESG leader, it is boosting its mine and metal production by leveraging “smart mining” and an extensive resource and reserve base.

IM put some questions to Arun Misra, Hindustan Zinc CEO, to find out how the company intends to deliver on its lofty ambitions.

IM: HZL’s 2021 financial year to March 31, 2021, was characterised by record production volumes and profitability; how were you able to achieve such results given the COVID-19-affected constraints on your operations?

AM: The uncertainty has evolved continuously. If I give you an example, we started the year with the uncertainty of COVID only; that is people getting infected leading to absenteeism. It was so contagious, it spread so fast, half of our workforce were down. So, that struck us heavily, but, nevertheless, because we had experience of last year, and this time there was no lockdown of industry, we were able to figure out how to manage and we did manage well, compared to last year’s same quarter, which was also COVID-affected. We had introduced various measures to change the way of working to ensure a safer working environment for the employees. We also got our workforce vaccinated along with their families to further minimise the risks associated with the pandemic.

Hindustan Zinc CEO, Arun Misra, says Hindustan Zinc has been at the forefront of ensuring personal health, be it of its employees or local communities

Furthermore, the automation and digitalisation efforts at Hindustan Zinc are equipped to better withstand these testing times while ensuring quick revival to a normal level of operations.

IM: During the height of the pandemic, HZL – like other socially responsible mining companies – supported communities within or close by to its operations. Can you highlight some of the actions you took over this period and what impact they had?

AM: We at Hindustan Zinc have been at the forefront of ensuring personal health, be it of our employees or local communities. We have gone beyond and extended our support to the state of Rajasthan and the nation at large by contributing significantly to the PM Cares Fund and Rajasthan Chief Minister Relief Fund.

To meet the requirement of oxygen during the second wave of the pandemic, we had set up an oxygen bottling plant at our Dariba unit (Rajsamand district) in a record time of five days and had supplied over 14,000 cylinders of medical oxygen. We even arranged 500 oxygen concentrators to be imported and distributed for use across the state.

We had provided an insulated vaccine van to the Udaipur district medical health office to support a smooth vaccination drive and extended support to the local health administrations, by disinfecting villages by spraying and fumigating with sodium hypochlorite solution and providing medical gear like masks, sanitisers and PPE to local communities.

We even constructed an 8,000 sq.m air-conditioning dome hospital, based on German technology, which has a capacity of 100 beds – including 20 ICU beds – to accommodate patients and provide them with essential COVID treatment and medical facilities.

IM: ESG is obviously a major focus area for HZL, as these examples illustrate. Where specifically are you investing in your mining, power and smelting operations to make them more environmentally friendly?

AM: As a COP26 business leader, we have always been active in tackling the repercussions of climate change and have a strong focus on reducing carbon emissions. We are pioneers in India, declaring our ambition to convert all our mining equipment to battery-operated electric vehicles and will invest $1 billion over the next five years to make our mining operations environmentally friendly.

We are continuously expanding our renewable power of 274 MW of wind and 40 MW of solar under our greenhouse gas reduction goals by converting 50% of our total power to renewable forms in the next five years. We are among the only two metal and mining companies globally – and among four Indian companies – to be part of the coveted CDP (Carbon Disclosure Project) ‘A List’ 2020.

Furthermore, we have even published our first Task Force on Climate-related Financial Disclosure (TCFD) Report this year and have also joined the Taskforce on Nature-related Financial Disclosures (TNFD) forum to understand nature-related risks and opportunities and accelerate the transition towards a nature-positive and carbon-neutral future.

We have set Sustainability Development Goals to 2025 for ourselves where we are aiming towards sustainable operations for a greener tomorrow.

Hindustan Zinc has embarked on a major growth push at its mining operations with six ongoing expansion projects that will see over 100 km of tunnels developed for underground infrastructure and ore access

IM: At the same time as this, HZL has embarked on a major growth push at your mining operations with six ongoing expansion projects that will see over 100 km of tunnels developed for underground infrastructure and ore access. How are you able to balance your sustainable expansion plans with pledges to reduce your overall footprint?

AM: We strive for operational excellence and cost efficiencies and continue to stay on the growth track while being equally cognisant of our environmental, social and governance commitments, as well as our sustainability goals. We are leveraging more digitalisation and automation than we ever have, as well as engaging with technology leaders to do ‘more with less’.

The SmartDrive equipment we plan to use enables higher productivity, lower operating costs and, most importantly, zero local emissions, featuring in-built energy recuperation technology to make the most of regenerative braking energy during downhill driving and deceleration.

Being a power-intensive business, our key focus is always on reducing dependence on non-renewable sources of energy and enhancing our renewable power base.

