Tag Archives: social licence to operate

United thinking on mining, water solutions can save money and protect the environment, Worley says

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Today, the need for extraction and refinement of copper and other transition materials is essential to world development, as we navigate a transition to more sustainable energy technologies, Saleem Varghese and Carola Sepulveda* write. But as its importance has grown, copper ore grades have decreased at a rate of approximately 25% over the last decade – increasing demand pressures on the commodity – meaning miners need to process more material to achieve the same output.

Today’s copper mines also need a lot of water. A 50,000 t/d ore copper mine will consume around 30,000 cu.m/d of fresh water. This isn’t a problem in some geographies, but it’s critical to the viability of operations in some of the most copper-rich regions on earth, such as the Americas.

Copper miners in the Americas are united by the need to secure their water supply, reduce water consumption and manage their environmental impacts. What can they do to overcome these interrelated challenges, while meeting their production targets?

Where are we now?

Mining and processing depend on vast amounts of water, and for South American miners this leads to complications. The copper mines of the Americas are frequently located in arid and mountainous regions where water is scarce. Indeed Chile, a leading copper mining nation, is currently enduring a ‘mega-drought’ of 13 years and counting. Here, water is a national security issue, leaving some rural communities reliant on tankers to supply fresh drinking water.

This importance is recognised by miners as well, with local community impact and water management being the industry’s top ESG risks, concerning 78% and 76% of respondents, respectively, according to research by EY.

Indeed, by 2040, all Chilean copper mines are expected to be in areas suffering from water stress. Likewise, water efficiency is increasingly becoming a serious problem, with the water-energy nexus shifting and water becoming more expensive. For water-intensive mining processes, lack of access and an increasing price per litre can be potentially difficult hurdles to overcome.

For modern copper miners, there is a historic separation between mining and water operations which must be reengineered to improve water access and use. As mines see their speed to market and output slowed due to water stress, there are three key challenges which, if solved, will help the industry as it extracts the materials to electrify the world. Only by managing water and mining operations together and bringing in collaborative expertise, can miners tackle the challenges before them and deliver at pace.

Understanding the three critical factors for mining success

Water management is the key ESG factor copper miners face today, and this manifests in three key issues: one historic, one present and one which poses a challenge now and will only get worse.

The first challenge is securing a reliable water supply.

The second challenge is reducing water consumption and increasing water efficiency, to ease pressure on water supply.

And the third challenge is minimising environmental risks.

Overall, water issues could affect the viability of mining projects in many regions around the world. Mining operations require significant amounts of water for processes including mineral extraction, ore processing, dust suppression and more. However, in many areas such as in Latin America water is becoming scarce due to drought, climate change and overuse.

Supplying modern mines

To supply mines and refining plants, mines have recently moved away from shared groundwater supplies to desalinated water. Desalination is more expensive but offers less impact on local communities and environment. Given that mines in the Americas are usually distant from the coast and at higher altitudes, desalination represents a difficult challenge for engineers to make feasible. Alternatively, to secure groundwater lifting licences, consumption needs to be effectively managed, and any water put back into the environment must be treated effectively.

Solving the supply challenge by altering water consumption

In effect, the first problem, supply, can be eased by tackling the second issue: water consumption. If supply is the historical issue, using water more efficiently to alter consumption is the issue of today. Whether it’s water use in particle flotation or lost in tailings slurries (for transportation and storage), making sure these processes are done as economically, efficiently and sustainably as possible is key. This is where new technologies and solutions come in.

An example of this is seen in the storage of tailings. Where water cost and procurement are not an issue in different locales and climates, the storage of tailings in a slurry form is common. In arid conditions where water resources are strained, the economic sense behind storage slurries evaporates. Slurries not only take water out of the operational system and into a closed storage system (which will need to be replaced), but it also allows the potential for water loss through evaporation and seepage.

Dry storage techniques – which have increased in scale in recent years – are the obvious solution with greater water reclamation from tailings and increased safety in storage. Moreover, high-altitude mines and liquid-based storage pose a potential risk to those downstream, making dry storage safer and more effective.

