The Most Valuable Commodity is Trust: ICMM to BMO Global Metals, Mining & Critical Minerals Conference

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March 06, 2023 Global Metals & Mining Sustainable Finance Conferences

At a time when the global mining industry is looking to meet growing demand, the first keynote speaker at BMO’s 32nd annual Global Metals, Mining & Critical Minerals Conference argued that the most valuable commodity today is trust, rather than something that can be pulled out of the ground.

While Rohitesh Dhawan, CEO of ICMM, a global organization for sustainable development, is optimistic about the future of the global mining sector, he noted more work needs to be done to regain the trust of investors, government and communities. “Trust in our industry is at an all-time low,” he said. GlobeScan, a global public relations and polling company, found the mining industry ranks below oil and gas at the bottom of the social responsibility scale. Dhawan notes that this is happening at a time when the world is starting to understand how important metals and minerals are to the energy transition and aspects of sustainable development.

He said the impact of this trust deficit is being felt across the industry, from undervaluation and the underwriting process to company-community issues that can stall projects. There are also signs it could impact recruitment of the talent needed to help make the sector more sustainable, pointing to one university^[1] in the United Kingdom that went as far as prohibiting mining companies from recruiting efforts on campus.

The good news, said Dhawan, is that there is a way to fix it. “Trust can be built,” he said, in part through collaborative action. For a model of how the industry can move forward, he pointed to a new global industry standard on tailings management developed in partnership between ICMM, the UN Environmental Program (UNEP) and the UN Principles for Responsible Investment (PRI).

While it’s a technically sound and excellent standard, it wouldn’t be nearly as trusted if it didn’t also have the immense contribution from UNEP and PRI, Dhawan said. “Co-creation will have to be the way we work if we are to build trust in the future.”

Dhawan argued that trust is a supply-side issue, which can’t be built by convincing people that the products we produce are necessary for their lives. “Society’s relationship with business has shifted,” he explained. “I want to recognize that the expectation that people have of companies has moved on from a world in which society asked, ‘tell me what you’re doing’ to ‘show me what you’re doing’ to a world that increasingly wants to be asked to be involved in what you’re doing.”

As part of this change, companies have to be willing to collaborate with non-governmental organizations and, at times, even competitors. The best example of this is the effort by the industry to find ways to reduce the scope 1 greenhouse gas emissions from the diesel used in mining equipment.

While few felt there was an easy solution to this challenge, with some saying the technology wouldn’t be viable until 2040, a group of 26 companies and 19 OEMs came together in 2018 to accelerate the development of zero-emission vehicles. Thanks to that collaboration, these vehicles are now expected to be available globally at scale by 2027. “Building trust really does represent a case of a rising tide raises all boats; it truly wouldn’t be a losing strategy,” Dhawan assured an audience with some of the world’s most influential mining industry executives, investors and analysts.

“If we’ve come this far with our trust tank essentially running on empty, just imagine how far and how fast our industry can go,” he said.

_{[1] The Guardian: Fossil fuel recruiters banned from UK university careers service.}