18 Oct 2018 Story Extractives

Mineral resource governance in the 21st century: a conversation with Antonio Pedro

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Antonio Pedro is Director of the UN Economic Commission for Africa’s Sub-regional Office for Central Africa, and one of the lead authors of soon to be published report titled “Mineral resource governance in the 21st century: Gearing extractive industries towards sustainable development”. UN Environment interviewed Mr. Pedro to find out what mineral resource governance is and why it matters.

Minerals and metals are essential to human life. They are the inputs required by almost every sector of the global economy. Without minerals and metals, there would be no modern agriculture; no means of transportation such as aircraft, cars, ships and trains; no energy production and distribution (including from renewable energy sources); information and communication technologies; military defence; roads and other infrastructure; satellites; and even modern medicine. With the estimated growth of the world population from 7.3 billion in 2015 to 9.7 billion by 2050, 2.4 billion more people are expected to be using natural resources – an increase of 33 per cent (United Nations Population Division, 2015, median scenario).

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How can we meet the mineral resource needs of a growing global population without causing environmental issues?

Indeed, International Resource Panel (IRP) scenarios predict an increase of resource intensity up to 2050 because of the fundamentals you have referred to, which suggests that mining must continue and grow for the foreseeable future to ensure that minerals and metals remain available to our societies. The prospect of increased exploration and mining to meet future demand calls for a sharper focus on mitigating the impact of mining, especially as mining moves towards new frontiers where past experience in managing these externalities may not suffice. These resources will need to be produced more sustainably through responsible sourcing, sound mining practices, robust environmental management, and greater consumer awareness of the effects of consumption. Natural resources acounting needs to be mainstreamed to ensure proper valuation and costing of the earth’s assets, which should be reflected on how commodities are priced.

We should be aware that we all have incomplete and sometimes conflicting perceptions of natural resource availability. To address this, it is important to develop more robust foresight methodologies and capabilities to assess future minerals and metals demand as influenced by such factors as regulatory regimes adopted by countries; the power of incentives; bottom line issues including financial return, metal prices and operational costs; global economic growth; population dynamics; the development of the global middle-class and urbanization; geopolitical risks; the impact of technologies; advances in materials science; progress in minerals and metals recycling rates; and the possible substitutions of rare minerals and metals in their main uses. This wealth of information would strengthen minerals and metals governance and contribute to the design of better public and industrial strategies, including those aimed at mitigating the environmental impact of resource extraction and use.

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For sure and nowithstanding the fact that the probability of discovering more minerals is significant as large parts of the earth’s crust have not been explored yet, decoupling mineral resource use and environmental impacts from economic (and population) growth is an imperative for the world of 2050. To achieve this, we need first to use mineral resources judiciously as accelerators for the Sustainable Development Goals and to generate the greatest benefits possible out of it. We should equally extend the shelf life of minerals and maximize the value of each unit metric of primary mineral resources extracted by intensifying reusing, repairing, remanufacturing, refurbishing and recycling. Furthermore, it is important to continue the efforts to miniaturize our end-use products to reduce the overall need of primary mineral resources per unit of product. In other words, we should promote resource efficiency and accelerate the transition from the linear to the circular economy.

Technology advances in mining and mineral processing techniques could ensure that we can continue to mine efficiently and profitably mineral deposits at greater depths and/or with lower ore grades (without necessarily resulting in larger amounts of waste, higher energy consumption and water demand) in existing terrains, thus curbing the rush to mine in fragile environments such as deep-seated sea beds and the Arctic. Moreover, the expanded use of renewable energy in the extractive industry can significantly reduce the energy intensity of mineral resource production, a key contribution to a carbon-neutral industry. This should be a strategic goal of every company in the entire minerals and metals value chain.

Better enforcement of relevant regulations, the regular conduct of strategic environmental assessments and the use of landscape planning to arbitrate between conflicting land use options, could all contribute to the emergence of safer, well appreciated and environmentally-friendly extractive operations.

Overall, sustainable development should be at the core of the business models in the sector, where success is measured against a quadruple bottom-line: on the strength of economic outcomes, sound environmental and material stewardships, the respect of social values and aspirations, and the observance of the highest governance and transparency standards.  This is at the core of the Sustainable Development Licence to Operate (SDLO) whose narrative informs our report.

