Strategic CSR - Mining

I have often thought how strange it is that we occasionally get angry at consumer-facing businesses and hold them to account (inconsistently) for their supply chains, but we are less effective at targeting those B2B firms that make up those supply chains (see also Strategic CSR – Distributors). This is particularly important in extractive industries with firms that, not only can cause harm when their products are consumed (e.g., burning coal), but can also cause harm in the way that they extract those resources. The article in the url below presents an interesting case where a local community tried to do it properly – targeting the mining company (Anglo American) that was extracting copper from their land:

"Deep in a valley, at 3,500 metres in the Andes near Moquegua in southern Peru, giant terraces are being carved from the mountainside. Diggers load loose rock into 320-tonne driverless trucks which carry it to a conveyor belt. They pass by a dam built to hold back the Asana river in case it overflows the tunnel which carries it for almost eight kilometres beneath Quellaveco. This is a new $5.5bn copper mine operated by Anglo American, a London-listed multinational mining company, and part-owned by Mitsubishi of Japan."

And, the attention seems to have generated a response from the company. There is some indication that this story might not be your usual extraction industry disaster:

 

"The diggers and trucks are 'pre-mining,' stripping away surface rock to expose the copper ore below. Nearby, workers are putting the finishing touches to the plant which will extract the metal from its ore. In the next few weeks mining proper will start. It has taken more than a decade to get to this stage. With blanket Wi-Fi as well as its driverless trucks, Quellaveco is perhaps the most technologically advanced mine in Latin America. It is also a test of whether big mining has a future in a country and region in which social conflict threatens to banish extractive industries."

The article contains many examples that suggest this is a genuine attempt by the mining company to retain the support of local communities. The company had to redirect a river so that the water was not polluted, while also securing supply for local farmers:

"Other commitments came from 18 months of talks between the company, local officials and community groups. … Anglo agreed to pay for a $1bn development fund, to be spent over the 30-year life of the mine, and to fund small community projects. Perhaps its most important commitment was to hire local people, many of whom it has trained, and to give opportunities to local suppliers. Of the mine's permanent workforce of 2,500, the company says 71% are from Moquegua and 28% are women (compared with an average of 10% at mines in Peru)."

As the company transitions from construction to operation (which requires far fewer workers), the key is to retain local support. The company seems genuine in its commitment to doing so – the rationalization that is offered is consistent with a strategic CSR approach to business:

"'It's very different from ten or 30 years ago, it's not just about a mining business where you try to be efficient,' says Adolfo Heeren, Anglo American's boss in Peru. 'You have to renew your social license every day.' That costs more upfront. But if it allows continuous operations, it saves money in the long run."

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

The wealth of the Andes

May 28, 2022

The Economist

Late Edition – Final

27

https://www.economist.com/the-americas/2022/05/26/a-test-of-whether-big-mining-is-socially-sustainable