Based on the report Our Common Future (Brundtland report, 1987), in which it is stated that sustainable development has to consider economic development, social development and environmental development without affecting the current and future generations´ potential to satisfy their needs and their integral human development, multiple events and summits have been held at the global level to achieve these goals, including the Summit on Sustainable Development Goals (2015), which approved the 2030 Agenda on Sustainable Development.
Sustainability in the United Kingdom
In this context, Kate Harrisson, UK Ambassador to Peru, mentions (Institute of Mining Engineers of Peru, IIMP, february, 2021) that “Sustainability in the UK is understood as the key to achieve long-term competitiveness, which in turn leads to prosperity and allows stakeholders to win”. Sustainability also includes –in addition to the economic, social and environmental issues- science and innovation. In this sense, it seeks to invest in science and innovation to obtain a more sustainable economy that includes traditional industries such as mining.
Sustainability has been promoted in the United Kingdom through three main areas: first, the climate change act, approved in 2008, to reduce greenhouse gas emissions, amending this law in 2019 to establish the binding commitment of zero carbon emissions at the country level by 2050, sending clear signals to business on how they can change their practices; second, the adoption of an industrial strategy in 2019 to boost the country’s economy and productivity; finally, the drive for the UK’s transition to renewable energy. Currently, one third of energy is generated by renewable energies; and half of these is wind power. This is very important since renewable energies are environmentally cleaner, and they are also cheaper.
In addiion, the United Kingdom, this year, is leading COP 26 with five topics: renewable energy; clean transport where the goal is to reach zero emissions for land transport by 2040; adaptation and resilience to climate change; oceans and terrestrial ecosystems´ protection; and green climate finance together with international financial institutions to align portfolios and support green cooperation in developing countries. As a result of the competitive sustainability policy in the United Kingdom since 1990, that is, since the last 30 years, GDP has grown 75% and emissions have been reduced by 43%.
Mining potential in Peru
The contribution of mining to the country in the period 2011-2020, that is, in the last 10 years, has been 8.7% to GDP, 9.4% of tax revenues, 59.3% of exports and 4.3% of the formal employment. Likewise, Peru has the potential and resources to be a leader in the trend of environment protection by climate change where the world is heading; In a particular way, Peru has potential in copper and lithium, two resources whose future demand will constantly grow globally, accentuated by the growth of some new industries such as electromobility. Peru’s potential is accentuated, if one considers that formal mining at a global level is transforming into a clean industry.
On the other hand, Peru is an attractive place for investments, so in 2021, there are 60 mining projects under exploration with investments for 506 million dollars from 9 countries, the main ones are Peru, 30.0%; Canada, 26.2%; Brazil, 12.6%; Switzerland, 9.3% and the United Kingdom, 6.4%; and there are 46 mining projects under construction with investments for 56,158 million dollars from 11 countries, the main ones are the United Kingdom, 21.5%; China, 18.6%; Canada, 15.3%; USA, 12.8% and Mexico, 11.6%. Regarding the portfolio of projects towards 2025, there are three very important mining projects that have been under construction since previous years: the Quellaveco mining project, the Justa mine and the Toromocho expansion. In addition, the construction of 13 mining projects for a value of 11,753 million dollars is expected. These 13 mining projects could be many more if the mining companies that are evaluating their projects take them to production during the next five years, especially if there is good management of social and environmental issues (Jaime Gálvez, Minister of Energy and Mines, IIMP, February, 2021).
Collaboration in mining sustainability between the United Kingdom and Peru
The United Kingdom’s proposal for Peru is to strengthen a strategic alliance based on the principles of sustainability, which allow it to acquire long-term competitiveness. An example of this proposal is the program of good practices in sustainability showed in the Quellaveco mining project, located in the Moquegua region, of the British mining company Angloamerican. The company’s vision is to reimagine mining to improve people’s lives; and from the highest level the company is committed to this objective. This in turn is reflected in the increased emphasis on community relations, the sustainable traceability of the project and the drastic reduction of the environmental impact so that the company can be carbon neutral in its operations globally in 2040 (Kate Harrisson, ambassador of the United Kingdom in Peru, IIMP, February, 2021). In this regard, Quellaveco has established the Moquegua Collaborative Development Platform and is working with the Smart Mining model in order to become a carbon neutral mining project.
Challenges in mining sustainability in Peru
The energy mining sector in the country has made progress in incorporating the concept of sustainability through efforts such as Rimay’s “Vision of Mining in Peru to 2030” (2019) and “The Final Report of the Commission for Sustainable Mining Development” (2020), which has helped define a sustainable mining development framework for the country, the current challenge is how to implement these principles and proposals.
In fact, most of the time the mining companies reach territories that are not very organized and planned from the national, regional and local government; Territories in which there are many deficiencies since they are generally remote areas in which the state has little presence and has arrived with little quality of investment, so that the populations have high expectations of closing social gaps and social, economic and environmental development; So the challenges are to have clear and steady government policies; carry out participatory planning through dialogue, from the initial investments of mining projects, with companies, the state and communities; and, create and manage shared value in territories with mining influence; This is even more important, considering that one of the limitations of mining is the limited capacity to generate local employment and local production chains.
Another challenge for mining sector and the state is to have an effective strategic alliance for territorial development on issues such as collaboration between the mining sector and the agricultural sector; It is important that both sectors are seen as collaborators, for example, in the management of water resources and not as competitors, building virtuous circles in the administration of water for both agriculture and mining (Gabriel Quijandría, Minister of the Environment, IIMP, February, 2021).
Mining sustainability policies and creating shared value
Rimay’s Vision of Mining in Peru to 2030 is a good starting point for the construction of policies that will be sustained in the medium and long term. This would allow the state to obtain social legitimacy to adopt clear and steady mining competitive sustainability policies, which are key to decision-making by companies and investors in mining projects. Furthermore, it is important that the government can collaborate closely with companies and communities to advance and achieve the plans and projects established for creation of shared value in territories with mining influence; and for the drastic reduction of social conflict between companies, communities and the government.
Finally, it is worth asking what are the priority policies that the state should drive to promote mining competitive sustainability? What territories or regions can be pilots for sustainable mining development with creating shared value? What sustainable development goals can be emphasized as partners of sustainable mining?
Econ. MSc. Oscar Mendoza Gallo
Executive Director
Sustainability & Shared Value
omendozagallo@sostenibilidadvc.net
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