Several industry experts at a recent industry event stressed the need for the mining sector to work to earn and maintain communities' and the greater public's trust.
Speaking before the Future of Mining Americas conference Oct. 21 in Denver, mining representatives discussed the important role that environmental, social and governance issues play in the sector's performance. Investors and consumers are interested in a company's societal role rather than simply the economic benefits it might bring to the table, speakers said.
Dean Gehring, executive vice president and chief technology officer for Newmont Goldcorp Corp., said in an interview that the mining industry as a whole is doing a much better job of working to earn the public's trust than it has in the past, and the trend is "absolutely in the right direction." But the sector could be doing more, Gehring said.
"I also think that it's been a big part of our culture in the industry not to draw attention to ourselves because it's not easily understood as a good industry, and it's more easily understood as an industry that's an assault to the environment and communities and health and wellbeing of people," Gehring said. "And so I think part of what we've done as an industry is, over many, many years, is just to try to avoid those conversations."
But the sector has improved on that front over the last 10 to 15 years, the executive said.
In a panel discussion before attendees, Gehring said he thinks that the world will require mining companies to make their performance metrics relating to environmental compliance publicly available in real time, and it would be better for the sector to begin doing so before it is mandated. This could help prevent the spread of inaccurate narratives about the industry as well, Gehring said.
It is critical for miners to establish a relationship with the communities where they intend to set up operations, Anaconda Mining Inc. COO Gordana Slepcev said on the panel. Otherwise, people are often scared that mining companies will come in, ruin the land and pollute the water, when, in fact, miners in some regions are required to have reclamation plans and face strict environmental regulations.
"This is not your grandfather's mine," Slepcev said.
The COO encouraged companies not only to put more information on their websites regarding the value of mining but also to promote it on social media to reach more people.
Cecilia Jofre, chief sales officer and business director for IsoMetrix, a supplier of software for compliance, risk and governance, said during an Oct. 21 presentation that over the past several decades, the definition of value "has been completely flipped on its head," with companies' value increasingly being linked to intangible assets such as reputation, people and intellectual capital.
"Some say that beauty is in the eye of the beholder," Jofre said. "I would say to you that value is in the eye of the stakeholder."
Many mining companies do not engage enough with the communities affected by their mines, Jofre said. But to attract investment, it is important to address environmental and social concerns.
"I have seen a huge change in the narrative of CEOs in the past 18 months ... from the shareholder primacy to looking after the legitimate interests of stakeholders," Jofre said in an interview. "We live in an era of great social accountability and transparency, so stakeholders look at companies, not only in mining but in all industries, to steward the organizations in a manner that is responsible."
Gehring said that while he does think that investors in the mining space consider ESG factors when making their investments, they are most focused on financial performance.
"Rarely do I see investors make decisions based on environmental performance. It's typically only on financial performance," Gehring said. "I think that investors are going to go in that direction more, so it's good for us as a company to be ahead of that. But I also just think it's the right thing to do. This is what we should be doing, even if the investors don't care about it."
George Hemingway, partner and head of the innovation practice with Stratalis Consulting, told attendees that "trust is the new competitive advantage," given its increasing importance to consumers and stakeholders.
While companies a decade or more ago were largely just expected to make money, society now expects them to prioritize earning and keeping the public's trust as much as churning out a profit, Hemingway said.
"The greatest uncertainty facing the mining industry is one of acceptance," Hemingway said. "It is one of trust."