Rio Tinto broadening cultural heritage management
In virtual seminars, which will include presentations from Board and Executive Committee members as well as experts in the field, Rio Tinto will outline actions it has introduced to strengthen its performance and governance of cultural heritage following the destruction of the rockshelters at Juukan Gorge in May 2020 and outline the steps it will take to further improve its performance.
One key step is the confirmation that an Indigenous Advisory Group (IAG) will be established to ensure Rio Tinto has a better understanding of Indigenous culture and issues in Australia, including at Board level. It follows broad consultation with Traditional Owners and Indigenous leaders with the aim to introduce more diversity and breadth of views, including external perspective, in decision-making.
Rio Tinto has also commenced work to review and re-define what is best practice for cultural heritage management in the mining industry. This work will be done in consultation with the IAG and other independent parties and will enable Rio Tinto to identify gaps in current protocols and provide a clear pathway to re-establish trust over time and regain Rio Tinto’s previous standing in this area.
Rio Tinto Chief Executive Jakob Stausholm commented: “We have reflected a great deal as a company and leadership team over recent months – listening, learning and responding by taking actions to better manage Traditional Owner partnerships and cultural heritage aspects of our business.
“One thing is clear – building meaningful and trusting relationships is fundamental. And that starts with Traditional Owners. We must focus on real engagement with our communities, understanding their felt experience and never forgetting that, ultimately, we are guests on their land. And, as guests, we must respect our hosts and work with them to understand their priorities and concerns and minimise our impacts.
“We also must remember that our stay is temporary. We need to ensure we leave a positive legacy. This is essential to our business. We are committed to doing the right thing and working with our hosts to earn the right to be a trusted partner once more.”
Following the events at Juukan Gorge, Rio Tinto reviewed its internal processes and also consulted widely with Traditional Owners, host communities, governments and other stakeholders. As a result, the company has significantly strengthened internal practices, policies and governance.
As part of Rio Tinto’s efforts to increase transparency in its approach to cultural heritage, the company has also committed to additional disclosures on the progress of heritage measures being undertaken. Rio Tinto is also engaging with a number of global investors and investor groups, to jointly identify additional disclosures on:
1. Progress against Rio Tinto’s own commitments and internal work-streams, (including Trusted Partnership Plan), external obligations and recommendations.
2. How Traditional Owners’ views are being sought and considered in shaping these commitments and Traditional Owners’ perspectives on how successfully these commitments are being met.
3. Enhanced governance arrangements in place to oversee the company’s progress against these actions.
4. How the company is working to advocate for enhanced sector-wide cultural heritage management and how this is consistent with Rio Tinto’s internal standards.
Rio Tinto intends to commence with interim reporting in the third quarter of 2021 and thereafter with predominantly annual reporting, coupled with periodic disclosure as appropriate. Further consultation with a broad range of investors and other stakeholders will continue to assist in developing these disclosures over time.
The two Communities & Social Performance: Cultural Heritage seminars will take place on 23 March, 9.00am-10.30am (AEDT) and 10.30am-12.00 pm (GMT). The presentations will be via webcast followed by a question and answer session. Presenting at the seminars will be:
Jakob Stausholm – Chief Executive
Megan Clark – Non Executive Director and Sustainability Committee Chair
Mark Davies – Group Executive, Safety, Technical and Projects
Kellie Parker – Chief Executive, Australia
Brad Welsh – Chief Advisor, Indigenous Affairs
Alicia Sherwood – General Manager, Communities & Social Performance, Pacific; and
Clayton Walker – President & CEO, Iron Ore Company of Canada
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.