IM: How important has it been to partner with like-minded technology and solution providers to ensure you meet these ambitious goals? Can you provide some examples here?

AM: We always look for partners who align with our philosophy of running sustainable operations to achieve company goals. We don’t need one-off solutions from companies to meet our targets; we need companies that will engage throughout our medium- and long-term projects and provide an element of customisation that factors in the realities of operating in our underground mines. We look for global partners to work with us where we exchange ideas, insights and knowledge with them in our growth journey.

We believe in providing opportunities to our business partners to leverage collaboration on technology, innovation and digitalisation, for long-term value creation and mutual growth.

To support our expansion plan, it is crucial for Hindustan Zinc to collaborate with mine development and operation partners who share a similar vision to ours, which is to leverage cutting-edge technology to create a positive impact on the entire mining fraternity. We are currently working with companies like Sandvik, Epiroc, Normet, Barminco, RCT, Siemens, etc as our global partners. We have engaged with them to provide end-to-end solutions rather than sourcing a specific supply or service.

Hindustan Zinc has given an equal platform for women engineers in its mining operations, appointing India’s first female underground mine manager in 2021

IM: You have already stated a goal of 1.5 Mt/y of zinc production in the upcoming years and extending your lead as India’s largest integrated zinc-lead producer; what is your vision for the company to 2030 and beyond?

AM: We are excited about our next phase of expansion to take mining capacity from 1.2 Mt per annum to 1.35 Mt/a. We will surely cross 1 Mt and we should be above our guidance if we achieve the desired run rates in our third and fourth quarters.

While our growth plans are a key part of the company’s future, we are also focused on becoming the leading zinc-lead-silver producer from an environmental, social and governance point of view. Our DJSI Ranking of being among the Top 5 companies in the metal and mining sector is testament to this. We are already winning significant awards for our ESG and CSR efforts, and expect this recognition to continue and grow as we head towards mapping out our 2025 sustainability goals.

Also, the mining value chain is changing across the globe and more consumers are becoming aware of the origins of the products they buy and the emissions that come with their production.

To collaborate with Hindustan Zinc on its green growth mission, email [email protected]

Rio Tinto partners with Pixxel to investigate hyperspectral satellite tech capabilities

Pixxel, an edge earth-imaging technology company, has announced an early adoption partnership with Rio Tinto spanning mineral exploration, active and closed mine site monitoring and ESG metrics.

Pixxel’s imaging satellites, capable of 5 m hyperspectral imaging, will help Rio Tinto assess the benefits the technology may provide in these areas, the company said. Rio will begin its assessment of the technology following the release of imagery from Pixxel’s first high-resolution satellite, set to launch early this year.

This partnership, Pixxel says, validates the potential benefits that its technology may provide to the resources sector.

“Pixxel’s high-resolution hyperspectral satellite imagery has the potential to significantly reduce costs and timelines for exploration and improve monitoring of active and closed mine sites,” the company said. “In the coming months, Pixxel plans to launch a high resolution hyperspectral satellite, which will capture 50x information compared to common multispectral satellites. Rio Tinto will be assessing the potential of Pixxel’s hyperspectral imagery to help reduce the disturbance footprint of exploration activities, monitor the operational and environmental performance of active mining operations, and monitor biodiversity and vegetation health around closed sites.”

Pixxel Co-Founder and CEO, Awais Ahmed, said: “This partnership will be pioneering in its deployment of hyperspectral satellite imagery for commercial mining operations. We’re excited to be partnering with Rio Tinto to explore the use of hyperspectral remote sensing technology across their operations at a global scale.

“Moreover, the exponential leap in image quality (50x more detail than existing multispectral satellite imagery) allows Rio Tinto the ability to assess Pixxel’s imagery for monitoring critical mining operations and make key decisions with sustainability in mind.”

Dave Andrews, Head of Exploration at Rio Tinto, added: “Rio Tinto is participating in Pixxel’s Early Adopter Program because we believe that exploration could benefit from more cost-effective and easier access to hyperspectral satellite data.”

SQM to highlight ESG lithium credentials with IRMA audit

Lithium leader, SQM has commenced a third-party audit against what it says is the world’s most rigorous standard of best practices in environmental and social responsibility at industrial scale mines: the Initiative for Responsible Mining Assurance (IRMA)’s Standard for Responsible Mining.

According to a United Nations Environment Programme report published in 2020, IRMA “is the only mine-site focused multi-stakeholder standard for industrial-scale mining that offers independent external verification and certification, that requires corrective actions and continuous improvement”.

