mining - sustainability-sustainable development

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Mining & Sustainability: The Three Circles ofSustainable Development

John Trudinger & Dr. Karlheinz Spitz

Environmental Consultants

Mining and the Environment

Introduction

Sustainability is arguably the most widely used

environmental ‘buzzword’ of the past decade. It has been

commonly used and misused to denote a variety of

concepts. However, despite some confusion in its

meaning, its overall premise has been embraced by

regulators and by many industries, including mining.

Opponents of mining commonly claim that it is not a

sustainable activity. This might seem strange for an

activity that has persisted since the Stone Age. Two

arguments are used against mining being sustainable.

Firstly, the fact that the minerals themselves are non-renewable suggests that, eventually, mineral stocks will

be exhausted. There is abundant evidence to indicate

that this situation will never arise. The second argument

is that mining makes irreversible changes to the physical,

ecological and social environment, which can not be

sustained. However, the same argument could equally be

applied to most of man’s other activities and indeed, to

many natural events. The key here is that the benefits of

mining (or other activity) should outweigh any negative

impacts.

The concept of sustainability derives from the idea of

sustainable development as popularized by the World

Commission on Environment and Development in

1987.This commission was chaired by Norwegian Prime

Minister Gro Harlem Brundtland, and is widely known as

the Brundtland Commission. In the words of the

Brundtland Report (WCED 1987), sustainable

development means ‘meeting the needs of the present

without compromising the ability of future generations to

meet their own needs’. It is in the context of this definition

that the sustainability of mining is assessed in this paper.

Clearly, the concept of sustainability will vary depending

on what is being sustained. Sustainable agriculture, for

example, refers to agricultural systems that can be

continued indefinitely without system failure.

The Three Circles of Sustainable Development

A widely held view of sustainable development is that it

refers at once to economic, social and ecological needs

(Figure 1). According to this view (Spitz and Trudinger

2008), there must be no single focus (or object) of

sustainability, but instead all economic, social and

ecological systems must be simultaneously sustainable.

Satisfying any one of these three sustainability circles

without also satisfying the others is deemed insufficient.

Each of the three circles is independently crucial, but

they are interconnected. There is, therefore, a risk of

unwittingly causing (or worsening) problems in one

system while attempting to correct problems in another.

The only sure way to avoid this is to integrate decisions

such that effects in all three systems are considered

before action is taken (Robinson and Tinker 1998).

Figure 1. The Three Circles of Sustainable Development (SD)

Economic Sustainability

The economic circle of sustainability is founded on the

concept of maximizing the flow of income from a stock of

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capital while maintaining the stock yielding this income.

The concept encompasses traditional theory on

economic growth, that is, determining optimal economic

growth with a given capital. The premise is that future

generations can only be better off if they have more

capital per capita than we have today. It is immediately

obvious that population growth is inimical to sustainable

development since it 'dissipates' the capital stock.

Technological change, on the other hand, enables a

given capital stock to generate more wellbeing per unit of

the stock. An easy way to think of it, then, is to say that

future generations will be no worse off if capital stocks

are 'constant' and for the rate of technological change to

just offset the rate of population growth. If technologicalprogress is faster than population change, then future

generations could still be as well off as we are today with

a lower capital stock, and so on.

Capital, as is now well known, goes well beyond the

common idea of financial capital and has five main forms

(MSSD 2006):

1. natural (or environmental) capital, which

provides a continuing income of ecosystem

benefits, such as biological diversity, mineral

resources, forests, wetlands, and clean air and

water;

2. built (or productive) capital, such as machinery,

buildings, and infrastructure (roads, housing,

health facilities, energy supply, water supply,

waste management, etc);

3. human capital, in the form of knowledge, skills,

health, cultural endowment, and economic

livelihood (small enterprise development,

literacy, health care, inoculation programs, etc.);

4. social capital, the institutions and structures that

allow individuals and groups to develop

collaboratively (training, regional planning,

decision sharing culture, etc.); and

5. financial capital, the value of which is simply

representative of the other forms of capital.

