Refining Climate Resilience
South Africa recently experienced flash floods in KwaZulu-Natal, causing loss of life and property, damage to homes, roads and railway infrastructure, and in cities like Gqeberha, taps have run dry. We can debate whether poor infrastructure or ineffective, local government entities are responsible, but it is clear that weather patterns have shifted significantly, some would argue, irreversibly. In fact, Boston Consulting Group’s (BCG’s) latest mining and climate resilience report echoes this sentiment, stating that a temperature increase of 1.5°C actually translates to 3°C in Southern Africa, with predictive models indicating that this occurrence could further exacerbate extreme weather events (and resulting effects). Looking at this somewhat inevitable scenario, a pivotal question remains: is there a sustainable way for the mining sector to build ongoing climate resilience?
Before examining possible impacts and solutions, it is important to identify and understand the key drivers of sustainable mining practices. These include changes in local and global norms and standards, including regulatory frameworks imposed by government and international bodies, as well as the added complexities of demographics and migration. Digital innovation, artificial intelligence and machine learning cannot be discounted, particularly when it comes to the the adoption of smart mining; aimed at enhancing efficiencies and reducing the use of vital resources such as electricity and water.
Furthermore, stakeholder pressure, particularly from civil society, has brought company environment, social and governance (ESG) activities to the fore, along with increased scrutiny. This also pertains to differences in funder and/or investor behaviour regarding ESG and the prevention of so called “green washing” – the process of providing misleading information about how an organisation’s products or services are more environmentally sound than they actually are. Lastly, current geopolitical relationships and economic shocks, for example the Russian conflict in Ukraine, have disrupted supply chains and resulted in price inflation. This has led to stiff competition for energy supplies, which may have (regrettably) relegated ESG priorities further down the list.
When it comes to climate change, the pressure points on mining companies are both direct and indirect. The impacts could include effects such as heavy rains or flooding (making pit or underground conditions unsafe or more expensive to mine), water shortages and excess dust, rendering equipment maintenance more critical and potentially more costly. A mine’s energy mix could also be impacted, affecting when and how it processes ore or waste. In addition, personnel may be exposed to increased risks such as more exposed to damaging sunlight, resulting in serious skin conditions, thus increasing the need for surveillance and changes to occupational health and safety regimes. Local community interests also need to be considered, especially when mining companies are becoming primarily responsible for the provision of infrastructure, employment and health and education services, which are traditionally the domain of governments or state institutions.
Is there a plan(et) B?
When looking at the possible repercussions, the situation, as it stands, seems rather bleak. However, building climate resilience is possible but focus must be placed on specific factors. It is essential to understand the current scientific research and information available regarding climate change and its impacts, and to narrow these down to relevant potential effects on a specific mining operation or locality. Next, is accurately defining ESG initiatives, targets and time frames and aligning these to the mining and environmental strategy of the operation. This is to be followed by the development of appropriate organisational capabilities (strategies, structures etc.) and frameworks to benchmark, monitor, measure and evaluate outcomes and impacts. Crisis intervention plans, in anticipation of major weather-related events or catastrophes, also need to be formulated by defining systems and processes and allocating resources for employees, communication and leveraging stakeholder networks to respond effectively.
It is clear that players who are proactive rather than reactive when it comes to uncertainty will have an advantage going forward. It is imperative that mining companies view uncertainty as an opportunity to future-proof their operations by monitoring exposures, driving global positioning and implementing strategic approaches. Developing climate change resilience means dedicating time, resources and effort within mining companies to shift ESG from a narrow focus on compliance only, to prevention and risk mitigation.
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