Some people may be shocked to learn that Canada owns 75% of the world’s mining corporations. The mining community has taken a lot of flack for its environmental impact over the years. In recent times, many strides have been taken to move the industry towards a greener future in Canada. This article outlines some of the practices and policies in place to push the mining industry to a more sustainable model.
With Canada producing some of the lowest carbon-intensity mineral and metal products in the world there is no doubt that it can and should play a much more significant role in providing the materials the world needs to get to net-zero. This is demonstrated by the Mining Association of Canada’s (MAC) prestigious Towards Sustainable Mining® (TSM) Excellence Awards, including the TSM Environmental Excellence Award and the TSM Community Engagement Excellence Award.
The Awards, that were established in 2014, recognize innovative sustainability mining projects focused on community engagement and environmental stewardship. In May of 2022, The Mining Association of Canada’s (MAC) Community of Interest Advisory Panel has selected the Gahcho Kué Mine, owned as a Joint Venture between De Beers Group and Mountain Province Diamonds, and Copper Mountain Mining Corporation.
The Ní Hadi Xa initiative, meaning “People Watch the Land Together” in the Chipewyan Dëne Sųłné language, was established in 2014 by Gahcho Kué Mine and six Indigenous communities. Together, they conduct environmental and traditional knowledge monitoring at the diamond mine located in the Northwest Territories.
Ní Hadi Xa is managed by a seven-member Governance Committee, with six of the seven members representing local Indigenous signatory communities – Deninu Kué First Nation, the North Slave Métis Alliance, the Northwest Territory Métis Nation, the Tłı̨chǫ̀ Government, the Łutsel K’e Dene First Nation, and the Yellowknives Dene First Nation. One seat on the committee is held by Gahcho Kué.
The program employs five Indigenous individuals from local communities, including those with environmental management and traditional knowledge experience. Ní Hadi Xa provides a forum for collaborative environmental monitoring and management, with all policies and monitoring programs co-designed and approved by the Governance Committee. The initiative supports in-depth discussion on mine development updates and proposals, with any environmental monitoring findings or concerns directly relayed to Gahcho Kué for incorporation into the mine’s environmental management and monitoring framework.
“With the increasing overall awareness on the role mining plays in providing the materials required for the global energy transition it is clear that our sector is being recognized as essential more now than ever, specifically the leadership role Canada can play in providing the minerals and metals needed in the tech we depend on. Our high environmental and labour standards, exemplified through TSM, are a competitive advantage when it comes to responsibly filling the growing need for mined materials.”Pierre Gratton, MAC’s President and CEO
TSM supports mining companies in managing key environmental and social risks. A national independent Community of Interest Advisory Panel oversees the program, with representatives from Indigenous communities, environmental organizations, labour, finance, local mining communities, social and faith-based organizations and academia. TSM goes beyond principles and requires mining companies to annually assess, publicly report and verify their performance at the facility level. Performance is evaluated across a set of detailed environmental and social performance standards, including tailings management, climate change, water stewardship, Indigenous and community relationships, safety and health, biodiversity conservation, crisis management and preventing child and forced labour.
These awards are just one step of many that aim to change the face of the Canadian mining industry. They are in response to the Canadian government’s policies.
A program that helps mining companies in Canada operate in the most socially, economically and environmentally responsible way at home is spreading internationally, through the practices of these companies abroad and the assistance of the Canadian Trade Commissioner Service (TCS).
Towards Sustainable Mining
The Towards Sustainable Mining (TSM) initiative, launched in 2004 by the Mining Association of Canada (MAC), is a world‑recognized sustainability standard that is helping build capacity within the global mining industry. The initiative has been adopted as a Canadian industry standard for responsible business conduct promoted by the TCS and the Government of Canada.
Participation in TSM is mandatory for members of MAC in Canada. Ben Chalmers, senior vice‑president of MAC, says it was established in the country in an effort to “drive performance improvement in environmental and social issues.” TSM applies to the industry association’s 44 members but is only mandatory within Canada, although many of those companies voluntarily implement the standards in their overseas operations.
The Minerals and Metals Policy of the Government of Canada: Partnerships for Sustainable Development (the Policy) describes, within areas of federal jurisdiction, the Government’s role, objectives and strategies for the sustainable development of Canada’s mineral and metal resources.
The Policy builds on important commitments and initiatives of the Government including Creating Opportunity, the Government’s Mining Agenda, A Guide to Green Government, the Toxic Substances Management Policy, and the principles and goals of the Whitehorse Mining Initiative (WMI) Leadership Council Accord. It does this by contributing to three key elements of the Government’s agenda: promoting economic growth and job creation, furthering an efficient and effective federation, and meeting the challenge of sustainable development.
