Adapting to Climate Change: A

Guide for the Mining Industry

Julia Nelson, Manager, Advisory Services
Ryan Schuchard, Manager, Climate and Energy

This guide is part of a BSR This primer on climate change adaptation summarizes how companies in the
industry series. For additional mining industry are reporting on climate change risks and opportunities, and
climate adaptation briefs, please highlights current and emerging best practices and guidance for E&U companies
visit www.bsr.org/adaptation. on how to develop a proactive approach to climate change adaptation.

In this brief, mining refers to companies involved in the extraction of a broad

range of metals and minerals, including precious metals, base metals, industrial
Contents and Methodology
minerals, coal, and uranium.
This brief covers:
Introduction
Reporting on Risks and
Opportunities: A synopsis Due to the wide geographic distribution of mining operations, climate change,
including temperature and precipitation shifts as well as more frequent and
based on reporting of climate
severe extreme weather events, will have complex impacts on the sector.
risk in 2009 by 41 mining
Climactic conditions will affect the stability and effectiveness of infrastructure and
companies to the Carbon equipment, environmental protection and site closure practices, and the
Disclosure Project (CDP). availability of transportation routes. Climate change may also impact the stability
and cost of water and energy supplies.
Current Practices: An outline
of actions related to climate Some examples: Warming temperatures will increase water scarcity in some
change adaptation based on locations, inhibiting water-dependent operations, complicating site rehabilitation
reporting from the CDP, and bringing companies into direct conflict with communities for water resources.
interviews, and other In arctic and subarctic regions, however, warmer temperatures will open new
publications. mineral-rich areas for exploration and will reduce heating costs. The sector’s high
rate of energy consumption and international trade of products will increase
Emerging Practices: mining’s potential for greenhouse gas emission and energy regulation.
Synthesis of company
disclosures, literature, reviews, Mining companies often operate in some of the most politically and socially
and input from climate change challenging parts of the world, where the industry remains an important driver of
professionals through economic growth. Therefore, threats to the sector’s profitability and viability, such
interviews. as climate change, may have significant consequences for development in host
countries. The extent to which mining avoids undermining host communities’
resilience to climate change, and even fortifies that resilience, will directly impact
the industry’s reputation, social license to operate, and access to project
financing.

The mining industry should take a proactive approach to climate adaptation for
the following reasons:

» The supply of critical inputs to mining processes, such as water and

energy, is likely to face greater constraints.
» Employee health and safety will be put at risk by increases in
communicable diseases, exposure to heat-related illnesses and the
likelihood of accidents related to rising temperatures.
» Obtaining and maintaining a social license to operate will become more
difficult in communities in which climate change exacerbates existing

BSR | Adapting to Climate Change: A Guide for the Mining Industry 1

Carbon Disclosure Project vulnerabilities and increases direct competition between the company and
Highlight: Of 41 company the community for resources.
disclosures in 2009, 76 Increased physical and nonphysical risks will make project financing more
percent responded that difficult to secure.
climate change represents
physical risk to the This brief examines how climate change is affecting the mining industry and how
company, and 46 percent companies are responding. While mining companies have primarily focused on
responded that physical climate change mitigation, they are starting to take significant steps to adapt to
impacts of climate change the consequences of climate change. Leading companies are developing
present opportunity. sophisticated and integrated climate adaptation strategies that take a
comprehensive approach to helping their organizations manage risk and seize
Source: BSR Analysis opportunity. However, there is still considerable opportunity to embed
management of climate change impacts across the industry, and to collaborate
with stakeholders to do so in an efficient and effective manner.
Of all of the 2009 public
CDP respondents, South
African companies are
Reporting on Risks and Opportunities
particularly active in
The following is an analysis of the 2009 mining company disclosures of climate
discussing climate change
change risks and opportunities to the Carbon Disclosure Project (CDP), one of
risks and opportunities, 1
the largest repositories of company reporting on climate change. Our review of
because many have started company responses revealed common themes in reported risks and
to feel the consequences of opportunities, which are grouped and summarized in the six areas below, and
climate-change-related accompanied by examples of companies that provided those responses. The
legislation, as well as energy companies that publicly reported on climate change risks and opportunities
and water scarcity. included a mix of major multinational and mid-tier mining companies, though it
should be noted that some significant actors have yet to participate publicly.