This broadening of the concept of capital is critical to an

understanding of sustainable development. It is now easy

to see that the total capital stock could be rising while any

one form of capital is declining. The idea that forms of

capital substitute for each other is embodied in the notion

of weak sustainability. If, on the other hand, forms of

capital are not substitutable then the requirement that the

total stock be constant (rising) has to be supplemented

by the requirement than the relevant specific capital stock

should also be non-declining. In the literature, this has

been termed strong sustainability.

Linkages with social development centre on equity

between different societies, and between the present and

future generations. Economic efficiency and optimal useof scarce resources are also underlying principles, since

the concept of sustainability is based on the idea that

natural resources are somehow scarce, which means

that any use today may preclude a use tomorrow and

vice versa, that use tomorrow may require a restriction of

the use today. Difficulties arise with economic

sustainability in terms of identifying the types of capital to

be maintained, and substitutability. Linkages with

environmental development focus on valuation of natural

resource capital and the degree to which pricing of the

resource accounts for scarcity and the full environmental

and social costs.

Social Sustainability

The social circle of sustainability addresses issues such

as poverty, health, education, local empowerment and

maintaining culture and heritage. Although social norms

change over time, sustaining social and cultural systems

is important. Social sustainability has obvious linkages

with economic development in terms of addressing

poverty and local input into economic decision-making.

Linkages with environment development focus on the

allocation and distribution of natural resources to future

generations as well as local empowerment over natural

resource management.

Ecological Sustainability



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The ecological circle of sustainability is concerned with

maintaining the physical/chemical and biological

environment to preserve resilience and the ability of

natural systems to adapt to change, protecting from

degradation the ecological processes, functions and

cycles that are fundamental to life on Earth. An obvious

linkage with economic development is through the supply

of raw materials for production and the use of the

environment as the final waste sink. One linkage with

social sustainability is through the level of local

participation in natural resource management. Closely

related to ecological sustainability is the concept of

carrying capacity, both in terms of human population that

can be supported by Earth and the ability of ourenvironment to assimilate final waste products. All mine

developments intrinsically involve ‘trade-offs’ between

potentially conflicting goals, such as mineral exploitation

and respecting traditional land rights, or economic growth

and environmental conservation. The challenge is to

optimize trade-offs between and across the three

spheres basic to sustainable development - the

ecological sphere, the economic sphere and the social

sphere (Barbier 1987; Holmberg et al. 1991).

Patrick James, CEO of Rio Algom Ltd., was among the

first to urge that mining, like other forms of development,

must contribute not only economic value to stakeholders,

but also environmental and social value. In the June

1999 ‘Mining Engineering’, he also observed that ‘as an

industry, we will gradually find ourselves unable to

operate anywhere if we are incapable or reluctant to

effectively combine economic, environmental and social

goals everywhere we do business’.

In summarizing the major challenges the mining industry

faces, Sir Robert Wilson, executive chairman of Rio

Tinto, wrote in the June 2000 issue of ‘Mining

Engineering’ that mining finds itself in increasing disfavor

in the United States, Canada, Europe and many other

parts of the world. He adds that industry’s traditional

responses — to say that criticisms are ill-founded, to

remind critics that they depend on mineral products, and

to engage in education, advertising and public relations

campaigns — have all been to little or no avail. Mining’s

reputation continues to deteriorate, he concludes. Sir

Robert urges the mining industry to change its dialog with

stakeholders, especially with non-government

organizations, and supports a new global mining initiative

to seek ‘independent analysis of issues that will

determine the future of mining and that these issues are

social and environmental as well as economic’

(www.geotimes.com 2006).

Requirements of Sustainable Mining

At first glance, sustainable mining appears to be a

contradiction in terms, as for all practical considerations,

minerals are not renewable and accordingly all orebodies

are finite and therefore exhaustible. Most mining projectshave operating lives of 5 to 50 years. However, the

history of mining over several millennia indicates that as

orebodies are depleted and projects close, new

orebodies are discovered leading to development of new

projects, so that supply of mineral commodities seldom

lags far behind demand. Accordingly, the industry as a

whole has proved to be quite resilient throughout human

civilization.

