Collaboration in Mining: Paving a Path Forward

Collaboration in Mining-Natural System.jpg

One of the greatest ironies of our time is that the planet’s economic and environmental future rests in the hands of the mining sector, an industry whose main purpose is to extract finite resources from the earth. The key role mining plays in creating a sustainable, carbon-free future has been publicly recognized by the World Bank and Canada’s Prime Minister. And while world and industry leaders recognize that mining is imperative to building a better future, vocal opposition to natural resource development exists at “local, regional, national, and international levels.” To transform the public’s perception, confidence, and attitudes towards the sector that might just save us all, we are left wondering what needs to change within the industry?

Understanding What We Stand to Gain (or Lose)

In 2017, the World Bank firmly stated that “minerals and metals will play a key role in the transition to a lower carbon future, with potentially significant changes for the minerals and metals market.” The reason is that transformative technologies and 21st century infrastructure—the very innovations that the world looks to for climate solutions—require accessing a greater quantum of minerals and metals to meet demand. Canada is the leading producer of minerals used for advanced battery technologies, and at current levels of demand, the sector directly and indirectly contributes a total of $97.7 billion to Canada’s GDP and roughly 626,000 jobs. Setting the mining industry up for long-term success is not just a path to a better global future, it is an extremely lucrative path for Canada as a world leader in mining and clean energy.

For the global and domestic value of mining to be fully realized, local value must be fully realized first. Without clear local benefits, both near- and long-term, it is more likely that a mine site will face local opposition. On an aggregate level, that means it will be difficult for the world to capture the full range of economic and environmental benefits that are unlocked by mining and the technologies it enables. The opportunities for the sector are changing quickly. To what extent has the rate of change in the sector kept up?

Seizing Science and Societal Expectations to Enact Change

Change has largely been driven by two forces: science and societal expectation. Both of these forces have informed and been informed by investment trends. Scientific advancement has helped the mining sequence operate with more sophistication and less environmental damage, but it has not changed the model itself. Societal expectations have also driven core changes in how the sector engages with communities—and has raised the regulatory and financial stakes for companies that get it wrong. Recent Environmental, Social, and Governance (ESG) investment trends show that the pressure motivating industry change is real, and those that take advantage of innovation to meet societal expectations can be rewarded with better access to cheaper capital.

One ripe opportunity for change is in reimagining mines as agents of long-term development instead of medium-term extraction. The traditional mining value proposition has centred around providing good jobs and reliable local revenues, but with the caveat that both dry up upon mining closure. Currently, regulatory systems across Canada are premised on the societal expectation that closure equals total land reclamation. This expectation doesn’t match the science of what’s actually possible, and neither does it always match local ambitions. More and more, we’ve heard stories of communities viewing former mining assets as valuable investments into new community futures. Communities—particularly those that are economically marginalized and geographically remote—are increasingly interested in repurposing sites into new economic ventures and reusing capital infrastructure where possible. Closure could provide ongoing benefits if it were designed and enabled to do so.

Collaborating to Realize Shared Benefit and Pave a Path Forward

While rethinking the future of mine closure may help offset the boom and bust cycle for communities, it does not fully solve for the uneven distribution of benefits. In a session that Watershed Partners facilitated at the PDAC 2020, participants pointed to a looming crisis in the sector, avoidable only by a pivot away from short-term benefit seeking and prioritization of local leadership.

What long-termism or community-led mining could look like is an open question. If these suggestions are harbingers of the future, mining companies and their financial models will look very different in the years to come.

But how does change happen?

A first step would be to recognize that a mine is more than a single site. It is an entire human ecosystem that includes communities with a shared interest in the land, financial centres, and other stakeholders with an interest in the outcome of the site. This system is complex, and it needs to be informed by diverse perspectives to ensure that it changes in ways that reflect the best interests of all players. And fundamentally, these players must be ready to collaborate to achieve shared success. That also means that they must be prepared to change themselves. Governments will need to be ready to evaluate whether they must change their policy aims and, in turn, their regulatory systems. Mining companies will need to consider whether they are ready to cede control over projects to host communities. Investors, Indigenous peoples, civil society organizations will all expect—and deserve—a seat at the table.

If these actors come together, mining companies will no longer need to forge a series of bilateral relationships to move projects across the regulatory finish line. Instead, they’ll be entering into genuine multilateral relationships where decision-making is spread across parties. This means a diffusion of benefits, but also of responsibilities. This can only work if all parties act in good faith and are driven by mutually compatible visions and goals. Everyone near a mine site has something to gain; and with global stakes high, collectively we all have something to lose if collaboration is not achieved.

If true collaboration occurs, mining will become a means to an end, as opposed to an end in-and-of itself. And the “end” will be sustained benefit for local communities, the Canadian economy, and the world.

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