Putting ESG to Work
Successful programs provide benefits internally and externally,
while improving the mining industry’s image
By Steve Fiscor, Editor-in-Chief
The E defines how the company interacts with the environment. The S describes how the company treats its employees and the stakeholders, who are impacted by the mine or the mining company. The G explains how the company runs. Does it operate ethically? Is the board and management trustworthy? Do its actions match its policies?
A successful ESG program begins with governance. Proper governance provides clear accountability and transparency by guiding a company’s management and decision-making process. Without a governance commitment, the environmental and social aspects of the program will not be as successful as they could be. Each level throughout that chain of command can impact ESG metrics. That’s why it’s important to explain the goals of the program and how people can contribute.
Setting realistic and attainable goals is also important. ESG programs track performance, and document success and failures. Recognizing a failure and daylighting it allows the company to improve.
Safety as a Foundation
In its latest sustainability report, Frances
Fragos Townsend, corporate responsibility
committee (CRC) chair for Freeport-
McMoRan, discussed safety. “The
safety of our people is a foundational
Freeport value and our top priority,” she
said. “The health, safety and well-being
of our workforce is the responsibility of all
company leaders, as well as the board.”
Following a contractor fatality at the Morenci mine and a marked increase in recordable injuries in the first half of 2022, Freeport’s CRC focused on identifying and addressing emerging challenges. “Management’s analysis of the increase in recordable injuries in 2022 revealed that many of the incidents involved new employees or employees working under new managers,” Townsend said. “This challenge is particularly complex in North America where we experienced a higher than normal turnover rate during the year and face continued labor shortages. These insights are critical to directing the appropriate resources and training to where they can make the most significant difference in safeguarding our people.”
As a result of this analysis, Freeport’s management team has sharpened its focus on safety training specifically for new employees. They have placed a renewed emphasis on active engagement by supervisors and leaders in the field. The oversight and interaction with contractors has been strengthened to help ensure they are meeting Freeport’s high safety expectations.
Recovering from
Bad Decisions
A little more than a year ago Glencore
Ltd. pleaded guilty to foreign bribery
and market manipulation schemes. The
Swiss-based firm agreed to pay more
than $1.1 billion in criminal fines and disgorgement.
The guilty pleas were part
of coordinated resolutions with criminal
and civil authorities in the U.S., the U.K.,
the Democratic Republic of Congo and
Brazil. In its latest sustainability report
Glencore Chairman Kalidas Madhavpeddi
explained how the board’s investigation
committee spent the prior four years
overseeing the response to the relevant
investigations. He said the board and the
committee considered carefully the communication
of the resolutions to ensure
that the relevant details of these were
transparently set out so as to be clearly
understood by all stakeholders. The work
of Glencore’s investigations committee
continues today.
Cultural awareness is an important concept that needs to be communicated throughout all levels of the company. A failure to do so could be costly. In May 2020, Rio Tinto destroyed rock shelters at Junkan Gorge, on the land of the Puutu Kunti Kurrama and Pinikura (PKKP) people in Western Australia. The company fell far short of the values it espoused. The company’s response was poor and it damaged relationships with many of its stakeholders. Three years later, the company said it is focused on finding better ways of working with partners, to respect, value, celebrate and conserve cultural heritage for future generations.
During November, Rio Tinto signed a remedy agreement with the PKKP Aboriginal Corp. and agreed to establish the Junkan Gorge Legacy Foundation. As part of the agreement, Rio Tinto will provide financial support to the foundation to progress major cultural and social projects including a new keeping place for storage of important cultural materials.
Gender Balance and Equity
One of the common ESG goals among
mining companies is gender balance
or employing more women in what is
still a male-dominated industry. In May,
BHP reported that the female workforce
at the Escondida mine in Chile had
reached 31.4%, advancing towards the
company’s goal of reaching gender balance
by 2025.
BHP said it has found that inclusive and diverse teams deliver safety benefits, have a better culture and are more productive than other teams, which creates a more harmonious environment and makes BHP a better place to work for all employees, regardless of gender. Another problem mining companies are trying to rectify is parity and discrepancies in pay. Parity is something that could easily be resolved during the onboarding process. If a mine is hiring an entry-level engineer, whether the position is filled by a male or a female, the pay should be the same. If the problem is not resolved during the on-boarding process it will manifest and only cause more problems internally if the pay discrepancies are discovered.