“Mining (and other) Note that company names provided as examples do not constitute a
companies need to openly comprehensive list of all companies that gave similar responses.
discuss, share information,
and communicate about 1. DISTURBANCE TO MINE INFRASTRUCTURE AND OPERATIONS
adaptation regularly.
Natural disasters, changes to precipitation patterns, and rising sea levels may damage
Companies should share infrastructure, requiring additional measures to ensure its stability. Existing assets may
costs and otherwise support no longer be able to meet original design parameters, and resource scarcity may
climate modeling and other constrain operations or increase costs.
scientific and technical
studies necessary to Impacts Companies
develop adaptation More frequent and intense natural disasters may damage mine, Alumina, Anglo
strategies when they are transportation, and energy infrastructure and equipment, which American, Barrick,
operating in the same in turn will disrupt construction and operations. Heavy rain and China Steel, Kumba
region.” increased erosion may affect slope stability near opencast Iron Ore, Mitsubishi
mines, and rising sea level may make coastal facilities harder Materials Corp., Rio
to access. Tinto Group, Teck,
Vivian MacKnight, Xstrata, Yamana Gold
Sustainable Development Hotter and drier conditions may increase wildfires that threaten Anglo Platinum,
Analyst, Vale S.A. facilities. Cameco, Gold Fields
Flooding from increased rainfall in some areas can interrupt AngloGold Ashanti,
production, and may necessitate additional controls to enhance Exxaro, Harmony
water treatment capacity.
Gold Mining, Limerick
Key: Alumina Refining,
Risks Newmont Mining

Opportunities Reduced amounts of water may be available for mining, Barrick, China Steel,
processing, and refining activities. Costs will increase for pre- Teck, Xstrata, Anglo
use and post-use water treatment. Platinum

1
For more information on the Carbon Disclosure Project, see www.cdproject.net.

BSR | Adapting to Climate Change: A Guide for the Mining Industry 2

 Rising temperatures will increase energy demand to cool Anglo Platinum,
underground mines and surface facilities. Greater demand and Mitsubishi Materials
Corp., Northam
rising prices (driven by limited supply of natural gas, the
Platinum, Outokumpu,
imposition of carbon taxes, and expensive alternative energy
Mining Simms
sources) will add to costs.
Temperature fluctuations that increase energy demand and Aquarius Platinum,
strain the capacity of transmission and distribution facilities can Barrick, China Steel,
disrupt supply to operations. Energy rationing may lead to
Gold Fields, Harmony
permanent decreases in production, affecting profits and
Gold Mining, Implats,
commodity prices.
Kinross
Warming ambient temperatures in the Arctic and other cold Agnico-Eagle Mines,
Spotlight on Arctic climates will make it easier to operate and reduce heating Cameco, Kinross,
Operations: costs. Teck
For mine operations in the
arctic, such as the diamond 2. CHANGING ACCESS TO SUPPLY CHAINS AND DISTRIBUTION
mines in Canada’s ROUTES
Northwest Territories, the
Increasing temperatures, greater precipitation, shifting storm patterns, and rising sea
seasonal ice road network is
level will enable or inhibit transportation services that supply goods and services, carry
critical for stockpiling
personnel, and move ore to facilities for processing and to ports for export.
materials necessary for
operations. Warming Impacts Companies
temperatures and Natural disasters and heavy rainfall are likely to disrupt land
subsequent thaw of Exxaro, Gold Fields,
transportation routes and degrade roads. Disruption in delivery Goldcorp, Kumba Iron
permafrost threaten the of input materials such as steel, timber, cement, hydrochloric
seasonal availability and Ore, Sesa Goa,
acid, and cyanide, or consumables such as diesel, tires, and
safety of ice roads and the Implats, Xstrata, Vale
reagents, will curtail production or limit its efficiency.
structural integrity of Permafrost thaw on winter ice roads will interfere with Kinross, Rio Tinto
overland roads, bridges, consistent and timely supply of critical materials, potentially Group
pipelines, and airstrips. halting production at sites in the Arctic. The time available for
haulage on ice roads will be shorter.
In 2006, because of Sea-level rise and frequent storms may affect port availability, Anglo American,
permafrost thaw, Diavik interfering with timely transport to market. Demand for rail and Exxaro, Rio Tinto
Diamond Mines had to fly in road networks as alternative transportation mediums will rise, Group, Sterlite Gold,
its fuel supplies rather than increasing costs. Vale
Rising temperatures will keep northern sea channels free of Teck
transport them over the ice
ice, allowing longer and more efficient shipping seasons for
roads, costing the company operations in arctic regions.
an extra US$11.25 million.