IRMA is also the only mine-site standard that requires community engagement in all steps of the process, an aspect of focus for SQM, the miner said. The IRMA standard has the most robust criteria related to fair labour and terms of work, occupational health and safety, and community health and safety, it added.

By commencing a publicly-noticed, independent third-party audit, the company can now participate as a Member in the IRMA scheme. This makes SQM the second lithium mining company and the first Chile-based mining company to initiate an independent IRMA audit and, through this, become a full IRMA Member.

An audit report will also be shared publicly upon completion, allowing reviewers to understand both strengths and challenges at the operation, and will guide improvements.

This membership is part of SQM’s established process of working to a high standard of transparency and public accountability in its corporate objectives on environmental matters, sustainable operations and social responsibility, it said.

At the end of 2021, SQM also announced it is participating in the UN’s Race To Zero program, and trialling Chile’s first high-tonnage electric truck to be used in low-emission mining operations.

SQM’s CEO, Ricardo Ramos, said: “This is a fantastic step forward for SQM in our ongoing efforts to continue to lead the industry in terms of sustainability commitments and public reportability of our ESG objectives. SQM’s IRMA membership represents the newest development in a slew of green initiatives, but we are not stopping here. Our aim is to achieve the IRMA Transparency Level by 2022 and IRMA 50 by 2025, and we are firmly optimistic that we can make the changes necessary to meet these carefully considered goals.

“This is an exciting time for SQM as we continue to explore innovative ways to make our lithium production more environmentally friendly, while listening and supporting our local communities.”

IMARC ready to explore the race to decarbonise the energy sector

The global effort to decarbonise the energy sector is underway, and the race to net zero is shaping up to be an investment opportunity to define the decades to come, the organisers of the IMARC conference report.

Research suggests that as the price of adopting green energy continues to fall, so will the global demand for fossil-fuelled energy sources. Eventually a tipping point will be reached, and fossil fuel dependent energy companies’ assets will become ‘stranded’ unless they can adapt or pivot toward new sustainable energy practices.

As nations in the first world expand and those from the second and third world modernise, their energy needs will do the same, meaning more electricity, more hydrogen, more nuclear and more yet-to-be-discovered energy sources will be needed than ever before.

For the companies participating in Australia’s biggest mining conference, the International Mining and Resources Conference (IMARC) in 2022, staying in the race to decarbonise is essential.

Tipping point

Research suggests the tipping point for fossil-fuelled energy providers will come when costs for renewables reach parity with the lowest-cost traditional fossil alternatives, and this could be much sooner than 2050.

For such companies, demonstrating the long-term value to investors in a soon-to-be stranded asset class is becoming an increasingly hard sell. But it does not have to be. By pivoting toward renewable energy and investing in a low-carbon future, companies can ensure their survival after net zero.

EDL CEO, James Harman, said the industry was making the slow but sure transition to decarbonisation.

“The world has long relied on cheap, plentiful fossil fuels to power economies,” Harman said.

“In the early 2010s, EDL started looking to solar and wind generation as alternatives to fossil fuels across our portfolio, particularly for off-grid customers in remote Australia who were largely dependent on diesel- or gas-fuelled generation.

“In recent years, we have enjoyed great success with our hybrid energy solutions, helping our customers reduce their carbon footprint, but importantly maintaining and improving reliability whilst holding or reducing price. For example, our Agnew Hybrid Renewable Microgrid at Gold Fields’ Agnew Gold Mine provides the mine with energy that is an average of 50-60% from renewable sources, with 99.99% reliability.”

“EDL was one of the pioneers in the Australian landfill gas sector in the 1990s and, today, we are leading the way in high renewable energy fraction islanded microgrids. We are also exploring the introduction of landfill gas to renewable natural gas/biomethane technology to the Australian market, and the economic production of green hydrogen.”

ESG reinvigorating investment

Environmental, social and governance (ESG) frameworks are, at their core, risk assessment tools that consider the effect climate change will have on investors’ value creation opportunities. In June 2021, research and advisory experts, Gartner, released some jaw-dropping facts about the growing importance of ESG credentials.

According to Gartner, more than 90% of banks monitor ESG, along with 24 global credit ratings agencies, 71% of fixed income investors and more than 90% of insurers. Media mentions of ESG data, ratings or scores grew by 30% year-over-year in 2020, and 67% of banks screen their loan portfolios for ESG risks.

Harman acknowledged that it was important for attitudes and practices across the energy sector to change.

“Given that electricity generators are some of Australia’s biggest carbon emitters and most of the product generated is carbon intensive and derived from fossil fuels – the most important ESG themes for energy companies are climate change action and environmental stewardship,” he said.

