Sustainable Mining: An Oxymoron or Future-Proof Strategy?

Bachelor of Commerce and Bachelor of Laws student Rachel Wang is a winner of the 2021 Natoli Student Ethics Competition for an undergraduate student.

Long dubbed as Australia’s ‘economic backbone’, the mining sector is facing mounting scrutiny over its unsustainable practices. A recent UN report found that extractive industries are responsible for 50% of global carbon emissions and 80% of biodiversity loss. Rio Tinto Group, the world's second-largest mining corporation, is certainly no stranger to public criticism. Once dubbed ‘a poster child for corporate malfeasance’, it continues to be plagued by controversies including the destruction of prehistoric Aboriginal caves at Juunkan Gorge, Western Australia. Could businesses like Rio Tinto truly be sustainable?

Mining companies have a long way to go, however the path to sustainability must be trodden. The SDGs provide a direction. Central to Rio Tinto’s sustainability initiative is ‘responsible consumption and production’ (SDG 12), with a focus on decarbonisation. In 2020, 75% of electricity used at managed operations came from renewable sources. Not only is decarbonisation environmentally beneficial, using clean energy also has clear links to profitability given the increasing cost-competitiveness of renewables. To reach environmental targets, further research into tailing reprocessing, close-loop recycling and waste-reduction must be conducted.

Secondly, the ‘social license to operate’ is a crucial success factor for mining projectsworldwide. Failing to engage with key stakeholders, especially Indigenous communities, can compromise government relationships, access to finance and community support. For instance, the Juunkan Gorge incident precipitated three executive resignations, a federal inquiry, shareholder revolt and significant reputation damage. The survival of mining operations is dependent on the support of local communities and industries. Thus, stakeholder partnership (SDG 17) is not only an ethical requirement, but key to generating long-term value.