Recently BHP reported that a preliminary review indicated that employees across its Australian operations have had leave incorrectly deducted on public holidays since 2010. Approximately 28,500 employees were affected with an average of six leave days in total that have been incorrectly deducted from affected employees over this 13-year period.
The company has estimated that the cost of remediating the leave issue will be as much as $280 million. “This is not good enough and falls short of the standards we expect at BHP,” said Geraldine Slattery, president Australia for BHP. The company has engaged Protiviti to conduct a thorough review of its payroll systems.
Investing in Education
A little more than eight years ago, Agnico
Eagle Mines (AEM) launched a program
to provide access to higher education
for the community surrounding its Pinos
Altos Complex, near Ocampo, Mexico.
Students of all ages now have access
to two higher education institutions. To
date, 180 students have completed their
bachelor’s degree and 13 have completed
their master’s degree.
During a community assessment process undertaken by the Pinos Altos community relations team, citizens expressed frustration with the lack of access to education. The nearest college was 200 km from the area. Pinos Altos, working in coordination with local authorities, made the social investments to support the development, construction and operation of higher-level institutions, beginning in 2015. Today, with AEM’s support, the University Cultural Center of Basaseachi now offers Master’s degree options. And in 2020, an extension was added to the Technological Institute of Cuauhtemoc, which offers online educational courses, which helped meet the needs of students during the pandemic.
The Pinos Altos team also equipped the community library with new computers and internet access to the Institute’s online educational system, helping students and adults pursue college degrees in business administration, psychology, social work, industrial and systems engineering, among other career options. “As a result of these new schools, and access to online education programs, young people from the mountain communities now have access to higher education,” said Paola Cazares, sustainability director. “They can develop their skills and careers right in their own region, improve the quality of life for their families, and help create a sustainable community.”
Supporting Small Businesses
Nevada Gold Mines (NGM) launched a
rural economic development initiative,
the I-80 Fund, with an initial investment
of $5 million in July 2020. The program
was established to provide support
through relief and recovery loans to eligible
small businesses affected by the
economic impacts of Covid-19. Counties
included are those located along the Nevada
I-80 corridor — specifically in Elko,
Lander, Humboldt, and Eureka.
Phase one of the program focused on disaster relief and recovery loans for small businesses impacted by COVID-19, with loans ranging from $5,000 to $10,000 with a 2% interest rate. To qualify for the program, businesses must have been in operation prior to January 1, 2020. Phase two of the program, which started on January 1, 2021, is currently providing low-interest loans to help develop new and grow existing small businesses in the region, thereby driving economic growth in northern Nevada. Since inception, the I-80 Fund has provided $6.3 million of support for 57 small businesses in rural Nevada.
Environmental Compliance
Most modern mining operations have
well-defined environmental programs. It
begins during the permitting stages and,
as long as the mine adheres to the plan,
environmental compliance should not be
a problem. Where there is room for improvement,
however, is with emissions
and carbon intensity. For help in that
area, mining companies are looking for
support from suppliers.
FLSmidth was one of the suppliers to recognize this need early. The company, which supplies the full flowsheet technology and service to the global mining industry, established its MissionZero program to enable customers to become carbon neutral in future. “We have reduced our emissions 10% since 2020,” said Wouter de Groot, head of sustainability for FLSmidth. “The acquisition of the mining technologies business from thyssenkrupp has increased our scope 1 and 2 emissions somewhat but we are confident we will be able to meet our target to be carbon neutral for our scope 1-2 by the end 2030.”
Improving productivity is a central tenet of sustainability, de Groot explained. “Helping mines achieve this goal doesn’t necessarily need to be complex and expensive,” he said. “Incorporating advanced process control (APC) systems into existing operations can deliver clear productivity and sustainability benefits without major disruptions to production or involve large capital expenditure.” Citing two examples from copper mining operations, de Groot demonstrated the link between sustainability, operational improvement, and profitability. One of the mines installed LoadIQ mill scanning technology on its SAG mills, together with an APC system, and achieved a 10% increase in throughput. “Not only did this result in a $25,000/hr increase in revenue it delivered a 9% reduction in energy per ton of copper produced,” de Groot said.
The other copper mine, located in Chile where water is a scarce commodity, added an APC system to its tailings thickeners. This upgrade achieved a 14% reduction in water sent to the tailings storage facility (TSF), which saved more than 5 million cubic metres of water per year. “This mine pumps seawater more than 140 km to site for their process water,” de Groot said. “This is an expensive undertaking. We estimate this results in a potential saving of $18 million per year of water that would have otherwise gone to the TSF.”