“This includes investment in research and development into zero emissions technologies such as distributed energy solutions, energy storage and alternative renewable fuels as well as carbon capture & storage.”

ABB Australia Head of Mining, Nik Gresshoff, is encouraged by the innovation and progress he’s seeing in electrification and hydrogen technologies. ABB Australia is a Gold Sponsor of IMARC in 2022.

“The challenge for mining companies now is to map out their own journey, and to weigh up the gains that can be achieved now through automation, along with the investment required to get to net zero,” Gresshoff said.

Gresshoff recommends companies first define what their carbon footprint is, and what falls within their scope for decarbonisation, before beginning a net-zero journey. “Are they focusing on direct and indirect emissions initially or including the whole supply chain from the outset?” he asked.

“The next step is to examine the technology and what is currently possible to decarbonise. Having a clear understanding of where the company assets are in their lifecycle is critical, as well as an understanding of what technology is available and what technology could fit with the current operation.”

Can dinosaurs survive the Ice Age?

Fossil fuels may be going the way of the dinosaurs that created them, but economies of the future will still require the massive infrastructure frameworks and operational capacities to meet current and future energy needs.

In fact, economists have suggested an overnight collapse of the energy giants could result in massive job cuts and instability leading to a global economic recession.

As was made clear at the Glasgow COP 26 Summit, there is a ‘wall of money’ that will be available for the energy companies of the future – whether that is retrofitting existing gas pipelines for transport of liquid hydrogen or utilising closed coal mine sites for new nuclear power sites, or any number of ways that energy companies can and are pivoting.
EDL believes there is an opportunity for many technologies to play their part.

“There won’t be a one-size-fits-all energy solution that achieves affordability, reliability and sustainability for our diverse country,” Harman said.

“Large conventional power stations are and will continue to be replaced with lower emissions plant with support to make them more dispatchable, allowing cheaper renewable energy to be scheduled when available.

“For shorter-term storage, batteries are feasible but longer-term storage is currently uneconomic. There are a few potential options to resolve this including pumped hydro, new kinds of batteries and hydrogen.

“Based on our experience in the USA, we also see the potential for renewable natural gas (RNG), or biomethane, to play a significant part in the transition from fossil fuels to renewables in the industrial, heating, power and transport industries. RNG production is a technologically mature, ready-to-scale product that is deployable now.”

EDL’s James Harman will be sharing further insights on net zero at the upcoming IMARC in Melbourne, Australia, taking place on January 31-February 2, 2022.

IM is a media sponsor of IMARC

RPMGlobal to create Emissions Management Software solution with Eden Suite deal

RPMGlobal (RPM) has entered into an agreement with Eden Suite Pty Ltd to acquire a copy of its Environmental Data Management and Reporting Software, Eden Suite.

This acquisition provides RPM with the exclusive worldwide rights to the intellectual property in the Eden Suite software for use in the mining and quarrying industries, along with the ability to extend and integrate the use of the software inside RPM’s suite of software products, it said.

This latest announcement follows closely from the recent acquisitions by RPM of two environmental, social and governance (ESG) consulting and advisory businesses – Blueprint Environmental Strategies and Nitro Solutions.

This acquisition, RPMGlobal says, is strategically important as it will be the first software solution within a brand-new Sustainability vertical in the technology division.

Richard Mathews, RPMGlobal’s CEO, stated, “RPM’s ESG consulting and advisory division has an enviable reputation in ESG matters and the establishment of a dedicated technology vertical focused on ESG technology will further bolster their credentials.

“RPM has a lot of ESG capability already built into its software products to address topics such as emissions simulation, disturbance scheduling/reporting and avoidance zoning. This strategic acquisition provides RPM’s mining customers with a proven ESG focused solution that has been specifically built and tailored for the sole purposes of supporting users with their environmental management and reporting requirements.”

Eden Suite has been supporting carbon management for almost 10 years and was initially developed to capture the fundamental mechanics of annual emissions reporting. This capability can also be applied to the annual National Pollutant Inventories (NPI) and other regulatory greenhouse gas emission reporting requirements. It does this by streamlining the capture of usages for anything that creates an emission output for an organisation, RPMGlobal explained. Usages of emissions sources can be manually entered or automatically integrated through direct data linkages.

The solution has been designed to make it easier for organisations to proactively track, forecast and subsequently report their emissions outputs.

“One of the major challenges faced by miners with emissions reporting is that of data capture, which is a critical component of the regulatory reporting framework,” the company said. “Eden Suite is configured to mirror how an organisation operates. Data is captured in a manner allowing for auditability and transparency, ensuring material disclosures in relation to carbon are accurately calculated and reported.”

