Mining Companies adopt Water Stewardship Standards

15 February 2017 Mervyn Piesse, Research Manager, Global Food and Water Crises Research Programme

Background

Water security has emerged as a major concern for the world’s mining companies. Mining executives increasingly realise that investors are also concerned about this issue. In a speech he gave at the annual Mining Indaba conference, in Cape Town, South Africa, Nicholas Holland, CEO of the large gold mining company Gold Fields, said that ‘Investors say to us: “don’t talk to us about returns”; they want to know how we’re managing water’. Mining requires access to water at almost every stage of production and consumes large volumes of the resource. For instance, 1,600 litres of water is used to produce the 19kgs of copper found in a medium-sized family car. Mining is an integral part of the modern world, and food and water security would be poorer without it, but as many of the world’s mines are located in increasingly water-stressed regions, the industry will need to become a more efficient water user.

Comment

About 70 per cent of the mining operations of the “Big Six” (BHP Billiton, Rio Tinto, Anglo American, Vale S.A., Xstrata and Glencore International) are located in countries where water stress is considered a risk. In January 2017, the International Council on Mining and Metals (ICMM) released a water stewardship position statement. The ICMM includes 23 of the world’s largest mining companies, such as BHP Billiton, Rio, Anglo American and Glencore, and its position statements are binding on all members. The water stewardship position statement requires companies to adhere to transparent water governance practices, implement effective water management and share sustainable water use methods.

The mining sector consumes considerably less water than other industries, such as agriculture, which is the largest consumer of water in many countries. According to the Food and Agriculture Organization, agriculture accounts for 69 per cent of the world’s water consumption, while industry (which includes mining) accounts for 19 per cent. As agriculture increases the efficiency of its water use, however, the mining industry is likely to be encouraged to do so as well. Furthermore, as competition between economic sectors for water is likely to increase in coming decades, finding ways to reduce water use is vital.

Increasingly tight water supplies in parts of the world have led to mining companies investing in climate-independent sources of water, such as desalination. This is not always a feasible option, however, and alternatives could provide a better solution. Some companies have switched to lower-quality water sources to relieve stress on sources that could be utilised by other sectors. As more than 90 per cent of mine water can be reused after treatment with reverse osmosis and microfiltration, water recycling is another option.

Some of the largest mining companies in the world have already begun to reduce their water consumption. As part of its FutureSmart Mining initiative, Anglo American, a global and diversified mining company, has reduced its water consumption by 65 per cent in recent years, mainly by using recycled water. It aims to reduce its water use by another 15 per cent in coming years. Initiatives that are similar to FutureSmart Mining are likely to become more widespread in the industry as water pressures increase.

Opposition to mining projects has increased in water-stressed parts of the world. While increasing water efficiency can be costly and time-consuming for mining companies, the benefits that come from increased community and investor confidence pay off in the long-term.

Any opinions or views expressed in this paper are those of the individual author, unless stated to be those of Future Directions International.

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