INDUSTRY OUTLOOK
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Mining execs seek opportunity amid green risk A
Global mining executives consider environmental and social issues as the top risk and opportunity in the year ahead.
s the mining industry moves towards a greener future, emissions targets and stakeholder pressure are playing a part in the changes the mining industry is undertaking. The EY report, Top 10 Business Risks and Opportunities for mining and metals in 2022, outlines how environmental and social risk has jumped to the top of the agenda for mining executives. It includes a survey of 200 global mining executives who have given insight into the most significant risks the industry is facing in the next year. The report reveals that 25 per cent of mining executives list environmental and social issues as the number one risk and opportunity for the industry, after it placed fourth in last year’s survey. This is followed by decarbonisation in second place and licence to operate, which ranked as the most significant risk last year. EY global mining and metals leader Paul Mitchell says stakeholder pressure has
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brought environmental and social risk to the forefront. “The biggest factor has been the influence of the capital markets. Those capital markets reflect more and more what society is thinking,” Mitchell tells Australian Resources & Investment. “The other factor is just change in leadership ranks and just a better recognition of what people are looking for. “The average CEO (chief executive officer) tenure is five years but 50 per cent of them turn over in two to three (years) and so you can almost get generational change in CEO attitudes every two or three years, and so those factors have been playing out and meaning this is much higher up the agenda for people and a much higher focus.” Mining companies have been pushing a greener focus in recent years as stakeholder demands for environmental, social and governance (ESG) factors increase. Fortescue Metals Group launched Fortescue Future Industries, which was established
in 2018 and has created high purity iron ore using 100 per cent green energy, as one of its ESG initiatives so far. BHP has shown a similar focus at its polymetallic Olympic Dam mine after signing a renewable energy supply agreement with Iberdrola as part of its zero-emissions position for 50 per cent of its electricity consumption by 2025. The diversified mining giant has also joined forces with South Korean steelmaker POSCO under a $US10 million ($13.5 million) memorandum of understanding (MoU) to reduce greenhouse gasses in steelmaking. The MoU aims to improve coking coal quality used to power steelmaking processes and explore emission reduction technologies such as using biomass in steel creation. “I don’t think (ESG) is catching the mining industry off guard anymore at the top end,” Mitchell says. “If you went back to three or four years ago, they were surprised by how rapidly the change happened. “Investor and community relations have really changed. If you went back in time,