RPM’s Emissions Management solution will be entirely web-based, and cloud delivered and is configured to reflect an organisation’s asset hierarchy. Inputs are then measured by vehicle, fleet or at an individual asset level allowing granular reporting and flexibility of changes which is important for historical and auditable reporting.

Mathews continued: “Mining organisations are being required to undertake an increasing amount of time-sensitive statutory reporting for ESG and this can no longer be reliably delivered through the use of Excel spreadsheets. With the RPM Emissions Management Software solution, a site or an entire organisation can generate annualised emissions submissions that can be summarised into daily emissions trends per activity or even source. Having a solution with real-time data capture allows mining clients to proactively monitor and manage their progress across Scope 1, 2 and 3 inventories.”

Eden Suite’s CEO, Peter Robertson, stated: “RPM is ideally positioned within the mining industry to further the growth of this software solution within that market. RPM is an industry leader in the mining consulting and advisory space and has a proven track record developing and integrating technology. We are pleased to have such a strong partnership with such a respected and progressive company.”

Datamine establishes dedicated mining ESG business unit

Datamine says it has established a dedicated environment, social and governance (ESG) business unit focused on the specific needs of the mining industry.

The new ESG business unit will bring together existing technologies and services under the leadership of Chris Parry.

Dylan Webb, CEO of Datamine, said: “We’ve observed that our customers are increasingly interested in managing ESG and its component systems as part of a single scope, led by senior executives.

“By establishing a dedicated business unit for ESG, we can now work closely with our customers on transformation strategies across the ESG spectrum, drawing on our deep domain knowledge to ensure the solutions provided are tailored to the mining industry.

“We are excited to have a leader of Chris’s calibre engaging with our enterprise clients to deliver improvements in ESG performance.”

Parry said he was impressed with the breadth of technology Datamine already has addressing the ESG needs for the mining industry.

“I look forward to working with Datamine’s global customer base to develop comprehensive ESG strategies underpinned by proven technologies,” he added.

Some examples of Datamine’s ESG technology portfolio include:

  • Discover GIS solution for geochemical, water, erosion and vegetation modelling and management;
  • Strategic planning tools to optimise extraction plans with minimum rehandle and intelligent waste dump design;
  • Qmed for workforce health management, COVID testing and vaccine administration; and
  • Centric Mining Intelligence for real-time transparency and governance across multiple sites and systems, including ESG key performance indicator reporting.

Beyond its technology suite, Datamine’s Snowden advisory division recently developed an in-pit crushing and conveying mining strategy for a customer that saved over 1 Mt of carbon emissions and A$700 million ($499 million) in cost savings, according to Datamine.

Webb said Datamine will continue to expand its ESG technology suite by investing in R&D and acquiring complementary solutions.

“It’s satisfying to see real momentum and desire by industry participants to improve ESG performance,” he said. “The community is increasingly realising that mining is essential for a low carbon future, but there is more we can do to minimise our impact along the way.”

Escondida, Spence and Olympic Dam production practices recognised with Copper Mark

BHP’s Chilean operations Escondida and Spence, and Olympic Dam in Australia, have been awarded the Copper Mark, recognising responsible production practices after an independent assurance process, the miner says.

The Copper Mark is an assurance framework specific to the copper industry, developed to ensure value chain participants demonstrate best practice in responsible production and contribute to the United Nations Sustainable Development Goals. Copper Mark is a voluntary program that independently assesses participants in 32 critical areas including environment, community, human rights and governance issues for mining, smelting and refining operations.

The Copper Mark uses the Risk Readiness Assessment (RRA) of the Responsible Minerals Initiative (RMI) and the Joint Due Diligence Standard for Copper, Lead, Nickel and Zinc, as the basis for evaluating participants’ performance.

BHP submitted Letters of Commitment for Escondida (pictured), Spence and Olympic Dam to the Copper Mark Responsible Production Framework on October 31, 2020. The Copper Mark was awarded to Olympic Dam on September 21, 2021, while Spence and Escondida were each awarded theirs on November 2, 2021.

BHP’s Group Sales and Marketing Officer, Michiel Hovers, said: “Long-term sustainability credentials are important to our customers and increasingly important to end consumers of copper products, such as buyers of electric vehicles and copper intensive consumer durables.”

BHP’s Mineral Americas President, Rag Udd, added: “Copper Mark is a step forward in developing an industry-wide approach to transparency and standards for the copper value chain and reinforces the value BHP places on responsible, sustainable production.

“Copper is a future-facing commodity and our operations have an important role to play in providing high quality and sustainable copper that is essential to the energy transition. Escondida, the largest copper producer in the world, operates 100% with desalinated water and, along with Spence, is aiming to achieve 100% renewable power by the mid-2020s.

