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.
The need for responsible mining practices is not new and has for many years been at the top of the agenda for many large scale mining companies.
This issue has been collectively addressed by the large scale mining industry since the late 1990s in order to help improve public awareness, address concern for the environment, introduce the broader concept of sustainability and maintaining high ethical standards
Cobalt is essentially a by-product of copper and nickel mining and one of the major objectives of the CDI is to promote the responsible production and use of cobalt in all forms and its members abide by the 7-guiding principles of the Institute.
The CDI members sign up to a code of conduct which exemplifies the very best standards in protecting human health, the environment and upholding human rights.
Downstream companies purchasing cobalt products from a CDI member company have the assurance that these products are produced with the highest ethical standards. Company policies and codes of conduct stress a zero tolerance policy for child, forced or compulsory labour.
The CDI and its members are therefore very concerned about what has been reported on illegal artisanal mining in the Democratic Republic of Congo (DRC).
There is a risk of unjustified stigmatisation of all cobalt producers, including those in the CDI and International Council for Mining and Metals (ICMM), who for many years have followed strict corporate policies against the use of child labour and in the respecting of human rights.
Not only could this stigmatise the use of cobalt generally, to the detriment of the wider industry as a whole, but also those operations where the cobalt is mined and processed legitimately in full compliance with local regulations for health and safety and the protection of the environment.
It is also important to avoid the effects of unnecessary stigmatisation of the responsible bona-fide large scale producers that offer income, safe working conditions and protection of human rights, who may eventually decide to re-consider operating in that country.
Poverty, a lack of proper employment opportunity, the cost of education, and other capacity gaps are the main issues and should be addressed through partnerships and multi-stakeholder initiatives to help eradicate the use of child labour in places such as the DRC.
Ultimately, this is the responsibility of the DRC government so it is imperative that companies are encouraged to invest sustainably in the country in order to contribute to the economy and well-being of its people.
Any solution to this problem must include foreign governmental and international support and assistance to the DRC government in a manner that avoids unintended consequences.
At the same time, international pressure must also be applied on those non-compliant companies purchasing illegally mined cobalt, to address their own practices.
The mining industry provides the resources necessary for creating and developing modern materials and enabling technological progress and it has, as a responsible industry, also provided substantial benefits, particularly in developing countries. These include:
To achieve these benefits, the larger producers already operate within a spectrum of mandatory guidelines and voluntary initiatives that ensure they have responsible and sustainable working practices (e.g. the Universal Declaration of Human Rights; UN and OECD Guidelines; the Extractive Industry Transparency Initiative; the Global Reporting Initiative; ICMM Principles and many more)
“The importance of responsible resourcing is growing as organisations increasingly take evaluation of environmental and social performance beyond their own operations and integrate it into supply chain purchasing decisions”, the ICMM writes in “A Guide to Responsible Sourcing”.
This is vitally important to ensure the sustainable credentials of the industry.
It is important for producers to have an intimate understanding of their supply chain provenance, going beyond mere face value of documentation. So it is questionable whether the addition of mandated audits of the chain of material custody in addition to current guidelines would have any added value, particularly where the stream of raw material is from a company’s own mine.
For third-party material, a bi-lateral approach on sustainable sourcing between supplier and customer would be recommended in order to enhance the relationships within the supply chain and thus improve transparency.
This enables companies to carefully select their suppliers and eliminate those that do not provide the necessary sourcing assurances. In these circumstances self-certification or voluntary reporting systems are the preferred method as they bring the required discipline and flexibility to address issues of compliance.
We at the CDI believe it is far better to consolidate and rationalise existing guidelines and initiatives, which are all well considered, rather than imposing mandated requirements across such a broad based industry operating at differing levels across the world.
By David Weight, President, Cobalt Development Institute (CDI)
For more about cobalt mining in the DRC, subscribe to Benchmark | Membership today to receive access to our Q1 2016 issue, featuring articles from Amnesty International, Global Witness and more information on critical mineral supply chains – [email protected].
For more information on critical mineral supply chains, sign up to Benchmark | Membership today.
The CDI will be holding its annual conference on 11/12th May 2016 at the Grand Intercontinental Seoul Parnas, South Korea. For more information, visit the CDI at www.thecdi.com
Benchmark Mineral Intelligence will also be holding a FREE workshop on ‘Cobalt’s Future in Lithium-ion Batteries‘ ahead of the conference on 10th May 2016. To register for the workshop contact Andrew Miller – [email protected].
