Although mining’s record on social license to operate is often seen as poor, sustainability expert Luke Danielson is confident mining can “lead the way in pioneering new and more effective social relationships”.
RENO (MINEWEB) – “A large and growing number of project failures are a direct result of the inability to deal successfully with the combination of environment, community and social” concerns, said former Mining, Minerals and Sustainable Development project administrator, Luke Danielson.
In a speech to the 2014 Mining and Land Resource Institute in Reno, Nevada, attorney Danielson observed, “(Mining) Project failure and conflict resolution resulting from lack of social license is extraordinary expensive.”
“Lengthy conflicts are all too frequent and debilitating” for companies, governments, communities, shareholders and other stakeholders, he said. Danielson, now the president and co-founder of the Sustainable Development Strategies Group highlighted several major mining projects which have had difficulty with issues stemming from social license to operate.
For instance, Freeport-McMoRan Copper & Gold’s Grasberg project in Indonesia has experienced 51 incidents since July 2009, which resulted in 17 fatalities and 59 injuries, Danielson noted. He estimated that the company has incurred $352.3 million in direct security costs from 2001-2012.
Plans by Rosemont to build North America’s largest new copper mine were dealt a major blow in November when congressional supporters of the project canceled their vote after Native American tribes through the United States lobbied against the Arizona mining project.
The difficulties of securing a social license to operate also proved a headache for Pebble Project partner Anglo American, which eventually wrote off $300 million on the project, he observed.
The stalled Newmont Conga Project may be headed for the same fate of the Cerro Quilish project, which was suspended in 2004, Danielson suggested.
Vedanta’s battles with indigenous tribes resulted in the suspension of its Orissa bauxite mining project in India after the company had invested $800 million in it, Danielson observed.
Among the other stalled projects highlighted by Danielson are the Lucky Jack Molybdenum project in Colorado, Ascendant Copper’s Junin project in Ecuador, along with Glencore-Xstrata’s intent to sell its ownership in the controversial Tampakan copper-gold mine in the Philippines.
Meanwhile, as global populations grow, so does the demand for minerals to support their economic development, Danielson noted. Ironically, securing a social license to operate has become even more challenging for mining companies because it is becoming “harder and harder to find places to mine that don’t have people living in them.”
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