“It is important to our customers, investors, employees, communities and governments to ascertain the ethical and sustainable production of copper along the value chain.”

BHP Olympic Dam Asset President, Jennifer Purdie, said the team was thrilled that Olympic Dam has become the first site in Australia to be awarded the Copper Mark.

“Olympic Dam is a multi-generational orebody and one of the world’s most significant deposits of copper, gold, silver and uranium,” she said. “The Copper Mark accreditation provides an industry-wide approach to transparency and sustainability in the copper value chain and provides our customers with confidence in the copper they purchase. Award of the Copper Mark will help us to keep sustainably delivering jobs, investment and economic and social value.”.

The Copper Mark’s Executive Director, Michèle Brülhart, said: “We are delighted to welcome Escondida, Spence and Olympic Dam among the recipients of the Copper Mark. We are particularly pleased to see the first Australian site to receive the Copper Mark with Olympic Dam while we continue to grow our footprint in the world’s main copper producing country, Chile. We congratulate the three sites for their achievement and their commitment to responsible production practices.”

RPMGlobal increases XPAC ESG scope with environmental disturbance modelling and reporting functionality

RPMGlobal has taken what it says are the next step in the development of its environmental, social and governance (ESG) technology capabilities, with the introduction of environmental disturbance modelling and reporting functionality into its mine scheduling products, XPAC Solutions.

The company is collaborating with a major mining client in Canada to develop the module, with on-site testing completed in September.

This new module provides users with environmental disturbance functionality associated with any disturbance of environmental significance across the life of a mine, RPMGlobal explains.

“Unlike a simple reporting tool, XPAC Solutions has the capability to restrain a mining schedule based on pre-set limits associated with both water catchment and flora and fauna zones,” it said. “For example, users can request a reduction in an environmental distance of some type and the software will then proceed to find a different schedule that honours that restriction.”

This new module is required because organisations now need to plan and report how much environmental disturbance has taken place in specified areas, allowing organisations to plan better when applying for, and receiving ground disturbance permits.

This forward-looking environmental view gives users the foresight they need to understand how the mining process will impact a piece of land, according to RPMGlobal. Users can easily configure the product across many different sensitive habitats and report results independently or in combination.

With RPMGlobal’s automatic environmental disturbance reporting functionality, users will no longer have to take a mine schedule and manually place it into a GIS system to build environmental reports, the company said. Instead, users configure the product once and it will generate the data required every time a mine schedule is run.

RPMGlobal’s Head of ESG, Ngaire Tranter, said the environmental disturbance capability would be critical for companies operating in jurisdictions that have stringent environmental restrictions.

“Organisations require forward-looking solutions that help them efficiently manage and demonstrate compliance with increasingly complex environmental rules and regulations that govern the industry,” she said. “Across many jurisdictions, policy makers and regulators are strengthening environmental disclosure requirements which underpin the importance of innovative software solutions that help mining companies navigate this evolving space.”

Since the commencement of the dedicated ESG division in July 2021, the company says it has been focused on developing and integrating unique ESG capabilities into its suite of mining specific software solutions.

The development project follows the completion of the company’s electric vehicle simulation capabilities which sit inside the company’s vehicle simulation suite of software. Separately, development has commenced to include hydrogen-powered haul trucks inside the same simulation platform.

Tranter said there were already planning sessions occurring for the next stage of XPAC Solutions’ ESG capabilities, which are focused on rehabilitation planning.

“There is an increasing focus from shareholders on an organisations’ social licence to operate so it’s important that we, as a software provider, continue to stay a step ahead by developing solutions that mitigate risk and add value for our clients in this space,” she said.

“Our intention is to develop a world-class ESG technology stack that builds on the expertise of our Advisory division.”

ERM on executing the mining sector’s sustainability strategies

With sustainability close to the number one topic shaping the business landscape, the mining industry faces perhaps more scrutiny today than ever before. From stakeholder engagement to employee welfare and the emissions generated from using mined commodities, there is a spectrum of issues on which mining companies are judged. Not just by traditional critics such as NGOs, but increasingly by policymakers, investors and consumers themselves.

As a result, mining companies are seeking the advice of consultants that live and breathe environmental, social and governance (ESG) issues to adapt to this evolving backdrop (see the mining consultants focus in IM October 2021 for more on this).

In this regard, they don’t come much bigger than ERM, which calls itself the largest global pure play sustainability consultancy. With a remit that goes into strategic, operational and tactical challenges, the company’s services have been in serious demand of late.

