Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Chile’s Codelco, the world’s largest copper producer, has outlined sustainability plans in five areas of action for its operations and projects, including goals to cut carbon emissions by 70%, reduce inland water consumption by 60% and recycling 65% of its industrial waste by 2030.
The state-owned miner, which in 2017 planned to sell “green copper” at a premium price to customers using more sustainable practices like renewable energy, now favours a broader initiative.
Codelco has also committed to lower its water footprint by more than half of current levels
The plan, centred around five key points, seeks to reduce around three quarters of the company’s carbon emissions by creating what it calls a “100% clean energy matrix.” This encompasses replacing all underground production equipment will electric vehicles and machinery. It also involves participating in the search for new clean energy sources, such as green hydrogen.
Codelco, which hands over all of its profits to the state, has also committed to lowering its water footprint by more than half of current levels. The vital element has become a bone of contention for the expansion plans of the miner and several other companies, particularly lithium producers.
The majority of Chile’s mines are located in the Atacama desert, the world’s driest, where a mostly abandoned practice of drawing water from the salt flat has left the area practically water-depleted.
In terms of industrial waste reduction, the miner said it would start by recycling 100% of tires and increase the recycling of non-hazardous solid industrial residuals, such as steel, wood, packaging materials, organic waste and scrap metal.
Codelco’s plan also covers the physical and chemical stability of its tailings deposits.
Progress towards each of the outlined goals will be measured with specific performance indicators and are associated to specific business cases that involve all operational areas, Codelco said.
“We are taking charge of our purpose as a company to strengthen the sustainable development of Chile and the world, with defined goals and deadlines,” CEO Octavio Araneda said in the statement.
The move by the influential copper giant could, if successful, pave the way for more significant industry-wide sustainability standards for the historically high-polluting copper mining trade, analysts said.
The Santiago-based miner noted it would implement a new integration strategy to generate social value. Part of that effort includes increasing the acquisition of goods and services from local providers by 30%, favouring local labour and strengthening mining education.
Codelco’s latest bid to ride the sustainability wave comes amid increasing global pressure from governments and environmental groups on miners.
Customers are also demanding products with a lower carbon footprint as mounting scientific evidence points to emissions as the main drivers of climate change.