3. CHALLENGES TO WORKER HEALTH AND SAFETY CONDITIONS

Natural disasters pose immediate health and safety risks, while warmer temperatures
may affect worker recruitment, retention, safety, and productivity by increasing risks of
accidents, creating or exacerbating food and water shortages, and causing greater
prevalence of disease.
Impacts Companies
Rising temperatures increase the risk of heat-related illnesses Anglo Platinum,
and inhibit decision-making, increasing the likelihood of Exxaro, Gold Fields,
injuries, accidents, and fatalities and decreasing productivity.
Iluka Resources
Underground cooling systems may be inadequate to handle
changes in temperature and availability of water and energy.
Flooding may affect employee safety on-site and on roads. Northam Platinum,
Yamana Gold
Flooding, natural disasters, and drought will undermine food Aquarius Platinum,
security, and rising temperatures will exacerbate water Gold Fields, Northam
shortages, undermining worker health and productivity. Platinum, Vale
Higher temperatures are likely to increase the incidence, AngloGold Ashanti,
prevalence, and geographic reach of tropical diseases such as Cameco, Harmony
malaria, yellow fever, cholera, and schistosomiasis, with
Gold Mining, Implats
consequences for workforce health.

BSR | Adapting to Climate Change: A Guide for the Mining Industry 3

 4. CHALLENGES TO ENVIRONMENTAL MANAGEMENT AND MITIGATION
Changing temperature and rainfall patterns will affect assumptions about closure design
and may increase financial liability and monitoring requirements. Companies may also
be blamed for perceived impacts of subtle and cumulative climactic change.
Impacts Companies
Water scarcity and hotter temperatures will make it more difficult Lonmin, Newmont
to reestablish vegetative cover, and will put stress on other Mining
environmental mitigation measures in some regions.
Risks of heavier rainfall include: tailings dam failure, discharge Gold Fields, Northam
of contaminated water into surrounding areas, accompanying Platinum
remediation costs, increases in environmental liability, impacts
on community health and safety, and significant potential for
reputational damage.
Legacy mine sites rehabilitated under older climate regimes Anglo American,
may require supplemental protection measures to ensure Lonmin, Barrick,
Cameco, Kumba Iron
stability of waste rock and tailings covers. Environmental liability
Ore
costs may increase, and monitoring responsibilities may be
extended to ensure effectiveness of reclamation measures.
Higher evaporation rates could reduce the need for water Cameco
treatment and disposal by reducing volumes and therefore
costs (e.g., for treatment of acid mine drainage).
Elsewhere, increased CO2 and longer growing seasons will Newmont Mining
benefit revegetation efforts during reclamation and after closure.

5. MORE PRESSURE POINTS WITH COMMUNITY RELATIONS

Mining companies often operate in areas with marginal physical environments, high
poverty, and significant social, political, and economic challenges. Already vulnerable
host communities stand to suffer from environmental stressors such as drought, flood,
rising temperatures, and natural disasters. Resulting loss of livelihood and property, plus
increased famine and disease, may worsen social conditions and contribute to civil
unrest and political instability. Companies may face direct risks to operation over
competition for resources such as water or energy and loss of legal license, or indirect
risks such as loss of social license to operate and reputational damage from perceived
human rights violations.
Impacts Companies
There may be increased requests for financial and employee Anglo Platinum,
support in response to natural disasters in host communities. AngloGold Ashanti
Damage to livelihoods and property will elevate the need for
basic services and restoration of economic activity. If these are
also home communities for employee and contractor workforces,
such incidences will directly affect worker health, attendance,
and productivity.
Drought, extreme weather, and flooding may decrease food Anglo American,
security, worsen poverty, induce migration, contribute to civil Barrick, Gold Fields,
unrest, and increase conflict over natural resources. Kumba Iron Ore
Flooding and rising temperature will increase the spread of Anglo Platinum,
tropical diseases that affect community health. Implats
Community water infrastructure and watershed restoration
projects may be required to mitigate reputational risks and to Exxaro
meet needs of all users.
Sea-level rise may force migration of coastal peoples, whose Exxaro, Implats,
movement to new areas may exacerbate social problems and Sterlite Gold
conflicts in host communities.
There may be opportunity for more meaningful engagement with Anglo American,
local communities and other key stakeholders, particularly AngloGold Ashanti
regarding collaboration on land, agriculture, and water
management.