Copper tailings from an old mine that are deposited between rock berms that help contain the sediment

Another example of reducing consumption can be through greater efficiency when appraising the ores to be processed. This can be done with advanced ore sorting technologies such as those offered by NextOre, a cutting-edge technology able to provide real-time analysis of newly extracted ores. Rather than typical analysis methods which can detect mineral particles at or near the surface of ore, NextOre’s magnetic resonance technology can evaluate and sort much coarser ore with accuracy and speed. This allows miners to selectively remove the waste or lower grade material before it enters the processing plant – ultimately saving water, with only the best ore to be utilised.

A common misconception about water projects is that they are expensive and require significant resources to implement. While water projects can be costly, it is important to consider the long-term benefits that they bring, such as increased water availability, environmental impact mitigation, improved access to clean water for communities, and further growth for industry.

Saving water, and protecting the local environment

The third issue, which is increasing in importance by the day, is managing the risk of localised environmental issues, especially acid mine drainage that can contaminate the natural environment.

This is an issue that is only going to become harder to tackle as the ores we are required to mine become lower grade and the ability to avoid sulphur-forming ores is lost. In this respect, new technologies can help as more challenging ores are treated.

Overall, the challenges faced by the industry cannot be addressed by a single solution, or by siloed teams attacking from all angles. A unified, collaborative approach will be needed for the best results.

The design and implementation of a water management approach should be tailored to the specific mine site needs and context of the community and stakeholders involved. For projects to succeed in the future, they must integrate mining, water and environmental capability under one roof – from front-end studies to delivery, and operations through end-of-life. Miners will benefit from working with a collaborative partner to consider mining operations and water issues holistically, and how new mining technologies can operate synergistically to help tackle these water challenges.

Why internal and external collaboration is key for businesses

The mining industry will struggle to solve its water challenges alone. And it doesn’t need to. The complexity of modern mine operations – and need for diversified expertise – simply reflects the scale of the energy transition, and the need to continuously improve environmental outcomes to maintain the social licence to operate.

The answer is not straightforward and requires a deep understanding of operations, mining, water management and the surrounding community. Collaboration needs to be coordinated to develop and implement real solutions for the enduring issues facing miners.

If done right, copper mining will bring lasting value to communities through low-impact operations that share the benefits of water infrastructure and provide meaningful local economic contributions. This is the responsible way to ensure we deliver the copper our world desperately needs.

*Saleem Varghese is Copper Growth Lead at Worley, while Carola Sepulveda is Water for Mining Lead, Peru, at Worley

IMDEX evaluates the mining industry’s emerging trends

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IMDEX says its global footprint in key mining regions throughout the world gives it an important glimpse of the some of the emerging trends and challenges facing the sector, trends that were taking shape prior to the onset of COVID-19.

Leveraging technology, or, more specifically, the cloud, is one development the Australia-based company has noted in recent years.

“The global minerals industry has turned to technology to improve safety, enhance efficiencies and reduce the cost of exploration and extraction,” it said.

When people think about innovation, most minds turn to autonomous haulage or remote operations, but there is an enabler to this innovation, according to IMDEX: the cloud.

Companies, not least of which those in the mining services and resources sector, are utilising cloud platforms to store data remotely and retrieve it via the internet. Remote mining operations using an array of software, sensors and communications are becoming routine because of these systems, IMDEX says.

But the cloud also provides the opportunity to improve productivity.

IMDEX General Manager, Product Development, Dr Michelle Carey, said clients were increasingly wanting to use the cloud because it enabled them to get data faster and in real time.

“We refer to it as the single source of truth,” Dr Carey said. “Accurate, reliable data delivered in real time that can be seen simultaneously by many people, which then enables real-time decision making.

“It also means there are no issues about the chain of custody. Using the cloud gives clients the confidence that no-one has tampered with the data so they can make decisions based on data they trust.”

Business’ enormous appetite for the collection and storage of data is making these platforms increasingly popular, according to IMDEX. A decade ago, it would have been unthinkable that companies would be sharing computing and IT resources over the internet. “Today the cloud is a business imperative,” it said.

The resources sector, once satisfied its concerns regarding access and data security were met, have been quick to capitalise on cloud computing.

Cloud computing of course does have its downside (similar to any technology). To work properly, cloud systems require reliable internet access. That is increasingly becoming essential on even the most remote mine sites.