Louise Pearce, ERM Global Mining Lead; Jonathan Molyneux, ERM Mining ESG Strategy Lead; Peter Rawlings, Low Carbon Economy Transition Lead; and Geraint Bowden, Regional Client Director – Mining, were happy to go into some detail about how the company is serving the industry across multiple disciplines.

In demand

According to the four, there is increasing demand for services from miners interested in energy/battery minerals (lithium, cobalt, nickel, copper, platinum, palladium and rhodium (PGMs)) on the back of rising numbers of new mines coming onto the scene, “shorter supply chains to customers”, the perceived need to secure domestic supply of these minerals, and requirements of “evidence of responsibly-produced certifications from industry organisations such as the Initiative for Responsible Mining Assurance (IRMA)”.

Such trends have been underwritten by a shift in both the requirements and considerations around the extraction of these minerals, according to Molyneux.

“In the last five to seven years, the main ESG incentives for change have come from access to capital (ie investor ESG preferences, especially in relation to catastrophic incidents),” he said.

“Over the last three years, we have seen a strong rise in expectations from downstream customers, particularly leading brands.”

Jonathan Molyneux, ERM Mining ESG Strategy Lead

Automotive original equipment manufacturers like BMW and Daimler are placing sustainability at the centre of their brands, according to ERM. Their initial focus has been on ‘net-zero’ driving/electrification – and they have made progress on this with several major electric car launches. They then shifted to examining the carbon emissions and ESG, or responsible practices, of tier-one and tier-two component manufacturers. The last step has been a full analysis of the ESG credentials of input materials right back to source, ie the mine.

“We see a shift from the historic lens of customers managing supply risk by sourcing from organisations which ‘do little/no harm’ (eg human rights compliance, catastrophic incident avoidance) to supply partners that can contribute to the ‘do net good’ or ‘create value for all stakeholders’ (ie communities, workforce, nature positive),” Pearce said.

Such a shift has resulted in more clients considering “circular thinking” in their operational strategy, as well as carrying out risk reviews and transformation projects focused on a company’s social or cultural heritage. Tied to this, these same companies have been evaluating their water use, biodiversity requirements and, of course, decarbonisation efforts.

It is the latter on which the steel raw materials companies predominantly have been looking for advice, according to ERM.

The focus has been on ‘green’ iron ore, low-carbon steel and ‘circular’ steel, according to Molyneux and Bowden, with ERM providing input on how companies in this supply chain can integrate sustainability into their strategy and operations.

On the thermal coal side, meanwhile, it is a very different type of ERM service in demand: mine retirements, closure/local/regional regeneration transitions and responsible disposals.

Delivering on decarbonisation

The mining industry decarbonisation targets have come thick and fast in the last 18-24 months, with the latest announcement from the International Council on Mining and Metals (ICMM) seeing all 28 mining and metals members sign up to a goal of net zero Scope 1 and 2 greenhouse gas (GHG) emissions by 2050 or sooner, in line with the ambitions of the Paris Agreement.

Many have gone further than Scope 1 (direct emissions from owned or controlled sources) and Scope 2 (indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the reporting company) emissions, looking at including Scope 3 (all other indirect emissions that occur in a company’s value chain) targets.

Fortescue Metals Group, this month, announced what it said is an industry-leading target to achieve net zero Scope 3 emissions by 2040, for example.

These are essential goals – and ones that all interested parties are calling for – in order to deliver on the Paris Agreement, yet many miners are not yet in the position to deliver on them, according to Pearce, Molyneux, Rawlings and Bowden.

“Miners need to look at decarbonisation at a holistic level across their operations and value chain, and cannot just delegate the net zero requirements to individual assets,” Rawlings said. “The solutions needed require investment and are often at a scale well beyond individual assets/sites.”

Much of this decarbonisation effort mirrors other industries, with the use of alternative fuels for plant and equipment, accessing renewable electricity supplies, etc, they said.

Process-specific activities can present challenges and is where innovation is required.

“These hard to abate areas are where a lot of efforts are currently focused,” Rawlings said.

Tied into this discussion is the allowance and estimates made for carbon.

There has been anecdotal evidence of miners taking account of carbon in annual and technical reports – a recent standout example being OZ Minerals inclusion of a carbon price in determining the valuation of its Prominent Hill shaft expansion project in South Australia – but there is no current legislation in place.

“We are seeing a broad spectrum of price and sophistication (targeted audience, knowledge level), but it is an active board level discussion for most clients,” Bowden said on this subject. “Most clients view this as market-driven requirements as opposed to a voluntary disclosure.”

This has been driven, in part, from the recommendations of the Task Force on Climate-Related Financial Disclosures, which many miners – including all the majors – are aligning their reporting with.

