ICMM: Mining with principles at AngloGold Ashanti
Mine closure is a dynamic and iterative process taking into account environmental, social and economic considerations at an early stage of mine development. Fundamental to this process is the need to consider closure as an integral part of a mine operation's core business.
ICMM (International Council on Mining and Metals) case study:
In Colombia, ICMM member AngloGold Ashanti has a ground-breaking plan to create – and integrate – a park and biodiversity centre into its Quebradona copper-gold project. This park has been designed to preserve the local environment in the area and to restore elements of the eco-system to their natural state. This project is in line with AngloGold Ashanti’s ambition of reducing – and wherever possible offsetting – impacts on biodiversity.
The initiative is intended to gradually facilitate the regeneration of more than 2,500 hectares of indigenous tropical dry forest and high mountain forest. The re-introduction of this flora will help regenerate the area’s unique ecosystem, which has been impacted by farming and other land uses.
The development of the park is anticipated to take place in 2021 and, in a departure from traditional mine development models, will be integrated into the Quebradona project during construction. Extensive engagement with local communities took place in preparation of the plan, including Jerico, the nearest town to the proposed development site.
BHP deliberates ditching fossil fuels for greener mining
The world’s biggest miner, Australian-based BHP, is supposedly considering withdrawing from a multi-billion dollar contract, which would see the company generate more than US$2bn due to mounting pressure over aligning its business with ongoing climate concerns and ESG-compliance measures.
Exiting the agreement would mean BHP escalate its distancing from oil and gas and subsequently cut down on the amount of fossil fuels used by the company when mining.
It’s estimated that the petroleum business being debated upon could actually be worth around US$15bn but is still under talks to be put up for sale.
Global Mining Giant Considers Greener Future
BHP has made itself clear that it wants to avoid becoming unable to sell its assets. As competition within the market increases following higher numbers of oil giants wrestling with investors to deal with climate pressure, so too are the number of mining rivals looking to make environmental changes for the future.
However, BHP currently has the upper hand as a stalwart mining company that established itself back in the 1960s, allowing it the time to grow and dominate over other fast-appearing mining competition.
Mike Henry, BHP Chief Executive, has an optimistic outlook for the future of oil and gas despite worries over rising demand to align his business with the Paris Climate Agreement. Henry argues that prices remain promising due to a lack of industry-wide investment.
BHP’s petroleum business won’t be easy to say goodbye to. Forecasted to generate around 6% of profits during the ongoing financial year (US$2bn), and around US$1.6bn revenue produced by BHP petroleum in the six months leading to December 2020, BHP is due to take a hit no matter what agreement they choose.
On the other hand, distancing itself from thermal coal and petroleum would arguably aid the company’s case to possible - and valuable - investors who may be required to fund BHP’s increased output to places such as Australia and Mexico in the near future.
BHP considers cutting billion-dollar contract to aid climate
An exit away from petroleum has the potential to be “a powerful corporate catalyst,” says Dominic Kane, Analyst at JP Morgan.
“We believe an exit would likely ring-fence BHP’s exceptional cash flows for non-fossil fuel organic growth, mergers and acquisitions and generous shareholder distributions since BHP could avoid a major new capital investment phase this decade in petroleum.”
BHP is also set to sanction a giant US$5.7bn Canadian potash mine in August of this year, already seeing potash as a long-term substitute for gas and oil going into the future. The company has also previously announced plans to abandon its 80% share in its joint endeavour with Mitsui, owner of two lower-quality mines in Queensland, Australia.
BHP is scheduled to report its annual results on August 17, after which it may become clearer on whether the company will choose to focus its shift to a low-carbon economy or whether it will stay with its current contract into the coming year.