Truth and transparency are vital to restoring the trust mining needs to “transform” over the next decade or so, but fresh thinking is also key to an “equitable transition”, a panel featuring veteran mining leader Mark Cutifani told the second LIAMforum virtual event.
Speaking on the opening day of the forum – aimed at Gen Z and named in honour of Liam Zisman – Cutifani and Development Partner Institute colleagues Peter Bryant and Florence Drummond agreed mining faced an almost unfathomable challenge as it sought to address a deep social trust deficit while mobilising to meet surging global demand for energy-transition materials.
Cutifani said all parties involved in the shift – direct and indirect – had to have a “voice”, given the potential scale of the disruption and the fact that mining often impacted remote communities, historically in positive and negative ways.
“Why I think the debate has to change is because for too long in our industry … people that don’t agree with us have tended to be ignored and I think that’s wrong,” he said.
“As an industry we have to think about and deal with [other] voices very differently.
“We have to engage with those who see the world differently to ourselves and try and find common ground.
“Burdens need to be shared. Quite often local communities take the greatest burden and we all forget that, including us as industry leaders; including governments and other leaders in society.
“We tend to leave the local communities to either fend for themselves or defend a position with a mining company, when at the end of the day it’s a much broader community and social responsibility.
“We are short the minerals we need to navigate the energy transition, so we are going to need to access some materials that people might not otherwise want to see mined.
“How do we balance that shared burden and shared responsibility?”
Cutifani, the former CEO of mining major Anglo American now heading Vale’s base metals arm, formed the Development Partner Institute (DPI) with Bryant about a decade ago. Drummond, a First Nations Australian, became DPI executive director earlier this year. She co-founded Indigenous Women in Mining and Resources Australia in 2017.
The trio’s discussion about transformation of the natural resources sector to meet demands of the global energy transition, and “a more equitable transition”, was among 28 sessions featuring more than 130 speakers at the four-day virtual forum.
LIAMforum chair Raziel Zisman, a partner with co-sponsor Whittle Consulting, is the father of Liam Zisman, an environmental geoscience student at Ontario’s Brock University who tragically died at the age of 19. Brock University vice-chancellor Dr Lynn Wells said this week one of the key goals of LIAMforum was to “engage the imaginations of young people”.
“Liam aspired to help build a more environmentally responsible society, something we believe in strongly here at Brock,” she said.
The forum’s raison d’etre is simple: “The natural resources sector, including energy, mining, forestry [and] agriculture, faces a crisis unless it finds a way for Gen Zs to get involved.
“There is a pressing need to involve the next generation in the transition to a sustainable society. Their passion and talents are urgently needed. They can, and undoubtedly will, contribute to finding brilliant solutions to the challenges we face.”
Bryant, chair of US-based advisory firm, Clareo, said young people brought “a clarity of thinking that’s unencumbered by current paradigms that help drive the mining industry”.
“The industry faces tremendous challenges, both technically and from a sustainability and social perspective,” he said.
“That clarity of thinking [is] fundamental to being able to drive the transformation that is necessary for the industry.”
Bryant highlighted global communications firm Edelman’s annual Trust Barometer measuring government, corporation and institution trust and credibility ratings on the back of a large, multi-national survey.
“We know through Edelman’s work that mining has the lowest trust of any sector on the planet right now,” he said.
“At the ICMM [International Council on Mining and Metals] leadership forum in London next week, which I’m speaking at, the theme is trust.
“Everything we’re saying is kind of at nought if we can’t trust each other.
“And this is operating in a world where, I think, trust in institutions and other things is at its lowest ebb ever and where people don’t actually speak to each other.
“The capital shortfall in mining is quite significant.
“We need to scale up mining in an unprecedent way – doubling copper production, etc, in the next 10-to-15 years – and capital doesn’t like some of the aspects of mining unless we address these issues.
“Mike Henry of BHP talked last week at Critical Minerals Week [International Energy Agency event in Paris] about $200 billion of capital being needed, and only $50 billion being [committed] … a $150 billion shortfall.”
Cutifani said: “If you build a mine and the community doesn’t want you there you can add 30-to-40% to the cost and in all likelihood it’s not going to be economic anyway. So it’s in your interest to work out how to do it in an appropriate and sensitive way.
“That’s my experience after 46 years.
“If you can’t get there in a collaborative way it’s going to make it extremely difficult if you try and force it. So why would you?”
Raziel Zisman said a shortfall in supply of critical minerals was likely, hence the price of metals would rise.
“Will this mean that just the rich countries will be able to afford a green transition and enjoy a cleaner environment?” he asked. How would poorer countries participate in an “equitable transition”?
Cutifani said the answer wasn’t clear.
“It’s a problem,” he said.
“Let’s not beat around the bush.
“What we’ve seen, whether it’s through COVID, and other issues, is where, in the end, economic capacity to afford things that others can’t afford tends to see the more developed countries, or wealthy countries, do better.
“I think that’s a real issue.
“I’d like to think that in those countries that do have natural resources, that those natural resources can be developed and the broader societies can benefit as a consequence.
“That requires [good] governance [to] create a resource benefit as opposed to a resource curse [by] taking the revenues from resources in the countries that do have them and investing in new infrastructure and in particular social infrastructure that benefits the countries for the next 50 years.
“Energy transition offers up new strategic opportunities around infrastructure development for broad community benefit.
“But that whole strategy is important.
“We’ve got to think about how we deal with that … and do things differently and better.
“Otherwise, as Raziel suggests, the rich just get richer and the poor get poorer.”
Drummond said multi-stakeholder dialogue was key to building trust and a better framework for change.
“I don’t think we talk to each other enough,” she said.
“That’s how we can understand what our positions are, what our issues are, what our challenges are … and also what the opportunities to improve are.
“With the rush to develop energy mineral projects, how do we ensure we still take time to have that dialogue, and to build trust and respect?
“I think it’s the biggest risk here with the rush towards the energy transition.”