The Policy has six major objectives:
- integrating the concept of sustainable development in federal decision-making affecting the minerals and metals industry;
- ensuring the international competitiveness of Canada’s minerals and metals industry in the context of an open and liberal global trade and investment framework;
- advancing the concept of sustainable development of minerals and metals at the international level through partnerships with other countries, stakeholders, and multilateral institutions and organizations;
- establishing Canada as a global leader in promoting the safe use of minerals and metals, and their related products;
- promoting Aboriginal involvement in minerals and metals-related activities; and
- providing a framework for the development and application of science and technology to enhance the industry’s competitiveness and environmental stewardship.
What is TSM?
Towards Sustainable Mining (TSM) is a commitment by the Mining Association of Canada (MAC) to responsible mining. It is a set of tools and indicators to drive performance and ensure that mining risks are managed responsibly at its members’ facilities. Adhering to the principles of TSM, members demonstrate leadership by:
- Engaging with communities
- Driving world‑leading environmental practices
- Committing to the safety and health of employees and surrounding communities
The program was established in 2004 and its main objective is to enable mining companies to meet society’s needs for minerals, metals and energy products in the most socially, economically and environmentally responsible way.
TSM’s core strengths are:
Accountability: Participation in TSM is mandatory for all MAC members. Assessments are conducted at the facility level where the mining activity takes place—the only program in the world to do this in the sector. This provides local communities with a meaningful view of how a nearby mine is faring.
Transparency: Members commit to a set of TSM Guiding Principles and report their performance against the program’s 23 indicators annually in MAC’s TSM Progress Reports. Each facility’s results are publicly available, and are externally verified every three years.
Credibility: TSM includes ongoing consultation with a national Community of Interest (COI) Advisory Panel. This multi‑stakeholder group helps MAC members and communities of interest foster dialogue, improve the industry’s performance and shape the program for continual advancement.
Source: The Mining Association of Canada
“The Government of Canada must make decisions based on the best available scientific evidence while balancing economic and environmental considerations. It is in Canada’s best interests to safeguard our water ways for healthy fish populations like the Westslope Cutthroat Trout, respect Indigenous peoples’ culture and way of life, and protect the environment for future generations.”The Honourable Jonathan Wilkinson, Minister of Environment and Climate Change
To achieve sustainable development, environmental, economic and social considerations must be taken into account as early as possible in the decision-making process. To help the Government meet this challenge in the area of minerals and metals, the Policy enunciates a number of principles for sustainable development-based decision-making, including:
- a responsive public policy framework;
- the role of the market mechanism;
- the role of regulation;
- the role of non-regulatory approaches;
- the importance of science;
- endorsement of the concept of pollution prevention;
- affirmation of the precautionary principle; and
- recognition of the polluter pays principle.
The World Commission on Environment and Development (the Brundtland Commission) defined sustainable development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” This definition has been accepted by the Government of Canada and represents a point of departure for applying the concept to minerals and metals. As a building block of this Policy, sustainable development in the context of minerals and metals is considered as incorporating the following elements:
- finding, extracting, producing, adding value to, using, re-using, recycling and, when necessary, disposing of mineral and metal products in the most efficient, competitive and environmentally responsible manner possible, utilizing best practices;
- respecting the needs and values of all resource users, and considering those needs and values in government decision-making;
- maintaining or enhancing the quality of life and the environment for present and future generations; and
- securing the involvement and participation of stakeholders, individuals and communities in decision-making.
In defining sustainable development in the context of minerals and metals, it should be recognized that the economic and social benefits of mineral development are not all consumed by the present generation. Current investments in human and physical capital benefit future as well as present generations.
Local trade commissioners abroad help Canada’s mining companies look at their business practices and operate responsibly from an ethical, environmental, social, security, and health and safety standpoint, Miranda says. “The TCS supports the company at the local level and the national level.”
He explains that Canadian mining companies impart technical knowledge and business practices as well as sustainability principles in such places. A prime example of where this has happened is in Finland, with companies such as Agnico Eagle Mines Ltd., a senior Canadian gold mining company. Agnico Eagle operates in a range of environments, including mines that are close to urban centers as well as in remote, environmentally sensitive locations, although the challenges of operating in a responsible manner in both contexts remain the same.
“We’re convinced it’s a level of excellence that mining companies should aim at,” says Michel Julien, vice‑president of environment at Agnico Eagle, which has eight mines in Canada, Finland and Mexico, with exploration and development activities in those countries as well as the U.S. and Sweden. The company, which has a head office in Toronto, employs more than 10,000 people and in 2017 its total gold production was 1.7 million ounces.
Practicing Responsible Resource Development
Many mining companies have been practicing responsible resource development long before sustainability became a mainstream business theme.
After all, mines can’t be built without a social license to operate, which comes from the general, ongoing acceptance from local communities, Indigenous peoples and governments to extract resources from their regions.
However, increasing investor concern in how miners manage extra-financial risks and acknowledgement of the industry’s role in providing critical materials for the transition to a low carbon economy has stressed the importance of mining’s commitment to improving environmental, social and governance (ESG) performance.
