Mission critical: How miners can ensure future value growth

Based on our research and practical experience, successful ESG transformations commonly include four elements: 

1. Align strategy, stakeholder demands and communication 

Historically, mining companies operated with two broad stakeholders in mind (that is: shareholders and government). Now, however, things have changed. From next-gen consumers to NGOs, and from local communities to investors and lenders, the sheer number of stakeholders has increased. As has their savviness around ESG. 

In response, you need a clear understanding of who all your stakeholders are. And determining your material topics, including: 

• identifying material risks and opportunities 
• undertaking scenario planning, and 
• prepping for crisis management. 

Ask yourself: what would the worst-case scenario look like from a stakeholder perspective? Who would be the loudest voices in opposition? And importantly: what are the opportunities if we get this right? 

Next, map your stakeholders according to these material topics, and then reach out to each of them. Engaging your stakeholders involves building an ongoing relationship with open dialogue. It’s all about building trust. And this requires full and transparent reporting on ESG matters to tell your authentic story. 

2. Take a people-centric approach

As we make the transition to clean energy, it’s more important than ever to take a people-centric approach to mining and support your (many) stakeholders. 

Take employees, for example. The Centre for Policy Development estimates around 300,000 Australian jobs connected to coal oil and gas exports could be affected by global decarbonisation by 2050. For many organisations, taking a people-centric approach will involve supporting displaced workers, and so it’s essential to consider: how will you engage your displaced employees? And how will you re-skill them?

At the same time, consideration must be given to other complex issues such as energy supply and digitising your mine, and the impact on your multiple stakeholders. If you only ever consider them through your own lens, as an operator, then you won’t fully see the nuances, and miners must take a people-centric approach to achieve a truly just transition.

3. Strike a balance between a project's acceleration and adequate regulation

Green tape is nothing new to miners. And while environmental regulation is essential, the challenge is: how do we maintain high levels of regulatory compliance, but do it in a more efficient way? 

The good news is there’s plenty the sector can do to meet regulations and streamline the process for getting projects reviewed, critiqued, and approved. Miners in Queensland, for example, recently consulted on the state government’s Resources Industry Development Plan³ – a plan that features eight actions for improving regulatory efficiency⁴. 

Specifically, the industry can:

• collaborate with government to develop a fit-for-purpose extractive industry assessment framework 
• co-design a ‘regulatory sandbox’ process to improve the process for new economy mineral projects
• use tech and data platforms to improve application quality
• undertake scenario planning to pre-empt potential regulatory hurdles.

4. Focus on supply chains

Provenance of inputs is now a major concern, and miners and their customers need complete visibility of their supply chains, plus a handle on the provenance of all raw materials. This is not just for security reasons, but also to satisfy stakeholders’ ESG expectations around modern slavery regulations, environmental concerns and more.

At the same time, our research found proactive miners are moving down supply chains into value-added processes, and the next generation of critical minerals miners will focus on extraction, processing, refining and, potentially, even manufacturing to deliver a more secure and higher-value supply chain. 

Played right, Australia is set to become a supplier of choice for ethically sourced materials if we think differently and act now.