Mine the Gap
Synopsis
This paper outlines potential water-related risks facing the mining industry and highlights important gaps in water-related disclosure.
Key Findings
Water risks span the minerals production cycle and occur in diverse operating environments.
Water quality problems are among the most serious environmental impacts associated with mining. Toxic waste and mine effluents can be mobilized by water, resulting in regulatory, legal, and reputational risks for companies.
Work stoppages or mine shut downs can occur if water resources become unavailable. Mining—particularly for precious metals, diamonds, copper, and nickel— requires significant volumes of water.
corporate disclosure often does not provide a comprehensive picture of water risk. Mining companies have long been conscious of water risks, as evidenced by their ongoing efforts to address them and related corporate reporting. Indeed, recent analysis has shown that the mining sector is a leader in terms of water reporting. However, current reporting frameworks do not guide companies to disclose the full scope of potential water risks.
Water quality data is not sufficiently reported. Data on water effluents and waste management practices are either not reported or not detailed enough to understand risk. The impact of mining activities on other water users is also rarely reported.
Water consumption data lacks context. All water is local, thus water usage data is only relevant when placed in the context of local water availability. Competing demands from communities, agriculture, and other industrial users must be factored into assessments of local water availability.
Water reporting is not consistent. Most Asian mining companies report little or no water-related information, even though Chinese and Indian companies account for an increasingly significant share of mining equities and may face serious water constraints. Companies that do report water-related metrics use different approaches to calculating and reporting data, making it difficult to compare performance across companies.
The financial community does not currently have adequate information about the water risks facing mining companies. This paper aims to address this problem by explaining how water issues and trends may create potentially costly water-related risk for companies and by providing tools, questions, and information to help the financial community better evaluate water risks in the mining sector.
Executive Summary
Water issues are becoming a considerable factor affecting growth and profitability of companies in many regions of the world. This paper outlines potential water-related risks facing the mining industry and highlights important gaps in water-related disclosure. The purpose is to provide information, questions, and tools to help the financial community better evaluate water-related risk facing mining companies.
This research focuses on global hardrock minerals operations and does not cover industrial or fuel minerals.
Funding for this research was provided by APG Group.