Sustainability
Mining in the eye of the beholder
Hostility to the mining industry from the general public is the result of a long history of disregard for the environment and communities surrounding historic mining projects. In Brazil, the negative public opinion of the industry was crystalized by the Brumadinho and Mariana disasters. In order to maintain a license to operate, the mining industry needs a consistent and defined approach to community engagement and communities work. “The way to think about value added from mining is that the industry transforms natural capital into social and economic capital,” said Rohitesh Dhawan of the ICMM. “By harvesting resources that exist underground, responsible mining transforms them into value for society both through the role mining plays in social and economic development and in producing vital products.”
The industry seeks to convey both its recognition of culpability for past wrongs, and the positive benefits that the mining industry offers to the public. At EXPOSIBRAM, a central theme was the need to break down the image of mining activity as enriching few, while impoverishing many. The industry seeks to communicate that rather than being environmentally unfriendly, mining is environmentally essential.
On a broader scale, the mining industry seeks to establish qualitative criteria for legislation aimed at regional development. In the state of Bahia, bidding processes include this type of classification, with companies required to establish the value of social investment policies. For example, 10% of royalties could go to social programs in the community. The key is to be able to communicate to the state and the public the value and potential the mining process brings to the region. “We noticed an increase in demand for our services following the dam accidents in Mariana and Brumadinho. These events caused an extremely severe environmental impact in the surrounding communities. In consequence, federal legislation now requires mining companies to formulate stricter contingency plans for dam failures," said Maria Albuquerque, CEO of Synergia Consultoria Socioambiental, adding: "We are seeing a change in mentality among mining companies. They no longer view ESG criteria solely as a prerequisite for obtaining mining licenses. They are now considered key corporate objectives.”
"Maritime emissions are considered Scope 3 emissions for mining companies and account for approximately 90% of the mining industry’s total emissions."
Bernardo Vettorazzi, Business Development Manager, RightShip
Community engagement
The shift towards more autonomous mining has benefits in terms of cost and risk-reduction, but it takes away one of the core value-adds a mine brings to a community: job creation. Indeed, when a mine seeks to enter an area, a core sell is that the mine will generate significant long-term employment for the community. As mines increasingly automate their processes, this value-add shrinks. The jobs that are created are often temporary, only generated for the duration of the major construction period of a development project. Lucas Sardinha, project director at the consultancy Herkenhoff & Prates, said: “Historically, job generation was the promise offered by mining projects. Currently, the number of direct employment opportunities is declining, while indirect positions are increasingly being staffed by specialized professionals who work alongside service providers on construction sites across Brazil.”
Counteracting this challenge requires greater attention to the needs of the individual communities. As job creation becomes a lesser offering, mines need to increase the direct benefits they bring in other areas to ensure that local communities remain on board with the projects. Community development does not allow for a one size fits all approach, as each community has its own desires and needs.
Determining and fulfilling those needs is delicate work that requires attention and careful targeting. Herkenhoff & Prates, for example, carries out communities work for Samarco, which has a footprint that impacts more than twenty municipalities with over a hundred territorial units that have individual vulnerabilities and strengths. Cristina Margoto, executive director at Herkenhoff & Prates, explained: “Each of these units has its unique vulnerabilities and strengths, making community engagement highly complex, even within a single project by a single company.”
With relationships between mines and local communities strained, the presence of a third party is essential. The public in Brazil has a severe lack of trust in the mining sector, and to regain that trust and rebuild relationships requires investment. Mariana Nahas, CEO of NMC Sustentabilidade Integrativa, a company that develops social impact projects and connects mining companies with the communities in which they operate, has observed a real failure of effective communication: “It is important to have an intermediary who understands the local social dynamics to better manage the relationship between the company and the community. We have found that local people are more willing to communicate their needs to an impartial mediator.”
The mining companies interviewed for this report have supported not just local infrastructure, medical services and educational facilities, but also engaged directly in facilitating the growth of the local economies. José Cláudio Nogueira Vieira, director of Clam Meio Ambiente, provided an example: “We were recently hired by an iron ore company to support a group of women to increase their income by enabling them to sell their products directly to the market rather than through an intermediary.”
"In Brazil, we observe a high demand for licensing services. Regulations are becoming increasingly complex and companies are required to report several variables and environmental information to government bodies."
José Cláudio Nogueira Vieira, Director, Clam Meio Ambiente
Green gets greener
Brazil’s energy matrix is famously green, dominated by renewable hydropower. That matrix is beginning to shift as wind and solar continue to rise, and the race to 100% carbon neutral energy production picks up pace.
However, energy access across the country is uneven. A well-developed power grid is critical for connecting the rest of the country to the northeast, where the majority of Brazil’s energy production is centered and where the dry and windy conditions facilitate a growth in wind power. In addition to the insufficient power grid, there is also a shortage of wind equipment manufacturers in Brazil, with demand for equipment outpacing supply.
In 2022, Vale began operations at one of the largest windfarms in Latin America, Sol de Cerrado, which will supply 16% of all power consumed by Vale in Brazil when operating at full capacity. The land was previously unused, and now hosts a 776 MW windfarm, with the capacity to support of a city of 800,000 residents. For mining companies, wind energy is a positive due to its negligible social impact. In many cases, the local people have no land ownership, and the process of wind farm construction provides them with legitimate deeds. Importantly, agricultural activities can take place on the same land as wind energy generation.
"A crucial aspect is community preparedness for emergencies. Historically, mining operations lacked comprehensive emergency planning, but today they are legally obligated to incorporate it."
Cristina Margoto, Executive Director, Herkenhoff & Prates
The mining industry is also looking to supplement traditional renewable energy resources with green hydrogen and green ammonia. In September 2023, Vale announced the signature of an agreement with H2 Green Steel to study the construction of an HBI plant, which would run on green hydrogen for green steel production.
Brazil’s existing renewable energy matrix, supported by investments in green energy along all parts of the mining chain, supports the existence of a truly green mining industry. From wind power to green steel production, the complete mining processes can be decarbonized, and Brazilian mining is leading the way. Eduardo Bartolomeo, CEO of Vale, explained the company’s ambitious decarbonization targets: “We plan to invest up to US$6 billion to reduce our Scope 1 and 2 emissions by 2030. We have also set a target of reducing our Scope 3 CO2 emissions by 15% by 2035 – equivalent to New Zealand’s total emissions.”
Image by Marcio Isensee e Sá at Adobestock