Sustainability has different connotations, depending on

whose viewpoint is being considered. To be truly

sustainable, mining needs to meet the disparate needs of

stakeholders including host communities, governments,

company shareholders, and employees as well as the

environment in which it takes place.

Host Communities

From the viewpoint of a community hosting a mining

operation it is important that the mining operation itself is

not perceived to be sustainable in the sense that it will

continue for ver. All mining projects have finite lives.

Communities should be well informed so that their

expectations are realistic. While there are examples of

communities which have been supported by mining

operations for more than 100 years, there are many more

examples where mining has ceased after much shorter

periods. In some cases the associated communities have

declined substantially or disappeared totally, as in the

case of ‘ghost towns’, the remnants of abandoned mining



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communities. This is not to suggest that there is anything

intrinsically wrong with temporary communities. Many

mines are developed in remote, unpopulated areas with

no other potential source of employment and, in such

cases, there is usually no reason for the community to be

sustained, once mining ceases.

The mining industry itself, however, can be considered as

sustainable, as there will always be ores to be mined.

This follows because the elements which combine to

form ores remain at or close to the earth’s surface, even

after they have been used. When the higher grade,

readily accessible ores have been mined, lower grade

and/or less accessible ores will be mined. And, in the

future, particularly if production costs increase, it can beexpected that more and more mineral and metal products

will be produced by recycling.

In many cases, the communities that have developed in

association with mining, have continued long after mining

has finished, albeit on a reduced scale. Examples in

Australia include many of the larger inland cities, such as

Ballarat and Bendigo, which continue to exist and

ultimately to thrive following conclusion of mining. What is

important to a community considering becoming host to a

new mining project, is that the community itself is

sustained during and after mining. This usually means

that the pre-existing livelihoods and economic bases are

maintained and that additional means of income

generation are developed to replace mining, once

operations cease.

Different host communities have different requirements,

expectations and aspirations in relation to new mining

developments. Impoverished communities are likely to

focus on employment opportunities while communities

that already enjoy high standards of living will be most

concerned to ensure that these standards are not

eroded. Typical requirements include:

• Just compensation for landholders affected

directly or indirectly by project development;

• Direct employment opportunities for working age

members of the community;

• Training to equip local people for direct

employment;

• Opportunities for existing local businesses to

supply goods and services to the mining project;

• Continuation of pre-existing land uses and

livelihoods in the areas surrounding the project;

• Preservation of indigenous cultures;

• Protection of community values;

• In the absence of existing local businesses to

service project needs, assistance to establish

such businesses;

• Clear and timely information from the mining

company in relation to direct employment and

business opportunities ;• Clear information from the company on risks

and hazards associated with the project

including use of explosives, traffic and the use,

storage and disposal of hazardous substances;

and associated contingency plans;

• Input to major decisions of significant concern.

Examples include workforce accommodation

options, water supply issues, and siting of

facilities;

• Input to community development planning;

• Development of initiatives to offset negative

effects of reduced employment as the project

closes, and

• Close involvement in formulation and

implementation of closure plans.

Governments

Governments administer and regulate mining activities

through a variety of laws and regulations that differ

significantly from country to country. In some countries

the minerals are owned by that country; elsewhere

minerals may be privately owned. Responsibility for

regulation of mining activities may be at the national

level, at the state or provincial level, or at an even more

local level. Commonly, different aspects of a mining

operation are regulated at different levels of government

and there maybe overlap with more than one level of

government regulating the same aspect. Notwithstanding



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these differences, the government viewpoint in relation to

sustainability of a mining operation generally requires

that the mining proponent should:

• Observe all applicable laws and regulations;

• Adhere strictly to terms and conditions

associated with project approval, including

environmental management and monitoring

programs;

• Implement and maintain community

consultations and community involvement

programs;

• Avoid causing divisions within the local

communities or adding to pre-existing divisions;

• Implement programs to manage public risksassociated with the project including delivery,

usage and storage of hazardous substances,

operation of tailings storage facilities, and the

use of explosives;

• Provide regular reports presenting up-to-date

information about key project issues and

monitoring of environmental parameters;

• Ensure that sufficient funds are accrued or

otherwise arranged so that the project site can

be rehabilitated once mining has ceased.