BSR | Adapting to Climate Change: A Guide for the Mining Industry 4

 6. EXPLORATION AND FUTURE GROWTH
Climate change may significantly shape opportunities for growth in the mining industry.
Availability of key inputs such as water and energy will physically and financially
constrain the establishment of new operations or make existing operations
uneconomical. Investors and insurers will take into consideration climate risks and
company performance (both in terms of mitigation and adaptation). On the other hand,
warmer temperatures will open the mineral-rich Arctic to exploration. Demand is likely to
increase for materials used in existing and future low-carbon energy and industrial
technologies, and new business opportunities in technological innovation and energy
generation are emerging.
Impacts Companies
Future exploration may be restricted by expanded protections for Anglo Platinum
biodiversity threatened by climate change and for forested areas
that serve as carbon sinks.
Inadequate energy supply will become a major constraint for Aquarius Platinum
expansion or development of new projects in some locations.
Different regulations to limit greenhouse gas emissions across Limerick Alumina
jurisdictions may drive companies to move operations to less- Refining, Teck
regulated regions.
Investors, lenders, and insurers will pressure companies to Anglo Gold
minimize carbon liabilities and develop adaptation plans, as well Ashanti, Gold
as to incorporate climate change risk into due diligence.
Fields, Harmony
Management of climate impacts will affect share price and
Gold Mining,
access to capital.
Kinross, Northam
Platinum
Climate-related damage may raise premiums or make insurers Exxaro, Rio Tinto
unwilling to provide insurance or re-insurance. Group
Warmer arctic and subarctic temperatures will open areas not Newmont Mining
previously accessible for exploration that are likely to contain a
vast store of mineral wealth.
Demand for other commodities may increase due to new Alumina, Cameco,
applications, particularly related to energy efficiency; and Exxaro, Freeport
McMoRan Copper
emerging technologies such as fuel cells, carbon reduction,
& Gold,
diesel emission control, and water purification.
Independence
Group NL
Rising sea level may require construction of sea walls or other Mitsubishi Materials
retaining structures, stimulating the cement industry. Corp.
Patenting and marketing of highly energy-efficient mining and Rio Tinto Group
processing technologies will lead to new revenue streams.

Current Practices
Mining companies are pursuing a range of adaptive practices to respond to
current and potential disruptions tied to climate change. In some cases, these
practices are intended to protect the value of existing or potential assets. In
others, they are aimed at creating value through technological innovation, new
market opportunities, and collaborative initiatives that address the changing
needs of companies and communities affected by climate change. The following
examples of practices and innovations are drawn primarily from the 2009 CDP
responses, supplemented by company interviews.

VALUE PROTECTION
These practices provide examples of how companies are promoting resilience of
physical assets and improving systems responses to effectively execute existing
plans and expectations and maintain business continuity.

