Ignoring ESG issues early in the process lays the foundation for ongoing obstacles
A world of greater awareness and enlarged social consciousness, depleting resources, and a growing population has changed the ESG landscape. We know this.
Biodiversity disruption is a far more common community objection nowadays, and water use and quality is regularly a major source of conflict if not managed. These are just two standard examples, but the list of considerations is growing.
The common response to raising environmental and social concerns during exploration 20-30 years ago was that these points would be revisited once there was a mine plan. This felt logical to many at the time but has repeatedly proven illogical in practice.
By the time a company has drilled out a resource and is scoping a mine, it has already established some form of reputation with its stakeholders – if there has not been adequate interaction and engagement, that impression is likely to be a poor one.
The reality resources companies need to accept is that stakeholders don’t need to wait for construction to start in order to stop it. And, mainly thanks to social media, those stakeholders are better educated and eager to engage earlier in the process. This causes a challenge for those companies with an ill-considered ESG approach, but opens the door to welcome conversations for those who have accepted the new reality and made provisions.
It is critical to understand the environmental and social considerations early in the process because these concerns will be themes throughout the life of the project. Explorers need to do their homework around local contexts before the boots are on the ground, and issues need to be well understood before the rigs are turning.
It is much more efficient to avoid, rather than mitigate later.
For a resources company, the near-term objective is simply a matter of ensuring its reputation remains in good standing through what might ultimately be an unsuccessful exploration campaign.
The long-term repercussions are clearly far greater, with thorough and adequate stakeholder engagement and ESG management during exploration creating the fibres for a longer relationship between a company and its stakeholders throughout what becomes a development and then mining operation lasting decades.
Miracles shouldn’t be expected. Like all aspects of project development, understanding of the ESG considerations and how best to manage those will improve over time.
But this makes it all-the-more important to start that process as early as possible to be fully engaged with stakeholders and have a sophisticated understanding of their needs when the greater-impact stages of development and mining are being planned then executed.
To successfully engage early, resources companies need to have their processes clearly mapped out at corporate level as a framework for engagement. This must be done with an acknowledgement that every project has its only considerations and nuances.
They should expect initial stages of engagement to be potentially complicated and lengthy because of the inherent sensitivities around land use. This approach will ultimately save time and money during more capital-intensive phases of the mining cycle.
The good news is the industry is getting better but we should not kid ourselves that we will crack this nut; it will be an ongoing process of learning and improvement.
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This thought leadership piece is in partnership with the Mining Journal's Future of Exploration.
