Thematic Results | RMI Report 2020

Results

Lifecycle Management

The Lifecycle Management thematic area focuses on the integration of economic, environmental, social and governance (EESG) issues in business decision-making across all phases of mining operations. Lifecycle Management indicators assess the degree to which companies consider EESG issues from the earliest stage of their involvement in an operation through to sale or closure, and plan for post-closure viability from the beginning in order to best manage the impacts on workers, communities, the environment and economies.

Average of the best scores achieved collectively by all companies for each one of the indicators under the thematic area

Average of the scores achieved by each one of the companies under this thematic area

Commitment (1 indicator)

Action (5 indicators)

Effectiveness (1 indicator)

The 0.00-6.00 scale is the scoring scale used in the assessment.

Summary of results

While many of the companies have formally committed to follow a lifecycle approach, there is less evidence of systems being put in place to implement these commitments. Notably, companies show markedly weaker results on planning to address the impact of closure on workers, compared to their efforts to make provisions for addressing the impact of closure on communities.

One company, Anglo American, shows clearer stronger results in this thematic area, as it demonstrates that it is addressing most of the issues covered in Lifecycle Management in a systematic manner. In addition, other companies including AngloGold Ashanti, Antofagasta, CODELCO, Newmont, Rio Tinto, Teck and Vale account for the strongest results on some specific issues.

While progressive rehabilitation is gradually becoming standard practice among large-scale mining companies, very few of the assessed companies show evidence of tracking and reviewing their performance on this issue. And while social closure planning is another emerging norm, no companies disclose information on their financial surety arrangements to cover the costs related to the socio-economic aspects of closure and post-closure.

C.01 Mine Lifecycle Management

C.01.1

Commitment

The company commits to adopt a lifecycle approach throughout the project development and operational phases of its operations.

Observation

While many companies make passing references to adopting a lifecycle approach (i.e. addressing social and environmental impacts throughout the life of their operations and planning for closure from the earliest stage), less than one-third of companies have put in place formal policies or requirements on this. Other companies’ policies relate to only some of the elements of a lifecycle approach, for example covering environmental but not social issues.

Avg2.2

Min0.0

▼ Max6.0

C.02 Project Approval Process

C.02.1

Action

The company has systems in place to integrate ESG criteria into the stage-gating process in investment decision-making.

Observation

There is little evidence of companies having formal systems in place to ensure the identification and application of ESG issues in their investment decision-making processes. Two companies show that such systems are in place, while a few other companies demonstrate less formal approaches to integrating ESG criteria in investment decision-making. The majority of companies show no evidence of paying attention to ESG issues in their investment decision-making.

Avg0.7

Min0.0

▼ Max4.5

C.03 Mine Closure and Post-Closure Viability

C.03.1

Action

The company has systems in place to ensure its operations manage post-closure transition for affected communities, to seek to ensure continued viability of their livelihoods.

Observation

The majority of companies demonstrate to some degree that their approach to closure planning takes into account the post-closure viability of affected communities. However, only a handful of companies show evidence of having formal systems in place to ensure this happens on a systematic basis. For those companies that show they develop plans to address the post-closure needs of communities, most also include land-use considerations in these plans.

Avg2.1

Min0.0

▼ Max6.0

C.03.2

Action

The company has systems in place to ensure its operations plan for post-closure just transition for workers.

Observation

While many companies mention the need to address the social impacts of closure, this often relates only to impacts on local communities; it is less common to see the impacts on workers explicitly highlighted. Very few companies have formal company-wide systems (e.g. management standards or guidelines) for closure planning that include provisions for the identification and mitigation of impacts on workers.

Avg0.6

Min0.0

▼ Max6.0

C.03.3

Effectiveness

The company tracks, reviews and acts to improve its performance on progressive mine rehabilitation.

Observation

Over one-third of companies show evidence of company-wide tracking of ongoing rehabilitation within the context of a progressive rehabilitation approach. However far fewer companies demonstrate that they are undertaking performance reviews/audits on their progressive rehabilitation activities. A few companies show (limited) evidence of taking action in response to these reviews/audits.

Avg1.3

Min0.0

▼ Max5.0

C.03.4

Action

The company discloses financial surety arrangements for mine closure and post-closure liabilities.

Observation

No company shows any evidence of disclosing its financial surety arrangements for socio-economic liabilities related to mine closure and post-closure.

C.04 Mergers, Acquisitions and Disposals Due Diligence

C.04.1

Action

The company has systems in place to identify and assess potential ESG risks, including human rights risks, associated with mergers, acquisitions and disposals.

Observation

Only a few companies show evidence of having systems in place to ensure their due diligence on mergers, acquisitions and disposals cover salient environmental, social and human rights and governance issues. Other companies show evidence of having a company-wide approach though there is no evidence of systems to formalise these approaches.

Avg0.9

Min0.0

▼ Max6.0