• Some jurisdictions, particularly for projects in

remote or impoverished areas, also require that

proponents assist government in providing

services such as health and education, and the

upgrading of local infrastructure.

Mining Company

From the viewpoint of a mining company, sustainability

means locating and developing mining projects to provide

returns to shareholders, as well as funding for exploration

to find or acquire replacement projects. Some

companies, such as the Benguet Corporation of the

Philippines, once a major producer of gold, copper and

other minerals, have sustained themselves during

downturns in the industry, by alternative revenue-

generating activities such as real estate development.

Profit is clearly the main requirement for sustainability of

any commercial enterprise. Most companies aspire to be

sustainable; however, many do not achieve this goal,

whether due to poor management, lack of profitability,

take-over, or inability to find replacement projects. The

main disincentive for a company is a lack of security-of-

tenure over its mineral resources, and it is unlikely that

any Board of Directors would approve commitment of

capital for a project that lacked such security.

Commonly during the planning stages of a project and

continuing into the operating stage, a mining company is

under pressure to contribute funds or efforts to a wide

range of programs. The company may be reluctant or

unable to make significant contributions until operations

are underway and a positive cash-flow is established. As

negotiations take place during the environmentalpermitting process, the company may commit to future

contributions and it is important that these commitments

be sufficiently conservative that they can be afforded

under all reasonable financial scenarios.

Another important aspect of sustainability from the

company’s perspective is to establish and maintain

community support. Each project depends on community

support at least as much as the community depends on

the project. It requires time and patience for a project

proponent to establish trust, particularly in areas without

a prior history of mining or with previous unfavorable

experiences. It also requires a consistency of approach,

the honoring of commitments, and a willingness to seek

out, listen to and respond to the views of all stakeholders.

Ideally, the mining project becomes an integral part of the

community, something of which the community is proud.

Employees

From the viewpoint of employees, the over-riding

requirements are:

• Security, meaning a reasonable expectation of

continuity of employment for a defined period;

• Adequate remuneration, commensurate with the

circumstances;

• Training as necessary to carry out job

requirements and to provide opportunities for

advancement; and

• A safe working environment.



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• In some circumstances, employees will have

additional requirements relating to family

accommodation, health services and religious

observances.

Shareholders

People and their institutions invest in mining companies

to make money. The expected return on investment is

based on perceived risk; the highest returns are expected

from projects with the highest risks. Risks have

traditionally included sovereign risk, political risks, risks

associated with delivering a project on-time and on-

budget, and risks from geohazards such as earthquakes,

floods and landslides. To these must now be addedsocial risks which can range from chronic local opposition

causing schedule interruptions, to violent uprisings or in

the extreme case civil war, as occurred in Bougainville.

Financial Institutions

Until the advent of the Equator Principles, the main

requirements of banks providing finance for mining

projects were timely repayment of borrowed funds and,

for their own sustainability, opportunities for further

lending in the future. Now, most lending institutions also

require that the project adheres to the Equator Principles.

The Environment

In a broad sense, “the environment” can be considered

as an important stakeholder with the potential to benefit

from or be damaged by mining and associated activities.

From the viewpoint of the environment, sustainability

means that environmental values should not be lost or

permanently degraded.

Clearly, environmental sustainability is a complex issue,

involving much more than the rehabilitation of surface

disturbance. Many aspects of the environment are

involved and need to be considered in evaluating

sustainability.

These include:

• Protection of water resources – yields and

quality;

• Maintenance of air quality;

• Continuity of ecological functions; and

• Maintenance of bio-diversity.

