Miners have a chance to shine through investment in smart water management
Written by Andrew Watson, mining commercial director, and Resa Furey, principal market analyst
The traditional dynamic between mining companies and communities is changing. With the resolution passed by the UN General Assembly and UN Human Rights Council that declares access to clean water a basic human right, and the resulting broader appreciation of water as a vital resource, mining companies have changed their approach to communities. Water remains essential for mining and the smart management of water resources is key to successfully traversing the socio-regulatory environment and staying in business.
Miners are often the first to enter areas where development is lacking, so communities look to them to build or improve infrastructure such as dams, potable water networks and wastewater treatment plants. Once built, ownership and responsibility for operating these types of facilities are increasingly shared with communities. With the immediate benefit of improved water supply in an arid climate or better treatment of municipal waste, communities are seeing improvements in their quality of life thanks to mining.
Mines have a finite life, so some miners specify that infrastructure improvements revert to the host government or municipality once the mine ceases to operate. Such investments can then be a win for the community – both now and in the long run – when they assume responsibility for maintenance and operation.
The International Council on Mining and Metals’ (ICMM) water stewardship framework captures the essence of this need, providing guidance to mines as they take a broader, basin-wide view of water as a resource. Suggested measures include engaging other water users and safeguarding water assets. Miners are also investing in education and basic municipal infrastructure aiming to permanently improve the quality of life of the communities in which they operate. That education is aimed at staff who are charged with conservation and reuse, and at the communities who might make better use of the water they already have.
At the same time, responsible mining companies are seeking a more collaborative model to replace the paternalistic measures of the past. By training local communities in the operation and maintenance of shared infrastructure, they aim to eventually close the mine without compromising the sustainability of the surrounding community.
Such jointly owned and operated development projects pave the way for other mutually advantageous partnerships between communities and mining companies that may outlive the mine.
Working together, the mine and the community can mine the mineral resource, preserve water as a scarce resource, avoid unnecessary environmental damage and improve access to reliable water and sanitation for all. In such cases mining serves as the economic engine while operating, and also provides the initial impetus to sustained socio-economic development.
Investing in infrastructure beyond the minimum needed to operate the mine does add to a project’s cost. However, the return on investment can be substantial, including better relationships with stakeholders and acceptance of mining as an activity that benefits the community.
What is termed a social licence to operate is founded on mutual respect and trust. Ultimately, these collaborative, mutually beneficial arrangements can result in a mine that takes less time, effort and expense to develop and operate.
Smart water management
Attention to water as a basic human right is an opportunity for the industry to shine. Take a look at some examples of mines working with communities to share water and the cost of building and operating the infrastructure needed to deliver it to the communities where it is needed.
The city of eMalahleni in the coalfields of South Africa is struggling to meet the water demand of a rapidly growing population.
Two mining companies – Anglo American plc and BHP Billiton – built a water reclamation plant to treat contaminated water from various operating and closed mining operations.
The plant now delivers treated water directly into the local municipality’s drinking water system, providing 12% of the city’s water needs. A critical part of the project was engagement with stakeholders in the planning process, including city officials and community representatives, resulting in improved relations with the community.
Areva SA constructed a desalination plant for the Trekkopje uranium mine in Namibia. Opened in 2010, the Erongo desalination plant is the first seawater desalination operation in the country. It supplies both the mine and the region with water.
Excess water is enough to meet nearly half the current water requirements of the Erongo region. The plant is expected to be operational long after the closure of the mine. The regional water authority will take over the plant when the mine is closed.
Freeport-McMoRan Inc’s Cerro Verde mine in Peru delivered the La Tomilla II potable water treatment plant in 2012. The plant will provide access to potable water for 300,000 residents in the neighbouring city of Arequipa. Before the plant opened, some residents had access to potable water for only one or two hours a day. The plant is designed to be expanded to serve as many as a million people.
Stewardship and co-operation
It is clear that water can be key to sustaining the social licence to operate, especially in light of recent resolutions elevating clean drinking water and adequate sanitation onto the international stage.
Global mining companies are on the forefront of this movement, leveraging know-how and willpower to improve the quality of life of the communities we operate in. How we address water is being closely watched. Exemplary performance will lead to substantial gains in the court of public opinion and result in a competitive advantage.
This article was first published in Mining Journal on September 16, 2014.
