ESG the big challenge for mining in 2023

Environmental, social and governance (ESG) factors will be the main challenges faced by the global mining industry in 2023, according to a study by consulting firm Ernst & Young (EY).

"Good governance is always going to be a top trend, but investors and analysts are smarter. It’s no longer a ‘check the box’ exercise," an unnamed senior executive was quoted as saying in the study.

"Miners must have a holistic vision with an ESG approach to gain the trust of investors and the community," the EY study states.

Chilean miners are facing their own difficulties in this regard, with two important companies, Minera Los Pelambres and SQM, having to deal with protests over environmental problems and a labor dispute in the last few days.

These difficulties have arisen despite Los Pelambres having received accreditation from The Copper Mark for responsible mining management and SQM this year being highlighted as one of the best companies in terms of sustainability by the Dow Jones Sustainability MILA Pacific Alliance Index.

In the case of Los Pelambres, residents of the village of Panguesillo in Salamanca municipality have been blocking access to the copper mine in Coquimbo region for more than two weeks, claiming the operation is causing environmental damage and demanding compensatory measures.

The controller of the mine, Antofagasta Minerals – 60%-owned by the Luksic group and 40% by a Japanese consortium – has classified the event as force majeure and said in a statement that "the sole objective of the blockade was to oblige the company to disburse financial resources for individual or family benefits."

Nevertheless, the company has said it is willing to talk and hopes to resume normal operations as soon as possible. It is working to clear the blockade and resolve the situation with representatives of local communities. There has been no material impact on production, it added.

The protesters "are preventing access, throwing stones, complaining about the lack of water and the environmental damage by the private mining company. As a municipality we cannot provide a solution," Luis Jeneral, legal representative of Salamanca municipality, told BNamericas.

Minera Los Pelambres has also irked residents because it is thought to be working to suspend contracts with several local companies "that have no other clients than the mining company," Matías González, president of the trade association of Salamanca merchants and businessmen (Acesa), was reported as saying by local paper El Día.

Meanwhile, Chile’s biggest lithium producer SQM has been threatened with a strike by workers over salary increases and bonuses, among other benefits, although it has now reached a pre-agreement with one of the unions that appears to have prevented the labor action from going ahead.

The offer by the company will still have to be ratified by members to prevent the strike, "but it is most likely that everyone will accept it," union representative Omar Durán was quoted as saying by Reuters.

Under the deal hammered out, SQM would provide various benefits to more than 1,000 workers at its subsidiaries SQM, SQM Salar, SQM Nitratos and SQM Industrial.