EY’s September 2019 poll of mining executives indicated that ensuring digital (and data) effectiveness continues to rank within the top risks for their respective organisations. EY also noted further that cloud-related investment will account for the largest share of technology spend (over the next two years) in more than 50% of companies.

IMDEX has been in the cloud for over 10 years and is renowned for its real-time, subsurface intelligence solutions with numerous sensors on the drill site, at the core farm and increasingly on the bench collecting high-quality data, it said.

These technologies can be connected to IMDEXHUB-IQ™ – a cloud-based web portal that collects, stores and provides critical operational data. This data is protected through a validated chain of custody and a secure database, accessible from any internet connection to smart phone, tablet or PC, according to IMDEX.

Social licence to operate

According to IMDEX, the notion of licence to operate is evolving, with society expecting more from organisations.

“Once, companies in the minerals and resources sector focused primarily on ensuring compliant operations,” IMDEX said. “Today, compliance is just ‘step-one’… the minimum standard.”

The company added: “External stakeholders are scrutinising companies more than ever; how an organisation is managing environmental responsibilities and the health and safety of their workforce. They are insisting on local content and strong community investment; ensuring there’s support for local indigenous communities and that a company is committed to addressing climate change.”

The effective management of these requirements ensures the community will have confidence in an organisation, granting their social licence because they trust the company.

Earning trust and confidence is seeing a shift in how organisations structure the management of community stakeholders, according to IMDEX.

IMDEX said it will include additional economic, environmental and social impacts of its activities in its 2020 annual report, with the aim of preparing a sustainability report in accordance with Global Reporting Initiative standards within three years.

Dr Carey said IMDEX already had a suite of products and services that supported the sustainable operation of mining industry stakeholders.

“Our technologies improve productivity by providing information that affects decisions throughout the life of the mine, but they also have sustainability and environmental benefits,” Dr Carey said.

“The technologies enable clients to understand material properties accurately at a finer scale, and in real-time, enabling them to mine with less waste and process ore more effectively.

“Improved precision in exploration, drilling programs and mining means a reduction in waste. Things like our Solids Removal Units and BOS tool means reducing the use of water during the drilling and the size of the footprint disturbed during drilling.”

Miners still need social licence for their autonomous vehicles, Wilson says

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Mining companies embracing automation and technological innovation must be also be aware of the possible implications for their social licence to operate, according to a social performance specialist.

Dr Ceit Wilson, who has more than eight years of professional experience in addressing the social and development challenges of the extractive resources industry, says there are risks around the future of technology and employment, especially from a social perspective.

Dr Wilson will address the issue in a presentation at this year’s International Mining and Resources Conference (IMARC) in Melbourne in October – Australia’s largest mining event.

Issues around social licence to operate and sustainable mining principles will be a key focus for the three-day conference with a dedicated workshop and two conference sessions covering the topic.

Environmental health and safety, social licence, sustainability, staff retention and skills development are also among the topics set to be discussed in the free to attend Collaboration Theatre, one of five concurrent conferences at IMARC.

“I intend to use my presentation at IMARC to bring attention to the fact that the while the mining industry is positively benefiting from automation and technology innovation, we need to address the question of how technological change will impact the host communities in which they operate,” Dr Wilson said.

“This is somewhat of a paradox given that gaining and maintaining a ‘social licence to operate’ is one of the key challenges currently facing the sector.

“We know it is no longer enough for mining companies to simply meet the formal obligations of an ‘environmental licence’ to extract resources.

“They are increasingly expected to behave responsibly and make a positive contribution to the communities in which they operate.

“One of the main ways mining companies seek to deliver this social value to regional communities is through the provision of local employment and business development opportunities.

“The concern is that automation technology may disrupt this positive trend. We are already seeing major mine operations in Western Australia and Queensland replacing human operators with autonomous trucks and robotics, and shifting control centres to the capital cities, miles away from where actual mining takes place.

“And yet industry has been silent on the potential risks that these future technologies may pose for communities and broader stakeholders.

“Disregarding these risks may leave companies ill equipped to respond to social impacts when they occur, with potential consequences for their relationship and trust with communities.

“Any company that is genuinely committed to protecting their social licence to operate will need to carefully consider and reassess how their projects will continue to deliver social value to the regional communities in which they operate if, as a result of automation, local employment and procurement opportunities are no longer as readily available.