To accommodate the complex emerging supply and demand landscape, we have been very ambitious in our report! We are proposing six measures on how best to ensure ecologically viable continuity of global mineral supply over the coming decades. These are: 1) reach consensus on international targets for global mineral production; 2) monitor impacts of mineral production and consumption; 3) improve coordination of mineral exploration; 4) support investment and research into new mineral extraction technologies; 5) harmonize global best practices for responsible mineral resource development; and 6) develop maps and inventories showing the availability of recyclable metals. This calls for a coordinated international effort and for the establishment of an international body that would have a similar role that the International Energy Agency has in the energy sector.

How would you explain mineral resource governance to ordinary citizens?

I wish it was that easy!

Governance is a complex array of formal and informal systems, institutions, policies, rules, values, principles, codes of conduct, norms, laws, regulations, instruments, processes and body of practice that regulate political, social and economic interactions, shape behaviours, condition societal expectations, structure the design and the content of decisions, motivate change and determine development outcomes. The conveyer belt for collective action! Governance in its political, economic, financial, corporate, environmental and social dimensions has a regulatory and an enabling function. It is key to maximizing the development potential of the extractive sector and minimizing its adverse impacts.

We have witnessed an explosion of governance instruments at all levels, driven by the quest to promote sustainable development in the extractive sector. Yet, especially in developing countries, there has not been a significant structural change in the industry. It continues to be an enclave with inadequate linkages to local economies. This is among one of the fundamental tension lines between the interests of host countries to maximize the value of their resources through resource-driven industrialization and greater local value addition, and the home country’s preoccupation with securing access to raw materials.

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We need a global governance framework that consolidates existing instruments for easy application and understanding but expands its spatial and temporal scope, safeguards intergenerational equity, promotes deep decarbonization, enshrines the notion of joint responsibility in delivering sustainable development, and fosters the creation of shared value and benefits for all stakeholders including local communities, indigenous people, governments, captains of the industry, consumers, labour and institutional investors, to name a few. We believe that the Sustainable Development Licence to Operate as we formulated it will achieve these ambitious goals.

The report highlights the importance of a bottom-up approach and the role of miners in mineral resource governance. How can miners and local communities participate in improving environmental practices?

First, there is need to reduce the gap in each party’s perceptions about the sector. This requires credible platforms for multi-stakeholder consultations. In our report, we have argued that full implementation of the Aahrus Convention on “Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters” is a potent tool in improving the quality of such consultations, leading to good quality environmental management plans, which, of course, companies have to implement scrupulously, with governments and communities monitoring its implementation. All the necessary safeguards, including the use of bonds to address incidents and manage environmental and social liability potential beyond project closure, must be in place.  

There is growing concern about the impact of mining and processing metals on the environment, especially with respect to biodiversity and climate change. What needs to change in governing mineral resources to achieve sustainable development goals?

Most environmental assessment tools and authorizations are project site-based. This ignores the cumulative impacts in large mining districts and across the entire minerals and value chain. To address these shortcomings, we advocate for the use of landscape planning, cumulative environmental impact assessments and life-cycle assessment to systematically evaluate the potential environmental and social impacts of products, services, and technologies from “cradle to grave,” that is, from resource extraction to material processing, to manufacturing and fabrication, to use, and then to end-of-life.

Capacities in the institutions responsible for enforcing environmental regulations need to be strengthened, including in the project site.

The report suggests increasing the focus on innovation. The next UN Environment Assembly in March 2019 will discuss innovative solutions for environmental challenges and sustainable consumption and production. What would be your key message(s) related to innovation in mineral resource governance for policymakers?

In what Manuel Castells call the "network society”, the “state is no longer a nation state... it is a network state, where power is shared and negotiated among several social actors, at local, national, international and other levels”. In this environment, we can use technology and innovation to decarbonize production systems, generate stronger metrics and real-time traceable data, deepen the understanding of the issues, reduce information asymmetries, bridge spatial distance, boost confidence about existing schemes, improve the quality of social interactions, and, ultimately, create a renewed social capital for change, shared activity, initiative and collective leadership. 

To illustrate the case, I can pick blockchain technology which enables the geotagging of ores with cryptographic tokens. These allow the identification, trading and management of ore and the maintenance of secure and monitorable records from the moment of extraction all over to the lifetime of minerals and metals. This information can help improve the confidence of consumers, institutional investors and other stakeholders about the quality and transparency of existing product certification schemes. 

We need to build on the progress and the promise of this and other technologies!

The report “Mineral resource governance in the 21st century: Gearing extractive industries towards sustainable development” has been compiled over two years by 30 experts from academia, research institutions, international organizations, regional organizations, industry associations, the private sector and non-governmental organizations. The main objective of the report is to improve our understanding of how to better govern the mining sector to enhance its contribution towards sustainable development.

For further information: Janyl Moldalieva