Study: To Avoid Losses, Companies Need to Engage with Local Communities
One of the major realities of mining in foreign areas is the involvement with habited communities. Issues with local people and social protests are a grave decision mining companies have to come to grips with or face potential financial losses says a recent study by the University of Queensland.
The research firm, Centre for Social Responsibility in Mining cited one multi-billion project where the costs caused by protests amounted to $20 million a week in delayed production. The reaction against mining developments, however, doesn’t occur entirely from local communities.
The study said a Credit Suisse report from 2012 indicates the impact from governance, social and environmental risks across the Australian stock market was $21.4 billion, of which resource projects accounted for $8.4 billion. The report specified Queensland as one of the main locations mining companies have been forced into lengthy and costly legal battles by activists and landholders.
According to the report’s author, a community conflict has the capability of costing a company $100 million a year.
“Interviewees estimated that around $10,000 is lost for every day of delay in lost wages and the costs of maintain an exploration camp.”
So what can mining companies do to prevent these losses?
Community engagement figures prominently in the Sustainable Development Framework adopted by the International Council of Mining and Metals (ICMM). The organization guides miners on upholding human rights, respecting cultures and contributing to “the social, economic and institutional development” of the communities where companies operate.
London-based AngloAmerican has implemented a variety of community-engagement programs in recent years, including Social Way. The program involves the company using its skills and resources at the local, national and international levels at host communities as well as recognizing the special status and needs of indigenous people. AngloAmerican also utilizes its SEAT (Socio-Economic Assessment Toolbox) program for managers, which provides the guidance and support framework for managers through the processes of community engagement and sustainable development. At the company’s Sishen iron ore mine in South Africa, AngloAmerican employed its SEAT process to engage the local community and as a result, the mine operates a wellness clinic that is now open to the community.
To continue successful mining in new areas, mining companies must be aware of the local communities and the impact they play. Engaging in a collaborative process with communities benefits all parties involved and assures sustainability in an environmental sense, a community sense and a business sense.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.