The measures used for sustaining or even enhancing

these environmental components are the ‘building blocks’

of environmental management, about which much

information exists (Spitz and Trudinger 2008).

Much of the focus of environmental management aims to

protect valuable environmental attributes and to

rehabilitate damage caused as a direct or indirect result

of development. Such rehabilitation usually aims to re-

establish the landscape and biota that were present priorto mining. While some mining operations can be totally

rehabilitated, there are others where part of the project

“footprint”, usually the “final void”, is not amenable to

rehabilitation. Where significant environmental attributes

are involved, the permanent damage sustained in this

“residual footprint” may be compensated for by means of

“environmental offsets”. A typical example of an

environmental offset in a forested ecosystem is the re-

establishment of forest (by the mining company) on land

degraded by others, over an area exceeding that

occupied by the final void, thereby providing a net benefit

to the environment.

Biodiversity is one significant environmental attribute that

frequently features as an issue for mining developments.

While biodiversity has several components, it is species

diversity that draws the most attention and, in particular

the potential that one or more mining projects could

contribute to the extinction of one or more plant or animal

species. Interestingly, despite mankind having been

implicated in the extinction of hundreds of species of

biota, there is no documented evidence that any species

have disappeared due to mining. However, as mines are

becoming larger and are being developed in new

environments, the possibility of loss of biodiversity due to

mining must be addressed. Again however, there is often

the potential that mining, through the research that it

sponsors and through environmental offsets, can actually

improve habitats used by threatened or endangered



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species, thereby lessening their vulnerability to extinction.

A good example is bauxite mining in the Darling Range of

Western Australia where the Jarrah Forest ecosystem

and many of its endemic species were being threatened

by Jarrah Dieback Disease well before mining

commenced. Research, sponsored in part by mining

companies including Alcoa, has led to improved forest

management practices, and the extensive rehabilitated

mined areas now represent some of the healthiest and

most diverse areas of upland forest.

Criteria for sustainability from the viewpoint of the

environment could include:

• Conservation and/or re-establishment of

representative vegetation communities andhabitat types, particularly those associated with

threatened or endangered species;

• No permanent net loss of valuable

environmental attributes;

• Maintenance of hydrologic functions necessary

for maintenance of ecosystems;

• Avoidance of pollution that could exceed the

assimilative capacity of the receiving

environment.

Conclusions

While there may be circumstances where individual

projects can not meet the objectives of sustainability, the

state-of-the-art for environmental management and mine

closure is now such that sustainability has become

achievable in most situations.

For a mining project to be sustainable means that it

meets the requirements of its major stakeholders

including shareholders, employees, governments, local

communities, financial institutions and the environment.

The best outcomes occur when the needs and

aspirations of these stakeholders are aligned. Then, all

are working for the same objectives and all share in the

benefits. However, if one of these stakeholder groups is

too greedy and succeeds in obtaining a disproportionate

share of benefits, then the sustainability of the entire

project will be jeopardised.

References

Barbier EB (1987) The Concept of Sustainable Economic

Development, Environmental. Conservation, Vol. 14, No. 2; pp.

101–110.

Holmberg J, Bass S and L Timberlake (1991) Defending the

Future: A Guide to Sustainable Development, IIED/Earthscan,

London.

MMSD (2002) Breaking New Ground; Mining, Minerals and

Sustainable Development (MMSD) Project; published by

Earthscan for IIED and WBCSD.

Robinson J and J Tinker (1998) Reconciling Ecological,

Economic, and Social Imperatives; In Schnurr J and S Holtz

eds., The Cornerstone of Development: Integrating

Environmental, Social and Economic Policies, Ottawa:

International Development Research Centre, pp. 9–44.

Spitz K. and J. Trudinger (2008) Mining and the Environment –

From Ore to Metal, CRC Press.

WCED (1987) Our Common Future, World Commission on

Environment and Development (also referred to as the

Brundtland Report).

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