Mining Companies Can’t Assume ‘Social License’ To Mine – Mining CEOs – by Debbie Carlson (Kitco News – March 7, 2012)

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Debbie Carlson is Global news editor for Kitco News

Toronto (Kitco News)–Mining companies can’t assume local communities will automatically give them a “social license” to operate mines, so it’s important firms engage with people upfront, whether it is with indigenous leaders in Africa, Canada or South America.

 Mining executives said having a clear, corporate social responsibility plan should be considered part of the company’s core focus as how firms work with people can affect profitability.

 “I think the future for our industry is quite strong; metals prices are quite high and as an industry you’re going to increasing be developing resources in less developed countries. From a CSR perspective, in our industry … it’s no longer sufficient to just (work with) the government. You have to have the support of local communities and if you don’t, governments are not going to override them. If one doesn’t have a … focused CSR plan you put at risk your operations and you may sterilize the project,” said Aaron Regent, chief executive officer of Barrick.

 Regent spoke late Tuesday on a panel of five chief executive officers of major and junior mining firms about how they view corporate social responsibility at PDAC2012, the Prospectors & Developers Association of Canada’s annual convention, which ends Wednesday in Toronto.

Corporate social responsibility, often referred to as CSR, is a growing topic in the mining field. The CEOs spoke in the largest session room at the PDAC to a capacity crowd of at least a few hundred people. CSR is an umbrella term that can include social and environmental issues and attention to these components are sometimes called the “triple-bottom line” of people, planet, profits. PDAC itself has a program called E3 Plus that focuses on social, environmental and health/safety issues in mining.

Don Bubar, president and CEO of Avalon Rare Metals, a junior miner, admitted that community engagement can be expensive to do. Avalon works with First Nations groups in Canada, he said. It can be expensive to do this work because of high expectations by local communities. “It can be difficult to manage these expectations,” he said.

From the view of a junior miner, it can be costly to produce sustainability reports. “It can be an enormous undertaking for junior miners to do,” he said.

Yet it’s critical to earn the social license, he said. When Avalon sought to mine in the Northwest Territories, he said before they even started to do on-the-ground mining work they sought to reach out to the community. Having a strategy on how to work with the communities was important.

While having a strategy is critical, it’s also important to be flexible as people don’t want to feel as they are being dictated to, the CEOs said.

Building on the social license idea, Don Lindsay, president and CEO of Teck Resources said firms have “good stories” to promote, but that companies need to realize how good reputations can be harmed by a single individual with a social media account. “That level of awareness is a whole different level,” he said.

For the rest of this column, please go to the Kitco News website: http://www.kitco.com/reports/Kitco_News_Extensive_Coverage_DeC_CSR.html