Open mines

By John Loos

October 2008- From every angle, the construction of a new mining operation is a tightrope that must be delicately walked. Along with the obvious environmental impact, there are concerned local communities to assuage, human health issues to examine and potential human rights issues to face.

The past year hasn't exactly been a banner year in terms of ethical mining, according to the Covalence Mining & Metal Industry Report 2008, which reported an increase of negative news items regarding the industry and a decrease of positive news.

Covalence SA, Geneva, Switzerland, tracks the ethical reputations and behaviors of multinational corporations across 10 industries in an attempt to increase the amount of information available regarding sustainable development. Its ethical quotation system uses 45 criteria to determine a company's score, and Covalence has been scoring companies since it was founded in 2001.

Mixed review
From July 2007 to June 2008, there were 496 positive news items and 463 negative news items in the mining and metals industry, putting it eighth out of the 10 industries tracked. Eight out of 16 mining and metal companies performed negatively compared with the previous year, while three had a negative EthicalRate--the percentage derived from the total news items about a company and its overall EthicalQuote score. The EthicalQuote score is determined by combining the amount of positive news a company receives with the amount of negative news printed about it.

For the industry as a whole, areas that showed signs of positive development included job creation, health and safety, investment in Africa, water and global health, and poverty alleviation. Areas that had more negative activity were pollution, indigenous people and human rights.

However, even with the industry as a whole dipping somewhat, not every company scored low on the reputation index.

Heightened ethics
According to Covalence, since 2005, two companies in particular have broken from the pack and made notable strides in improving their mining ethics. This past year was no different, as both Rio Tinto plc, London, and Alcoa Inc., Pittsburgh, were again cited as exemplary performers in the industry. In fact, both companies placed in the top 10 performers across all industries tracked, which include the automobile, food and beverage, and banking sectors. Rio Tinto came in ninth overall, and Alcoa placed fifth.

For Alcoa, which has the top cumulative EthicalRate in the mining and metals industry over the past five years of 58 percent, the key to achieving and attaining such a sterling ethical reputation is simple: communication, and lots of it.

"When we go and talk to governments all around the world, we explain to them what we do and the approach that we take, and what they can expect from us," says Kevin Lowery, director of corporate communications for Alcoa. "As a result of people understanding and hearing about our processes, we tend to be given better opportunities on our projects because people appreciate the approaches that we take. We see our sustainability perspective as a competitive advantage to the company."

By keeping the doors of communication open between governments, local officials and communities in general, Alcoa is better able to gain trust and goodwill to pursue its mining projects. Just recently, it opened its first new smelter in Iceland in 20 years, a project of particular permanence, as smelters can run uninterrupted for half a century. It's also working on a mine in the Amazon, which brings up particular delicate questions about environmental preservation. Alcoa points to a mine it had in Australia where, once closed and the environment restored, the before-and-after pictures of the area are virtually indistinguishable.

Explaining its approach and intentions clearly and openly, Lowery says, is a key to maintaining and enhancing Alcoa's global presence. "We believe in embracing those people who aren't necessarily instantly supportive of our initiatives because we think the best way to address that is to sit down and talk," says Lowery. "Good things happen when you talk." MM

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