BSR | Adapting to Climate Change: A Guide for the Mining Industry 5

 1 Establishing comprehensive management systems to address climate
adaptation: A few leading companies have taken significant measures to
adapt internal management structures in ways that facilitate proactive,
About Adaptive Practices adaptive, and integrated management of climate change impacts.
Based on identified risks and » Vale has established corporate guidelines for climate change that
opportunities, companies report include commitments related to adaptation, such as changes in facilities
pursuing a range of adaptive management, integration of climate considerations into the company
responses, which are included in strategic plan, and working with legislators to develop policy changes
this section. that support adaptation. The cross-functional New Economy and Climate
Adaptive practices are grouped Change team, with representatives from climate change, energy,
by two types: operations, operational risks, strategic planning, and other internal
departments/groups, meets regularly to address climate change risks
• Value protection: Ensuring and opportunities across the company.
resilience of physical assets and » Gold Fields’ formal climate strategy includes adaptation, mitigation,
planning responses to maintain response/management and reporting elements. Each site must identify
business as usual. climate-related risks and opportunities and develop responses that are
implemented and monitored using existing management systems.
• Value creation: Devising
solutions that contribute to the
2 Regional and site-level scientific modeling to identify and quantify
ability to pursue new revenue-
physical risks and opportunities at the local level: Translation of global
generating opportunities and
help suppliers, stakeholders, and climate models into likely localized impacts is critical to adaptation planning
customers adapt to a changing in an industry whose facilities are spread worldwide.
climate. » Anglo American conducted a group impact assessment project from
2008 to 2009 with Imperial College London to model likely changes in
temperature and rainfall that could pose a hazard to its operations.
Individual predictions for each site helped the company create a risk
inventory for current and future operations, and develop site-level
adaptation strategies to enhance the climate resilience of these
operations and their surrounding regions.
» Exxaro used downscaled general circulation models to assess climate
change impacts for both operations and communities where employees
are located. The study examined both natural climate hazards and
inherent vulnerability of existing infrastructure, population, and
socioeconomic activities.
» Vale commissioned the National Institute for Space Research of Brazil to
assess vulnerability under different climate change scenarios in northern
and southern Brazil and their effects on factors such as water availability
and biodiversity.
» Newmont Mining’s environmental and social responsibility group
worked to identify and assess other risks that do not have immediate
financial risk but harm business in other ways.

3 Modification of risk-identification processes to include climate risks

and opportunities: Leading companies are modifying their risk-identification
and mitigation exercises to incorporate the effects of climate change.
» HudBay Minerals identifies climate change risks as part of its
implementation of environmental management systems and standards
such as ISO 14001 at its operating subsidiaries.
» Norsk Hydro incorporates climate change risks into its standard social
and environmental risk assessment processes.

4 Integrating climate-related risks and mitigation measures into business

decisions throughout the project lifecycle: Companies are examining
broad impacts of climate issues throughout project lifecycles, particularly up-

BSR | Adapting to Climate Change: A Guide for the Mining Industry 6

 front in project design and decision-making, and as an ongoing element of
risk management.
» Anglo American plans to integrate a “climate test” into its capital-
expenditure approval processes.
» Exxaro is integrating technical reviews of energy efficiency, greenhouse
gas emissions, and water requirements into all projects under
development. The company has also established an onshore captive
insurance company to accumulate adequate reserves through approved
alternative risk-transfer technology to provide for future uninsurable risks.
» Gold Fields is requiring all new projects to draw 20 percent of their
energy needs from renewable sources.

5 Ensuring robust engineering design and construction standards for

facilities: Companies are making sure that their assets and infrastructure
can withstand increased frequency and magnitudes of extreme weather
events and flooding in expansions or new sites.
» Kumba Iron Ore is gathering data on the probability, magnitude, and
frequency of extreme weather events at its sites to understand their
cumulative impact on structures.
» Alumina has built its bauxite operations in Brazil to withstand increased
frequency and magnitude of extreme weather.
» Kinross has built redundant water storage facilities to contain process
solutions and capture rainwater for use.
» Norsk Hydro is raising its facilities in Qatar by two meters to withstand
flooding.

6 Reviewing emergency procedures and developing contingency plans:

Companies are considering their planning for natural disasters, floods, fires,
and pandemics in light of the expected increase in frequency and magnitude
under various climate scenarios.
» Teck buys insurance for weather conditions that would impact
operations.
» Cameco has engaged with Saskatchewan Fire Services to conduct an
independent audit of its mitigation controls and response measures for
forest fires. The company has also implemented a pandemic
preparedness procedure as part of its emergency planning.
» Gold Fields participates in local fire protection agency activities for
emergency response to all fires.
» Harmony Gold Mining has introduced a malaria-awareness campaign
to promote early diagnosis.
» Vale has a department that monitors weather that could affect railways
and ports, communicating this information across the company. It is
installing a radar-supported weather monitoring system at its ports to
detect and forecast storm in time to shut down and secure equipment.