Mining companies could target several areas in the processing flowsheet, de Groot explained, which include optimizing equipment efficiency, water and energy management, process optimization, recycling wear parts and media, and training and awareness programs. As part of its MissionZero sustainability program to accelerate the development and deployment of technology solutions to increase sustainability in the mining industry, FLSmidth has introduced the ‘MissionZero Mine,’ which consists of a series of commodity-specific flowsheets which articulates our current and future R&D work and vision for the flowsheet of the future.
“We are also focusing on pilot and full-scale validation of REFLUX Flotation Cell and coarseAIR flotation technologies,” de Groot said. “We are also developing specific technologies for commodities like battery metals, where further improvements in our pyro-processing technology portfolio can lead to further impact.”
Mining companies are looking to work with suppliers whose goals are aligned. FLSmidth aims to reduce its carbon intensity across its value chain, de Groot explained. “To that end, we have set Science Based Targets (SBTs) addressing our scope 1, 2 and 3 emissions,” de Groot said. “We have a target that by 2035, 30% of our spend will be with low carbon suppliers. Also, we aim to be carbon neutral in our scope 1-2 emissions. And finally, through our MissionZero program, we are accelerating the development and deployment of more sustainable technologies that help miners reduce their scope 1-2 emissions, which are our scope 3 emissions.”
FLSmidth has set a social responsibility goal of employing 25% women throughout the company and in management positions by 2030. That is an ambitious goal for a company that employs 11,000 people. “It’s a challenging target, but a necessary one,” De Groot said. “We have implemented a number of activities to improve our ability to attract, retain and further develop our female talent. These include mentoring programs for upcoming female leaders, engineering graduate programs to attract female engineers, improvements in our recruitment and significant steps to close the gender pay gap. We need to continue to do more, both as a company and as an industry.”
De Groot said he is excited by the growing interest of miners to test new technologies. “We need to accelerate the speed of adoption of more sustainable technologies and this requires a collaborative approach between OEMs and the miners,” de Groot said. “Several pilot and large scale projects have shown some very positive initial results, which instills confidence that we as an industry can step up to the challenge to decarbonize and reduce water consumption.”
Roadmap Toward Zeroexhaust
Emission Mining
Nouveau Monde Graphite (NMG) and
Caterpillar are mapping the development,
and testing of equipment and infrastructure
form NMG’s Matawinie mine in
Saint-Michel-des-Saints, Québec, Canada.
Equipment in commercial production
will be leveraged at first to support operations
during the pre-production phase
and early production years and are set
to be progressively replaced with Cat zero-
exhaust emission machines as they
become available.
“Not only will we benefit from Cat’s stellar expertise, renowned products, and latest technological developments, but our team will also be at the forefront of the electric revolution in the sector, sharing insight, testing equipment for further optimization, and providing battery materials to support electrification beyond our mine,” said Eric Desaulniers, founder, president, and CEO of NMG. “This collaboration truly reflects our vision for leadership and unified efforts to advance responsible mining practices and global decarbonization.”
Depending on the commercialization of Cat zero-exhaust emission machines, Caterpillar will reserve production slots, which should enable NMG to benefit from timely deliveries and technology enhancements throughout the duration of the contract. The agreements encompass machines such as hydraulic excavators, haul trucks, wheel loaders, dozers, and motor graders, as well as charging and energy storage infrastructure and equipment maintenance services.
NMG and Caterpillar’s Job Site Solutions have agreed on a novel solution to reduce NMG’s initial capital intensity for the Matawinie mine. The solution provides access to equipment through an hourly fee based on usage and includes asset management support to help improve uptime, predictability, and efficiency. Caterpillar, together with Toromont Industries Ltd., an authorized Cat dealer, will manage the maintenance and repair strategy for the equipment to maximize machine availability. NMG will also have the opportunity to lease or acquire machines if desired, through Toromont.
“This project is an exciting one as it highlights what is possible when an effective energy transition roadmap is implemented that bridges the traditional product line to an integrated, electrified site of the future,” Denise Johnson, group president for Caterpillar, said.
In 2022, Cat unveiled its first prototype of a battery-powered large mining truck, demonstrating the most recent advancement in technology and the extent of electric solutions by operating fully loaded to its rated capacity. Through this next stage of their collaboration, Cat intends to help NMG advance the Company’s Net Zero objectives.