Some clients are also looking into scenarios to work around carbon regimes such as the Carbon Border Adjustment Mechanism, which proposes a carbon-based levy on imports of specific products.

Having acquired several companies in recent months focused on the low carbon economy transition – such as E4tech, Element Energy and RCG – ERM feels best placed to provide the technical expertise and experience to deliver the sustainable energy solutions miners require to decarbonise their operations.

“With these companies, combined with ERM’s expertise, it means we can support clients on the decarbonisation journeys from the initial strategy and ambition development through to implementation and delivery of their roadmaps,” Rawlings said. “We can support clients from boots to boardroom as they assess decarbonisation options and technologies; help them understand the financial, policy and practical aspects linked to deployment of solutions; and access the financing necessary to support deployment.”

ESG dilemmas

There is more to this evolving backdrop than setting and meeting ambitious environmental goals, yet, in ERM’s experience, the advice provided by consultants – and requested by miners – has historically been focused on individual ESG domains.

“This has often been driven by their realisation that their (miner’s) in-house policies and standards require updating,” Pearce said.

Louise Pearce, ERM Global Mining Lead

A siloed or disaggregated approach to ESG strategy development often reduces risk, but rarely generates value for the enterprise at hand, according to Pearce.

“What we have learned is that in order for organisations to create value, they need to focus on value drivers for the corporation,” she said. “These value levers are typically influenced by an integrated suite of ESG dimensions. For example, this could be looking at carbon emissions, connected with water use and nature, connected with local socio-economic development.”

“Sustainability and ESG are about understanding the inter-relationships between our social, natural and economic environments over the longer term. It cannot be about addressing one topic at a time or responding to the loudest voices.”

This is where ERM’s ‘second-generation’ ESG advice, which is driven by data and opportunities to create value as well as manage risk, is fit for the task.

“We are also finding that, at its heart, the central issue to second-generation ESG performance delivery/improvement for our clients is not just the strategy, but a willingness of organisations to reflect on their core values, how these have driven their traditional approaches and decisions and how they will need to evolve these if they want to achieve a genuine brand and reputation for ESG and achieve impact on the value drivers they have selected,” she added.

Such thinking is proving definitive in ERM’s mining sector mergers and acquisition due diligence.

“We have multiple experiences where clients have asked us to carry out an ESG review of a target portfolio, only to find that there is too great a gap between the target’s ESG asset footprint to align them with the client’s standard – or, that the carbon, water, closure or tailings profile of the target carries a too high-risk profile,” Molyneux said.

This is presenting clients with a dilemma as they want to increase their exposure to certain minerals, but are, in some instances, finding M&A is a too high-risk route. At the same time, the lead time to find and develop their own new assets is longer than they would wish for building market share.

Such a market dynamic opens the door for juniors looking for assets early in their lifecycles, yet it places a high load on the management teams of these companies to think strategically about the ESG profile of the asset they are setting the foundations for to eventually appeal to a potential acquirer.

“This is, in itself, a dilemma because, typically, the cash scarcity at the junior stage leads management teams to focus on the immediate technical challenges, sometimes at the cost of also addressing the priority non-technical challenges,” Bowden said.

Those companies who can take a strategic view on the ESG requirements of the future – rooted in a deep understanding of how to deliver change on the ground – will be best placed in such a market, and ERM says it is on hand to provide the tools to develop such an appropriate approach.

(Lead photo credit: @Talaat Bakri, ERM)

Rio Tinto to roll out K2fly’s Ground Disturbance solution across Pilbara ops

K2fly Ltd says Rio Tinto has signed a five-year contract for its Ground Disturbance solution, with the miner planning to roll it out across its iron ore operations in the Pilbara of Western Australia.

The contract will generate annual recurring revenue of A$620,000 ($450,676) over the initial five-year term, the ASX-listed company says.

The addition of Ground Disturbance expands the number of K2fly solutions used by Rio Tinto to five out of K2fly’s nine existing solutions which already include: Resource Inventory & Reconciliation, Dams & Tailings, Community & Heritage and Mine Geology Data Management, K2fly says.

K2fly says its Ground Disturbance solution provides a single source for applying, approving, tracking, reporting and submitting closure of permits and rehabilitation commitments surrounding ground disturbance activities.

Nic Pollock, CEO of K2fly, says: “We are delighted to continue to expand our relationship with Rio Tinto into ground disturbance. Effective ground disturbance systems are the glue for operations that want to ensure technical assurance around land management, maintain licence to operate and ensure high environmental, social and governance (ESG) standards. We are pleased to be working closely with Rio Tinto across a number of key ESG solutions globally.”