Labour relations biggest material risk for mining sector – report

Based on this methodology, Alva found that while labour relations contributed just <1% material impact last quarter, it fell to -11% in Q2, as industrial action increases across the diversified mining sector. This situation makes it the most negative issue and the third most impactful material issue overall.

The main development affecting labour relations was the strike called by the United Steelworkers union for 2,500 members working at ArcelorMittal’s operation in Quebec, Canada, while also calling for a further 1,300 member strike in the United States. 

Similarly, Alva mentions the case of Glencore, BHP and Anglo American who have faced repeated clashes with the largest union at their co-owned Cerrejon mine in Colombia, which held a three-month strike last year. 

This quarter, the mine declared force majeure and halted operations because of two blockades which prevented it from bringing in supplies of fuel on a rail line. One of the blockades was launched by former workers who were upset by recent job cuts, as the coal mine saw its exports fall to their lowest level in the past 18 years amid coronavirus restrictions and falling global demand for coal.

BHP is also facing a revolt at its mining camps in Australia after imposing a ban on drinking after 9:30 p.m., with unions saying that staff are “being treated like children.”

Besides labour relations, the study shows that the management of waste and hazardous materials and measures of health and safety represent material risks for the mining sector in Q2, although overall negative material impact falls by almost half compared to Q1.

When it comes to waste and hazardous materials, one of the main issues identified in the report is the situation at Rio Tinto’s Tiwai Point aluminum smelter in New Zealand, where investigations are being conducted after claims that highly toxic waste has been buried in unmapped sites around the facility. 

Another major problem reported is connected to Newcrest’s Cadia gold mine tailings dam collapse in 2018. According to Alva’s review, in the Cadia and Errowanbang valleys in New South Wales, Australia, people are reporting health issues caused by dust events that are a consequence of the collapse.

Also in New South Wales, health and safety issues are taking centre stage as the resources regulator is prosecuting South32’s subsidiary Endeavour Coal over an incident that led to a worker suffering serious injuries when operating a conveyor.

In Queensland, on the other hand, the May 2020 explosion at Anglo American’s Grosvenor coal mine is found to have been caused by repeated overproduction and poor planning, exposing workers to “unacceptable risk”.

The good moves

Alva’s review also points out the areas in which miners are making positive changes. For Q2-2021, biodiversity is generating the highest impact reaching +10%. Comparatively, in Q1 this topic registered a -8% negative material impact. 

“The heightened materiality comes as the sector begins discussions of how to ethically mine the world’s seabed as technological advances and new mapping capabilities lure companies to target the untapped, underwater resources,” the document reads.

On land, Anglo American’s initiative to roll out an “eDNA” data transfer commitment, becoming the first mining company to make such a pledge, is also generating material positivity. The impact of this program is enhanced by the fact that Anglo started sharing data with eBioAtlas, an initiative to combat extinction by using DNA technology to create a global atlas of the state of life in rivers and wetlands of world importance. 

In Alva’s view, ArcelorMittal is also gaining positive material impact from its 2020 sustainability report, where it announced the development of a potato-based, biodegradable dust suppressant that can reduce secondary sinter dust emissions by more than 80% when applied as a foam. 

“As more instantly recognizable material issues – such as greenhouse gas emissions or energy management – continue to drive material positivity, less visible issues, like biodiversity, are yielding opportunities for companies to take the lead,” the report reads.

Also leading in biodiversity is Newcrest, after the company announced over $100,000 in funding support for the construction of a rescue and breeding facility for conserving endangered kangaroos at the Port Moresby Nature Park in Papua New Guinea. 

Energy management is another sector where miners are performing well, with Rio Tinto taking the lead as it partners with Schneider Electric to develop digital platforms, technologies and solutions to be used across its supply chain, driving improved energy efficiency and decarbonization.

Alcoa, on the other hand, obtained a standard certification for energy management after committing the Deschambault aluminum smelter to “improve its results through the efficient management of all forms of energy.”

Emissions control generates mixed results

For the most part, mining companies’ performance is improving when it comes to GHG emissions, according to Alva’s report. 

Barrick Gold’s decision to raise its GHG target to 30% from 10%, pledging to achieve net-zero carbon emissions by 2050 following pressure from investors for climate change initiatives, is one of the main positive drivers. 

Next to Barrick’s pledge is South32’s decision to reiterate its commitment to the Paris Agreement objectives, announcing a target to half Scope 1 and 2 operational emissions by 2035.

But not everyone is passing with flying colours. ArcelorMittal is being blasted by the environmental lobby group Centre for Environmental Rights, whose members say the company is failing to respect environmental laws that impact air quality standards.

In Australia, on the other hand, environmental groups are protesting the New South Wales planning commission’s approval of Glencore’s Mangoola coal mine. The activists say they are concerned about air quality and emissions from the operation.