SUSTAINABILITY
MAKING DECARBONISATION IN THE MID-TIER MARKET POSSIBLE AT THE GOLD INDUSTRY GROUP AND DELOITTE DIGGERS & DEALERS BREAKFAST LAST YEAR, PILBARA MINERALS, NORTHERN STAR RESOURCES AND IGO JOINED THE HOSTS TO DISCUSS HOW A LOWER-CARBON BASE CAN BE A REALITY FOR MID-TIER MINING COMPANIES.
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hile the decarbonisation movement has so far been led by major mining companies, their smaller counterparts often face the dilemma of committing to the costs associated with becoming greener. Despite this situation, Deloitte director – sustainability and climate change services, Michael Wood, considers decarbonisation as something that cannot be compromised. “What has accelerated in the last two years and moved from a soft to hard issue is investor pressure and through the supply chain,” Wood, speaking at the 2020 Gold Industry Group (GIG) and Deloitte Diggers & Dealers breakfast in KalgoorlieBoulder, says. “They’re putting upward pressure on producers and saying, ‘We want low or zero-carbon products through our supply chain.’” Deloitte partner Nicki Ivory often hears companies lament the costs involved with being greener, a domain of the big miners that they cannot afford to venture into.
(L-R) MICHAEL WOOD (DELOITTE), MARY HACKETT (NORTHERN STAR), DALE HENDERSON (PILBARA MINERALS), NICKI IVORY (DELOITTE), JOANNE MCDONALD (IGO), RICHARD HAYES (GIG) AND REBECCA JOHNSTON (GIG).
But is it not imperative even for mining companies to have an answer when investors ask, what is your carbon footprint? What is your emissions target and when will you reach it? How are you going to get there? “Being able to answer those questions is not a particularly expensive exercise,” Ivory says. “It’s primarily a diagnostic. There are scientific tools, techniques and processes that are being developed and are out there that can make that exercise relatively straightforward. “The mid-market is not going to be immune to (investor demand) and standing still is not going to be good enough anymore.” Pilbara Minerals is a mid-tier company that has felt the pinch of rising investor expectations in this way. “We’re in the battery business, we’re very much mid tier, we’re young (and we’re in the) second year of operation,” Pilbara minerals chief operating officer Dale Henderson says. “We have debt on the balance sheet, pricing pressure and we have partnered with some really, really big battery-related companies. These AUSTRALIANMINING
THE MID-MARKET IS NOT GOING TO BE IMMUNE TO (INVESTOR DEMAND) AND STANDING STILL IS NOT GOING TO BE GOOD ENOUGH ANYMORE.” pressures are really real. “(But) frankly it’s a great space to be involved in and do everything we can to integrate (decarbonisation) to our core business.” Pilbara Minerals has found success by balancing investments and cash on its balance sheet, which has helped the company to determine how far it wants to go on the decarbonisation path and when. The company has also chosen to be an early adopter, instead of an innovator or a laggard, in committing to a three megawatt increase in its solar penetration to five megawatts. On the other hand, Henderson says the domain of the supply chain is a new world that Pilbara Minerals is moving into.
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“To understand carbon flow, (we’ve) got to have a deep understanding of (our) partners to a level we’ve never (been) before,” Henderson says. “It’s a whole new relationship (and) we’re getting into that very quickly.” IGO company secretary and head of corporate affairs Joanne McDonald says that companies have to consider all the diverse elements of decarbonisation to reduce carbon impacts effectively. This calls for looking at the bigger picture beyond the narrow focus of emission targets. For Northern Star Resources non-executive director and chair of the environment, sustainability and safety committee, Mary Hackett, decarbonising mining is not symbolic of the industry bowing down to society’s expectations. She says it is neither a result of society’s pressure, nor is it because it’s the right thing to do. Instead, Hackett believes the opportunities to decarbonise make good business sense for many companies. “Over time, safety has absolutely become an imperative, and we know that a safe work site is an efficient work site. It’s a great place to work,” Hackett says. “The combination of all that makes a very good business outcome.” The opportunities for decarbonisation run even deeper in Australia’s mineral-rich ground. Deloitte’s Ivory believes the world’s move to decarbonisation is attracting the kind of commodities that are abound in Australia, particularly in Western Australia. This extends beyond just nickel and lithium, but to a host of commodities that will be needed to make batteries and other technologies. “There’s a huge opportunity for Western Australia,” Hackett says. “And the even bigger opportunity is to then start adding value to those commodities in our country instead of exporting them all. “We have seen that happening in the lithium space, and we will be seeing many more.” AM