7 Designing comprehensive water management measures: Companies are

identifying and developing access to new water sources to ensure sustained
adequate supply, increasing the efficiency of water use through conservation
practices, developing processing technologies that reduce consumption, and
looking for advanced opportunities for reuse and recycling.
» Norsk Hydro has built a desalinization plant for its new facilities in
Qatar.

BSR | Adapting to Climate Change: A Guide for the Mining Industry 7

 » Anglo American is investing in a dam pipeline project funded by
multiple mining companies, electric utilities, and petrochemical
Tapping the International companies to provide water for its operations in South Africa.
Carbon Markets
» Newcrest Mining has prioritized reduction of evaporation losses as a
A number of mining companies
key water management strategy.
have seized the opportunity to
earn certified carbon credits » Exxaro is exploring options such as dry beneficiation processes, water
through the Carbon recovery from slimes dams, and collection and use of storm water.
Development Mechanisms for » Iluka Resources utilizes recycled municipal water at its facilities in
trade on the international South Australia.
market. This mechanism has
created opportunities for the
industry to develop new VALUE CREATION
technologies and products that These practices offer examples of how companies are creating solutions that
support emissions reduction and contribute to the ability to pursue new revenue-generating opportunities and to
create new revenue streams. collaborate with other stakeholders to meet both corporate and community needs
in the context of climate change.
To date, many CDM projects in
the mining industry have 1 Expansion of commodity portfolios: Companies that have traditionally
focused on coal methane specialized in extraction of specific metals or minerals are diversifying their
capture, where methane gas production for greater flexibility in responding to rapid change in the market.
from coal operations is captured
and destroyed through flaring, or » Gold Fields is investigating the feasibility of mining other minerals to
use for energy generation and become less reliant on a single commodity and its associated climate
motive power. change risks.

Project examples: 2 Technical innovation and collaboration to provide integrated solutions

for thriving under a harsher climate: Companies are developing ranges of
» Both Appin and Tower Power solutions to help stakeholders and communities address changing climactic
plants use 2.5 million tons per conditions.
year of coal-mine waste
methane from Endeavor Coal » Gold Fields is testing hard ice and three-chamber pump systems, which
in Australia. This has may offer new solutions for effective cooling in underground facilities.
generated multiple streams of » Anglo American is participating in a water reclamation joint venture with
revenue for BHP Billiton, BHP Billiton in Mpumalanga, South Africa, that provides potable water in
including federal renewable sufficient quantity to meet the needs of both its mines and local
energy certificates and carbon municipalities. The company is exploring similar joint investments with
credits for state and other major mining houses and the national utility, Eskom.
international trading.
» Gold Fields’ Beatrix mine- 3 Investment in renewable energy technologies and alternative fuels:
capture project in South Africa Companies are investing in better ways to manage energy supply, cost, and
generates carbon credits and financial risks due to regulation. They are also taking advantage of new
provides methane for power revenue streams from carbon credits.
generation. » Barrick purchases renewable energy and has built natural gas,
» Lihir Gold’s geothermal power geothermal, solar, and wind facilities at its operations in the Americas.
plant meets 75 percent of the The company is also using biodiesel at its underground operations in
mine’s energy needs. It is the North America and is exploring options for similar fuels in Africa.
first project in Papua New » Rio Tinto Group is investing in the development of carbon capture and
Guinea to be registered for storage technologies.
carbon-credit trading, and
generated US$4.5 million in » Exxaro has decided to move into energy as a business and formed a
2008 through the sale of new business growth division exploring wind, solar, and coal bed
Carbon Emission Reductions methane projects in Africa. The company hopes to generate carbon
on global markets. credits from these ventures under the Clean Development Mechanisms.
» Sesa Goa has developed a clean process for making coke that is
generating revenues through carbon credits and licensing of the
technology.

BSR | Adapting to Climate Change: A Guide for the Mining Industry 8

 » Gold Fields became the world’s first mining company to sell Certified
Emissions Reductions from its methane gas field at the Beatrix mine in
South Africa.
» Vale and Gold Fields have invested in biodiesel and other agricultural
production that could be used as an alternative energy resource.