“Maintaining a social licence will require balance and attention to alternative ways in which social value can be delivered.

“This may include a consideration of alternative livelihood or benefit sharing models, or a greater focus on the transfer and sharing of industry’s knowledge of technology through training and education programs.”

IMARC will be held from October 29-31 at the Melbourne Convention & Exhibition Centre.

International Mining is a media sponsor of IMARC

BHP stresses importance of ‘social value’ in strategic decision-making

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While many miners look to emphasise the way they obtain and retain their social licence to operate during exploration, development and operations, BHP said this week that “social value” plays an important role in its decision-making.

At a briefing in London on October 8, BHP Chief External Affairs Officer, Geoff Healy, said: “We are moving from a position of maintaining ‘a social licence’ to creating ‘social value’.

“For us, it is – plain and simple – good business. We are part of a society that expects more of us. We recognise that our success depends on our ability to earn their trust and confidence. And we know that this means changing the way we do business at all levels, from local to global.”

Healy said that when the company makes business decisions, both financial value and social value considerations come into play – “each depends on the other for the decision to be effective”, he added.

During the briefing, Healy said the company makes a relatively small number of large, long-term capital investments that are structurally immobile – “we can’t just close up the factory and relocate when the going gets tough”. This means when BHP invests in a region, it becomes part of the local community for decades, with the miner, sometimes, creating those communities.

“Our portfolio is simple – yet the inherent risks are complex and wide-ranging,” he said, explaining that circa- 80% of the company’s EBITDA is concentrated in Western Australia, Queensland and the northern Atacama region of Chile; 55% of its revenue is derived from China; and over 80% of its products emit CO2 in its customers’ value chain.

“An imbalance in our community relations in a few locations has the potential to fundamentally impact our business: from a reset of fiscal terms, to the refusal of necessary permits and approvals,” he said.

“A disorderly transition to decarbonisation has the potential to threaten the viability of entire commodities in our product suite. And a social and environmental disaster, such as another significant tailings dam failure, has the potential to be existential.”

On the flipside, he said BHP knows that if it manages well its transition – “from ‘social licence to value’” – it will create a “core competitive advantage that will be hard to replicate”.

“Retreating, or seeking a quick, short-term fix, will not work. Getting it right will be differentiating, and value creating,” he said.

In this context, Healy reviewed the results of some of the investments and initiatives the company has undertaken, which has seen the number of high potential injuries reduced by more than 40% in the last three years, the number of women hired since 2015 trebled and over $1.7 billion invested in social programs in the last decade.

Healy said: “All of these commitments stand for nothing unless we hold ourselves to account and are transparent.

“We have made public our emissions targets, our water stewardship efforts, and the taxes and royalties we pay.”

Coming back to the move from ‘a social licence’ to creating ‘social value’, Healy said this transition protects BHP’s business today and positions the company to take advantage of future opportunities.

He said: “To obtain access to the best resources, we must be the partner-of-choice for governments.

“To secure the best talent, we must be committed to making a positive societal impact.

“And, to secure the best partners, we must be trusted by our community partners.”

‘Access’ is the key word here, Healy said, with there being two sides to that word: “One, protecting and maintaining the access we currently have. And, two, securing access to new resources, new talent, and new partnerships to take full advantage of future opportunities.”

In addition to the company’s targets to reduce greenhouse gas emissions, with the recent $400 million investment in technologies to reduce emissions from both BHP’s own operations, as well as those generated in its value chain being the obvious example, BHP is also looking to play its part in ensuring tailings management standards are lifted across all of industry and transforming the way it is managing water and power at Escondida.

The latter includes moving to 100% desalinated water over the medium term and transitioning to 100% renewable power with BHP in the late stages of securing a long-term contract for renewable power supply that could “deliver significant cost savings relative to our current gas-fired supply”, Healy said.

He concluded: “We know that when we consider social impacts in our decision-making; and when we build respectful and mutually beneficial relationships, we create sustainable value for all of our stakeholders; and in particular for our investors.

“We are determined to assess and communicate our progress regularly and transparently.

“And we expect to be judged on the results we produce and the value we create, for you as investors, as well as our broader stakeholders.”