Productivity and water access: The main concerns of mining
Obtaining the social license to operate is a topic that does not appear in the list of issues that generate more interest in the industry.
A number of common challenges between the mining industry operating in Chile and the world revealed the latest study on Risks of Mining Industry 2014-2015 prepared by EY (formerly Ernst & Young).
According to Alicia Dominguez, Partner of Tax Consulting, improved productivity topped the rankings this year, which was expected to happen given the situation of the companies.
Dominguez explains that this is not only a global phenomenon in all regions of the world, but also looks at the producers of all commodities.
The report states that the productivity challenges point to find deep solutions and not changes or cuts of specific costs. “There must be a new way of doing things,” says Dominguez.
Chile is not so distant from events that occur in other countries, including major world powers. For example, the report notes that labor productivity in Australia has dropped by about 50% since 2001 and the coal industry in the United States by 30% between 2009 and 2012.
According to calculations of the Mining Council, based on 100 in 2006, productivity defined as fine copper produced by allocation of mining copper has dropped 31 points to 2013.
Energy and water
For the first time entered into the top ten concerns the access to energy and water. Dominguez explained that this was mainly seen in Chile, but is increasingly common elsewhere.
According to the Expert, the rise of the use of sea water with or without desalting-, involves significant energy expense by having to drive to the mountain resort and has influenced this rise. In addition, the role of Chile, where the topic is important years ago may also have influenced.
“Water scarcity is an issue that requires strategic and practical response of business to develop and implement solutions that benefit all stakeholders. This means assessing the dependence on water and supplies for the future, and develop plans to tackle high prices and possible shortages”, the report says.-
Another issue that remains among the most important is the concern for obtaining what is called social license to operate, which rose against 2013.
According to what the expert from EY explains, it has been proven that social license to operate is not something for once, but requires constant work of enterprises.
“What is different from previous years that has shown that no matter the history of the company or how well it has done before, because it will continue to ‘debt’. Whenever they are in search of licensure is a working day, and if not achieved or if neglected, the costs to the industry can be huge”, she says.
“Studies show that community conflicts over environmental and social concerns can generate up costs $ 20 million per week in lost value for major operational mines. The challenge for operators is to maintain a balance between the demands of the immediate stakeholders and the inherent value of being a reliable operator in terms of the environment and society, with control costs, lost production time, damage to reputation and other impacts on other operations, “the study says.
Source: Diario Financiero
