A roundtable discussion on the imperativeness of innovation in the mining industry and the importance of “getting it right” on corporate social responsibility, kicked off The Northern Miner’s recent Progressive Mine Forum in Toronto.
Kulvir Gill, a senior principal at strategic consulting firm Clareo Partners and founding executive director of the Development Partner Institute, which was set up in 2016 to advance innovative thinking about the role of mining in society, got the ball rolling by noting that sustainability and innovation are interlinked.
Gill, who has spent much of his career working with companies to overcome their innovation deficits and earn their social licence to operate, talked about the importance of doing better as an industry on CSR, emphasizing that mining companies must create stronger legacies in the local communities in which they operate, by creating flourishing ecosystems and long-term opportunities. They also must make sustainability central to their corporate strategies, he says. “The innovation imperative up until now has been economic, financial, operational, safety, productivity — but I challenge that,” Gill declared. “The next wave of innovation is going to be around social purpose. It’s going to be around the environment. It’s going to be about making life better for the communities around us.”
Stephane Leblanc, Rio Tinto’s managing director of Iron Ore and Titanium, talked about how for many years “social licence” and “licence to operate” were the buzzwords in the resource sector but that over the past two years, the terminology at Rio Tinto has shifted away from “licence” towards “consensus” and “partnership.”
“To make partnership work we have to learn to listen … we have to take quality time to spend with the community to understand what they really need,” he said, adding that Rio Tinto has focused on four key areas: education and training; cultural preservation; economic development; and environmental stewardship.
Andrew Cheatle, executive director of the Prospectors and Developers Association of Canada (who has since left the PDAC), noted that the industry has to stand up and be counted. And while the sector has made great technological advances and done a wonderful job of talking about it amongst itself, it has not communicated it very well to society at large, and suffers from a “terrible perception” problem. The geologist recounted that during a recent interview he had given to a 27-year-old journalist from The Guardian newspaper he was told: “Let’s just face it, mining is not sexy.” The reporter added that the mining industry “does not have any interest to the people of my generation — whether it’s to work in it, or to invest it.”
“We have to consider there’s a much younger generation that doesn’t understand mining yet,” Cheatle told the forum. “It’s about communication … we have to be our own advocates in society.”
By contrast, Douglas Morrison, president and CEO of the Centre for Excellence in Mining Innovation in Sudbury, argued that “we are actually a sexy industry. We just pretend we’re not, and we need to stop doing that.” Morrison added that the industry has done “an extraordinarily bad job” of explaining to the population that what it produces — like the coal used to make steel — is crucial for providing the things society needs. In addition, Morrison described mining as a “sophisticated business,” and pointed to growing automation in underground mining and new processes that boost productivity and safety. “The stuff we do is really, really interesting,” he said. “We’re not hacking rock out of the ground with picks anymore.” As an illustration, he pointed to the large copper producers that are attempting to operate underground mines at rates of up to 150,000 tonnes per day. “That is not a trivial engineering feat … and there’s no app for that.”
Lisa Davis, the CEO of Pear Tree Securities, pointed out that while the industry talks a lot about doing things differently, it doesn’t include half the population. “I’m quite frustrated by the lack of progress that we’re making when it comes to diversity,” she said, adding that the mining industry has one of the worst track records of populating their boards with women. “It’s quite clear that innovation requires diversity, and there have been lots of studies and metrics showing that when you’ve got a more diverse leadership group, that you’re going to perform better financially.” Davis also pointed out that “short-termism” is a “huge” problem in the industry, when management teams are measured, and rewarded, for achieving short-term goals, rather than investing in innovation for the longer term.
George Hemingway, who runs the innovation practice for the Stratalis consulting group and focuses on helping companies think a little bit differently about the future, argued that many of the foundations and assumptions on which mining companies have relied on for decades have started to change and that new alternatives could “absolutely rock the stability that mining has relied on in order to survive.” As an example, he cited the role recycling might play in the future if, “someone like Apple said, ‘Hey, we want 100% of our metals to come from recycling one day.’” Indeed, Apple could even decide to become a mining company at some point. “Why not?” Hemingway said. “Let’s face it, the capital markets like it more than they like mining companies. They’re not constrained by the operating model that mining companies have. They don’t have the legacy that mining companies have from a sustainability point of view … it could be a real potential threat because they are playing by a different set of rules … and it makes it difficult to compete if you’re a mining company.”