Cat has also signed an offtake agreement with NMG for its active anode material to be produced at the company’s Bécancour Battery Material Plant. “A secure, resilient, and sustainable supply of battery materials is critical to actualizing the opportunities that electrification represents for our customers,” said Rod Shurman, senior vice president for Caterpillar with responsibility for the Electrification and Advanced Power Solutions Division. “This collaboration with NMG is an example of how Caterpillar is intentionally building out our value chain to support our customers’ sustainability objectives and further establish our role in the global energy transition.”
NMG’s planned all-electric operations powered by renewable energy combined with clean processing technologies are set to generate advanced materials with an exceptionally low climate change impact, in line with global decarbonization efforts.
U.S. Borax Becomes First
Open-pit Mine to Switch to
Renewable Diesel
Rio Tinto has completely switched
heavy machinery at its Boron mine in California from petroleum-derived diesel
to renewable diesel, or hydrotreated
vegetable oil (HVO), making it the first
open pit mine in the world to reach this
milestone. Rolls-Royce is supporting
the mining company in its endeavor and
has been testing mtu engines on HVO
in haul trucks and wheel loaders since
2022. During the 2,000 hours of operation
to date, Rio Tinto found that the engines
running on the renewable diesel
deliver similar performance and reliability
to traditional diesel.
The switch to renewable diesel at the Boron mine is expected to reduce CO2 by up to 45,000 metric tons per year, equivalent to annual emissions from about 9,600 cars. Close cooperation between Rio Tinto, Rolls-Royce and Neste led to the success, explained Sinead Kaufman, CEO, Rio Tinto Minerals. “This is an excellent example of what happens when internal and external partners collaborate toward a carbon reduction goal,” Kaufman said. “Support from the state of California has also been incredibly important, as without their vision, this would not have been possible.”
“The conversion of the first open pit mine to HVO is an important milestone,” said Cobus van Schalkwyk, director global mining for Rolls-Royce Power Systems. “With further sustainable offerings, such as reman or re-motorization solutions for vehicles or microgrids for energy supply, we are ready for the further future decarbonization at the mines.”
The initial trial to convert a Borax haul truck to renewable diesel was conducted in collaboration with fuel manufacturer Neste. Rio Tinto U.S. Borax used Neste MY Renewable Diesel during the trial. Neste MY Renewable Diesel is made from sustainably sourced, 100% renewable raw materials such as waste cooking oil and animal fat waste and can reduce greenhouse gas emissions by up to 75% over the lifecycle of the fuel compared to conventional diesel. The results of the trial showed that a haul truck powered by mtu engines running on renewable diesel had similar performance and reliability to haul trucks running on conventional diesel.
GHG Alliance Makes
Progress
Komatsu recently gathered members of
the company’s Greenhouse Gas (GHG)
Alliance at its Arizona Proving Grounds
(AZPG) to share progress and highlight
knowledge gained since the EVX (battery-
powered haul truck) was showcased
at MINExpo 2021.
At the event, alliance members had the opportunity to directly observe advancements made over the past year related to the performance and sizing of batteries, engage in a discussion on recent progress within the regulatory environment, and learn how Komatsu plans to leverage the company’s trolley system to advance understanding of battery truck performance in a dynamic charging environment. Specifically, alliance members saw the upgraded EVX (battery) truck running a circuit on battery, static charging of the battery with the truck hooked up to the trolley line via pantograph, and a run up the trolley line highlighting the battery being charged and increased speed in the dynamic environment.
The GHG Alliance was created to bring together mining industry leaders to work toward a shared goal of delivering zero-emissions equipment solutions. Alliance members have since been working to advance Komatsu’s power agnostic truck concept for a haulage vehicle that can run on a variety of power sources including diesel engine, battery and even hydrogen fuel cells with both static and dynamic charging capabilities.
Since the alliance was formed, membership has steadily grown and now includes the following companies: Antofagasta Minerals, BHP, Boliden, Codelco, Freeport-McMoRan, Grupo Mexico, Kinross, Rio Tinto, and Teck Resources. “Our alliance members were able to experience the substantive continuation of a journey that was started at MINExpo 2021 as we have advanced our understanding and development of this critical technology,” said Pat Singleton, product director for Electric Drive Trucks. “The past year has been filled with collaborative efforts between alliance members, technology partners and other industry stakeholders dedicated to achieving our common goals of delivering zero-emissions solutions to the mining industry.”
Komatsu said it is committed to minimizing environmental impact through its business, targeting a 50% reduction in CO2 emissions from use of its products and production of its equipment by 2030 (compared to 2010 levels) and a challenge target of achieving carbon neutrality by 2050.