In KPMG’s latest global mining risk survey, 91 per cent of industry respondents said having a clear ESG strategy was imperative, while 83 per cent said their success is measured against ESG targets.
Although 92% of Canada’s top 100 companies (by revenue) now report on sustainability according to the 2020 KPMG Survey of Sustainability Reporting, an issue for miners is how their ESG efforts are being measured amid a growing number of national and international standards. KPMG’s 2020 global mining risk survey) highlights that only about 35 per cent of respondents globally and 27 per cent in Canada agree that investor ESG expectations and measures are clearly understood and consistent across the market.
“This can make it challenging for businesses and investors alike to respond to ESG risk management and performance,”Roopa Davé, a partner in KPMG’s Sustainability Services practice.
Teck’s Sustainability Goals
Teck Resources Ltd., a Vancouver-based producer of copper, steelmaking coal and zinc, is “very committed to responsible mining and mineral development,” Marcia Smith, the company’s senior vice-president of sustainability and external affairs, said during the KPMG mining forum.
“It’s not a stretch to say sustainability is really at the heart of everything we do,” she said. “That may sound sort of corny to people, but it really isn’t. It’s part of what we do every day as we produce the materials the modern world needs.”
Smith said communities, Indigenous Peoples, governments and investors, expect the company to meet ambitious and continuously improving ESG standards.
“If we can’t do that then ultimately, we will not be able to deliver value to our shareholders,” she said.
In March 2020, Teck set a goal to be carbon neutral across its operations by 2050 and has several measures to meet that goal, including reducing emissions and using cleaner power sources.
“We are proud of the progress that we’re making,” Smith said, “but there is no doubt in our minds that the work we have to do in ESG and sustainability is a constant work in progress. I think that’s the whole point: it is a continuous improvement journey.”
How Wheaton Precious Metals Sees Sustainability
Randy Smallwood, president and CEO of Vancouver-based Wheaton Precious Metals Corp., which invests in mining companies through streaming agreements, said ESG performance is critical when deciding which companies to do business with and invest in.
“I can’t underscore the importance of being selective about where we invest,” he said during the KPMG forum.
“We want to make sure the assets we’re investing in have good foundations and good strength behind them,” he added. “Long term success in any industry, in any business, requires a good strong, holistic approach…. ESG is an important part of that: the licence to operate and to function.”
Smallwood acknowledged that Wheaton has a unique position as both an investor and company responding to its own investor needs. That perspective allows his company to work directly with its mining partners to ensure their ESG practices are aligned and up to the standards that Wheaton is measured on as well.
“We have an overlying mantra at Wheaton: ‘The more successful our partners are, the more successful we are,” he said.
The Call for Standardization
Both Marcia Smith, (Teck Resources Ltd. senior vice-president of sustainability and external affairs) and Randy Smallwood (president and CEO of Vancouver-based Wheaton Precious Metals Corp.) agree there are challenges to meeting ESG expectations given the different and growing number of local, national and global standards.
“I think the world needs to move to some standardization,” Smith said, describing the current roster of frameworks as “slightly overwhelming.”
Teck has aimed to narrow down its frameworks by choosing those it believes are most relevant to its operations such as the Global Reporting Initiative (GRI), the Task Force on Climate-related Financial Disclosures (TCFD) and the Sustainability Accounting Standards Board (SASB). Teck is also a member of the Mining Association of Canada, which has the Towards Sustainable Mining (TSM) standard, and The International Council on Mining and Metals, which has its own ESG principles.
Smallwood, who is also the current chair of the World Gold Council, said miners are constantly improving their ESG performance but agrees a more consistent reporting framework will help the companies and investors measure and analyze their results and is a driver for his involvement with the World Gold Council. Ultimately, a lot of these standards and frameworks have significant overlap, and it’s a matter of understanding that and focusing on what is important or material to the business and its stakeholders.
“It’s all good business [and] required to be successful,” he said of responsible mining practices. “We are always improving; it’s a journey we’re all on. So much of it comes down to how do we report our efforts and show some of these benefits and the progress being made… It’s a matter of putting those frameworks in place.”
And while it has historically been difficult to measure the direct shareholder benefit of having a strong ESG performance, Smallwood said companies that maintain a strong social licence tend to be more successful, which is reflected in how they’re valued by investors.
“When a company has a strong reputation, you can sense the level of comfort that shareholders and investors have with respect to that company versus ones that are a little bit more challenging and riskier,” he said. “It does make a difference from the investing side.”
Are Mining Operations Ready for the Green Future?
We are going to see a lot of change in this industry as global organizations and financial markets see decarbonization as both a requirement and a responsibility for mining organizations.
Leading companies are taking steps to decarbonize through a combination of solutions. Companies will also need to continuously improve their ESG performance to reduce risk and maintain their social licence to operate, particularly as stakeholders — from investors to governments to communities and consumers — keep a close watch on the industry’s activities moving forward.