4 Waste recycling programs: Companies are exploring ways to profit from

emissions and other waste while addressing supply shortfalls.
» Gold Fields built a tire-retread facility at its Tarkwa, Ghana, mine to
address shortages in supply and problematic disposal options. The
extended life of the tires decreases energy and material use by avoiding
purchase of new tires. The company is exploring other options to reuse
waste for stability of supply and energy use.

Recommendations
This paper discusses a range of responses to climate change that are readily
observable to those in the mining industry, and many of them will be familiar to
those who are managing climate change or business risk more generally. Mining
companies need to adapt their corporate strategies, design and engineering
practices, and supply and distribution systems to these physical changes. While
there are clear signs that some companies in the industry are moving quickly to
address climate-related risks and opportunities, there is still considerable need to
improve awareness and take action, particularly at the senior management level.

A recent report by the David Suzuki Foundation on climate adaptation in the

Canadian mining industry noted a gap between the experience of climate change
impacts on the ground and awareness among executives: “It is noteworthy that
senior management were less likely to perceive climate hazards as negatively
2
affecting operations compared to those performing other roles.” This perception
gap is supported by the findings of a KPMG survey of senior executives in the
industry in August 2010. The survey found that about 60 percent of respondents
had implemented structural changes to address climate change, while 57 percent
had not redefined roles and responsibilities to include climate change in job
descriptions and management systems. The major reason for hesitation? Half
had yet to quantify the potential costs of climate change for their businesses.

Furthermore, most climate adaptation initiatives in the mining industry have

focused on physical risks of climate change. Less developed is a detailed
understanding of the site-level social risks and opportunities. Nor have mining
companies yet seized the opportunity presented by climate change to collaborate
with communities, development agencies, NGOs, and governments on
adaptation—and in doing so enhance their social licenses to operate.

For these reasons, BSR recommends that mining companies establish climate
change adaptation strategies that contain the following key components:

1. Work with host communities to develop concrete climate adaptation

plans. Mining can share scientific information for site planning to inform
community preparation, advise on emergency planning practices, and
advocate for climate-resilient economic growth with local authorities and
development agencies.

2
Yupari, Anida, “Climate Change and Policy Law Implications for the Mining Industry.” CEPMLP
Research Network: Working Papers, 2010.

BSR | Adapting to Climate Change: A Guide for the Mining Industry 9

2. Integrate climate-compatible development into initiatives for
sustainable local benefit from project operations. Explore development
projects that make little or no use of scarce natural resources; strengthen
community peace and security programs; build capacity for sound structural
engineering; and develop government planning and emergency response
capabilities.

3. Explore how investments in ecosystem services can improve local

resilience. For example, investment in integrated watershed management
programs, enhancement of local water supplies, and protection of existing
sources can help secure the availability of sufficient clean water to meet
company and community needs, even in light of increasing scarcity and
competition. Through participatory and integrated resource management
practices, companies can engage host communities as partners in resource
management, monitoring, and enhancement.

4. Work with stakeholders to understand their emerging concerns. New

issues are emerging as climate change allows new ecosystems, such as the
Arctic, to be opened for mineral exploration. Stakeholder expectations
regarding corporate climate change mitigation, adaptation, biodiversity, and
indigenous peoples are likely to find new focus in arctic exploration.
Proactive engagement can establish responsible exploration and operational
practices in this sensitive environment.

5. Initiate cross-industry collaboration on regional adaptation strategies.

Explore opportunities to collaborate within geographic regions to share
information and costs for climate modeling, other supporting
scientific/technical activities, best practices, and implementation of large-
scale adaptation strategies. For example, Vale is involved in the “Company
for the Climate” initiative in Brazil, in which private companies meet monthly
to discuss climate information and learn from each others’ efforts to develop
mitigation and adaptation strategies. Opportunities may exist for
complimentary work across industries such as food and agriculture, mining,
energy, and transportation.

Corporate adaptation strategies will vary significantly, given the diversity of

geographies and commodities produced by the industry. No matter where they
are located, however, mining companies can become catalysts for adaptation,
not only within their own operations, but in their host communities and among
regional businesses. Investment in the resilience of such partners is likely to be
as important as ensuring the physical stability and resilience of the corporate
value chain.

For more tools on managing climate change adaptation, visit:

www.bsr.org/adaptation.

BSR | Adapting to Climate Change: A Guide for the Mining Industry 10