MINING CONSULTANTS
should contend with investment potential , community relations , sustainability and other elements when coming up with solutions .
This focus is helped by the fact consultants often service such stakeholders independently , as CSA Global ’ s van Olden explained .
“ In the last decade , there have been phases of increased M & A where we ( CSA Global ) have been on either side of deals , supporting vendors with technical work and supporting buyers with due diligence reviews . We have also done a lot of work representing the interests of lenders such as private equity funds and banks .”
During this due diligence work , van Olden has noted an increased need to integrate ESG requirements into transaction support work .
“ It is important for our clients to be able to demonstrate to investors that their project meets increasing global requirements for responsible and sustainable mining ,” he said . “ A lot of people understand that nowadays you cannot obtain bank finance without showing your ESG credentials ; you need more than just a good NPV and payback period .”
Such requirements are coming much earlier in the mining process , according to RPMGlobal ’ s Baudry .
“ The other key change is the need for clients to be investor-ready much earlier in the development cycle ; not just from a technical perspective , but also from a social licence to operate standpoint ,” he said .
These ESG requirements have led to pretty much all the consultants IM spoke with bolstering their in-house ESG teams .
It has also seen environmental specialists enter the fray , building relationships with mining consultants as a way to give miners that ‘ holistic ’ offering Treen spoke of .
A great example is ERM ’ s 2019 acquisition of CSA Global , which created a “ cradle-to-grave team with specialists in each of these important technical and ESG related skill sets ”, CSA Global ’ s van Olden said .
He explained : “ ERM ’ s business is really strong at the front end of mining around the environmental and social impact assessment and permitting phase . They also carry out a lot of work around safety in mining operations , as well as around the closure , rehabilitation and reclamation side of the business .
“ Prior to the acquisition , they effectively had a CSA-sized hole in their pipeline covering exploration – all that front end geology and understanding , resource estimation work – mine design and engineering , through to the hydrogeology and operations to support and optimise mines .
“ There was no duplication between ERM and CSA – we ( CSA ) basically slotted in and filled out that whole value chain of work .”
“ The floodgates of innovation have really opened in mining over the past four to five years and technology has developed rapidly to provide safer , more efficient and more transparent processes ,” DMT Group ’ s Dr Vasilis Roubos says
As a global provider of sustainability advisory services , ERM has witnessed a significant change in the mining industry ’ s ESG requirements over the last decade , according to ERM Partner , Toby Whincup .
“ ESG and sustainability has evolved from being a niche technical team and corporate responsibility discussion , into a fully-fledged board-level focus on risk and opportunities ,” he told IM . “ It now represents a key lever of business transformation , business resilience and value creation for companies .”
The last three years , in particular , have seen fundamental shifts driven mainly by the investment community , according to Whincup .
One only need look at the letter BlackRock CEO , Larry Fink , issued to clients at the start of the year as an example of this change .
In short , Fink , who heads up one of the biggest asset management companies in the world , said BlackRock would place sustainability at “ the centre ” of its investment approach and would exit investments that “ present a high sustainabilityrelated risk ”.
It is not just BlackRock making such demands of the companies it invests in , according to Whincup .
“ Equity investors are now asking : ‘ what are the community risks or reputational risks associated with these deals ?’ They do not want people with placards marching down the street and protesting out the front of their buildings because of what they are investing in ,” he said .
“ Even the financial exposure around things like TCFD ( The Task Force on Climate-related Financial Disclosures ) is coming into the due diligence process .”
Recently , the ‘ S ’ of ‘ ESG ’ has become more of a focus in the mining sector , he explained .
“ This was initially driven by economic exposure to mine-dependent communities at closure , but , since COVID-19 has emerged , it ’ s becoming prevalent in the role the mining sector is playing in
the economic response to COVID for camp communities , FIFO workforces , etc ,” he said . “ That need to keep workforces healthy and keep the business resilient through such challenges is being acknowledged more widely .”
He concluded : “ ESG now forms a critical part of business success and resilience across the mining spectrum – from juniors , through to majors , and across the supply chain .”
In-built expertise
MEC Mining ’ s Catania argues his company is already equipped to deal with this increased ESG focus .
“ ESG and sustainability form part of the normal operations at MEC Mining ,” he said .
“ A lot of the work we undertake relates to minimising the operational footprint of a mine through efficient mining practices . This may be seen through a change in mining sequence , mine design or operating methodology – all of which improve the ESG credentials of the project .”
MEC Mining has been able to embed this into the company ’ s culture through internal and external training , in addition to strategic partnerships with specialists in health , safety and environmental management , he added .
Similarly , Treen sees ESG in every aspect of the work Stantec carries out for mining clients .
“ Stantec is focused on having a sustainability mindset in all of our design and consulting work ,” he said . “ ESG and sustainability are relevant across all disciplines , which means every individual ( the engineers , environmental scientists , etc ) working on a project must contribute to fulfilling the requirements .
“ The cross-discipline participation and partnership means that everyone – not just the sustainability group – has a role to play in helping an operation achieve the company ’ s ESG goals and sustainability standards .”
RPMGlobal ’ s in-house environmental and sustainability teams are helping miners hit their ESG goals by carrying out audits aligned with the International Finance Corp ’ s and Equator Principles ’ latest ESG-related standards ahead of project financings , while helping prepare junior and mid-tier miners on “ investor preparedness reviews ” and “ mitigation planning ”, according to Baudry .
He said of the subject : “ There is now a broader understanding in the market that if a project doesn ’ t meet community and government expectations , it will not succeed .”
DMT ’ s Dr Roubos is all too aware of this opinion , and can point to one of the company ’ s sustainability initiatives as an example of how it is helping the wider mining industry meet ESG expectations .
Last year , DMT introduced CERA , the first global certification scheme to guarantee a consistent
12 International Mining | OCTOBER 2020