Global Mining Industry Faces 'Trust Deficit' Despite Being Asked To Produce More Metals For Energy Transition

Zinger Key Points
  • Miners are not communicating its value to decarbonization efforts very well
  • "To regain trust, the mining industry needs to protect and restore nature," CEO says

TORONTO—The public does not trust the mining industry even as it expects miners to produce more metals to decarbonize the global economy and raise standards of living around the world, according to mining executives speaking in Toronto this month at the yearly gathering of the Prospectors & Developers Association of Canada.

The focus on minerals has broadened the interest in mining, but also the scrutiny, said Colin Hamilton, a commodities analyst with BMO Capital Markets. At the same time, the mining industry is facing long permitting times, a lack of labor, cost inflation and a "trust deficit" with the general public, he said.

"We've been asked to mine more than ever before with a smaller footprint than ever before," said Jonathan Price, CEO of Teck Resources Ltd. TECK. "The world understands that they need you; they just don't want you. The challenge is one of trust."

Also Read: Energy Transition Metals At Stake: Potential US Mining Law Update Pits Industry Against Environmentalists

He pointed to a 2023 GlobeScan survey of more than 30,000 people that ranked mining dead last of 18 industries when it comes to "fulfilling responsibilities to society," even behind the pharmaceutical industry and the oil and gas sector.

"To regain trust, the mining industry needs to protect and restore nature," as the world is not only facing risk from climate change but also from biodiversity loss, Price said. "We as a sector are in a great position to address this. We have been managing and working with the land for generations now."

He pointed to a January commitment by International Council on Mining and Metals members to a "nature positive" future that includes protecting and conserving pristine areas of the natural environment and restoring and enhancing landscapes around mining operations.

"It's great for communities to see rehabilitation in real time," Price said.

Permitting time is a key challenge

Permitting comes down to local governments and Indigenous people, so engaging with those groups "has to start very early," Price said.

"It's challenging to get a mine permitted in Canada," he noted. "It's infinitely harder to get a mine permitted in the U.S."

Historically, miners have come into areas with a lot of money and, perhaps, arrogance, Price said. "That model doesn't work anymore," he added.

Mining companies need to be clear with communities about their plans, said Sonia Scarselli, head of metals exploration with BHP Group Ltd. BHP. "That should be a collective partnership and ownership of resources," she said.

The public needs to see an equitable spread of benefits from the mining industry, said Deshnee Naidoo, CEO of Vale SA's VALE base metals business.

Industry isn't communicating its value to decarbonization

Naidoo noted that amid the push for electric vehicles, carmakers and their suppliers need sustainable supply chains. "Ethical sourcing is a real need," she said.

In the rush to secure critical minerals, creating a standardized set of environmental data for mining companies to collect would be helpful, Naidoo said. "That would go a lot toward eroding this trust deficit."

The mining industry has come a long way in terms of community collaboration, diversity and safety, but it has been hesitant to share these gains with the public because of high-profile accidents that have happened and the history of the industry, Deshee said.

"What the mining industry does not do well is promote itself," FPX Nickel Corp. FPOCF CEO Martin Turenne told Benzinga at the trade show.

The story the industry needs to communicate is its intrinsic value to the decarbonization of the global economy, Turenne said.

"Western Governments around the world are waking up to this supply chain-critical mineral issue," particularly with electric vehicles, said Kent Masters, CEO of Albemarle Corp. ALB. "China has a big head start."

Now Read: EXCLUSIVE: Battery Companies Back Small Miners For Long Term, Provide Bright Spot As Funding Market Crashes

Image created using artificial intelligence with Midjourney.

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