(The opinions expressed here are those of the author, a columnist for Reuters.)
By Andy Home
LONDON (Reuters) - "Society expects more of our industry."
That was the stark warning from Jean-Sebastien Jacques, head of one of the world's largest mining companies, Rio Tinto, in a keynote speech at last week's London Metal Exchange Week.
"There is absolutely no doubt in my mind we will face greater regulation and scrutiny," Jacques went on to say.
The scrutiny has already begun.
The next day environmental protesters disrupted the International Mining and Resources Conference in Melbourne, leading to multiple arrests and a draconian threat by Australia's prime minister to ban future anti-mining demonstrations.
Half way around the world, protesters were blocking access roads to SQM's lithium operations high in Chile's Atacama Desert in a rumbling dispute over water rights.
Here writ small is the industrial metals industry's big problem.
The green technology revolution, at the heart of which sits lithium, holds massive promise for the world's miners, but to reap the rewards the entire metals supply chain will have to "green" itself.
An unwelcome reminder of just how massive a challenge that's going to be came in the form of yet another fatal tailings dam collapse, this time at a Russian gold mine.
The death of at least 15 artisanal miners ticked all the wrong boxes on the industry's new target list of environmental responsibility, sustainability and good governance (ESG).
It is, sadly, very unlikely be the last tailings dam failure, particularly in the high-risk artisanal mining sector.
The problems for the world's metals industry, moreover, extend the entire length of the supply chain. Mining and metals processing is a dirty business, generating waste, often toxic, at every segment of the chain.
The global mining and metals industry is responsible for around 10% of the total impact of climate change, according to the United Nations Environment Program. That was what the activists in Melbourne were demonstrating against.
The likes of Rio Tinto and other mining majors are now in a scramble to clean up their collective act.
At one level this is about the industry's license to operate in a world that is increasingly wary of the environmental costs of mining. Protests such as those at SQM's lithium mines in Chile are becoming ever more frequent across the metallic spectrum.
At a more fundamental level, it is about exposing metals to the sort of transparency standards that apply to other consumer sectors.
No-one used to worry much about where their metals came from until a new generation of consumer companies such as Apple put sustainable sourcing at the heart of their business models.
Where Apple leads, the entire automotive industry is following as it looks to burnish its own environmental credentials in the switch from the internal combustion engine to lithium-powered electric vehicles.
The concerns of the Melbourne eco-warriors may well be justified, but they were targeting the wrong people.
Attendees at the mining conference included the likes of Rio and BHP Billiton, big companies that are leading the sector's attempts to go green.
Not present were the owners of the Siberian gold mine that experienced the dam collapse or the shadowy controllers of the artisanal miners that were killed earlier this year near a Glencore-operated copper-cobalt mine in the Congo.
Probably not present either were the 416 mining companies that declined to respond to a survey on tailings dam safety conducted by the Mining and Tailings Safety Initiative, an investor group including the Church of England that has over $13.5 trillion in assets. Only 310 provided details of their facilities.
This is the nub of the problem.
While the world's majors trail-blaze the ESG path, the industry's reputation remains beholden to operators, both corporate and artisanal, that work on the old industry metric of getting as much metal out of the ground as possible at the lowest possible cost.
PRICING THE DIFFERENCE
Some in the official sector are already experimenting with integrating artisanal mining into their operations, particularly in the Congo, the poster-child for all that is wrong in the mining business.
However, such localized endeavors are a long way from a global response.
Rather, if old market forces are partly to blame for the industry's poor reputation, new market forces will have to be embraced to force the pace of change.
Think of the price premium consumers are prepared to pay for responsibly-sourced food and beverages.
Metals may have to go the same way. Indeed, it's already starting to happen.
The aluminum market is rapidly evolving to a two-tier structure of "green" (low-carbon) metal and "black" (high-carbon) metal, partly because Western producers have discerned a way to differentiate their product from Chinese aluminum, much of which is made using coal power.
There is as yet no market premium for "green" aluminum, but it is becoming an ever more important metric for environmentally-aware buyers.
The European Union, meanwhile, is looking again at the controversial issue of a carbon tax on imports of products such as steel from higher-polluting countries.
Such "carbon borders" may still be years away, but the direction of travel is clear and it's accelerating.
The irony is that the metals industry has one very powerful advantage when it comes to sustainability and environmental impact.
Metals are recyclable, almost infinitely so, and are already some of the most recycled products. Lead-acid battery recycling rates in both Europe and the United States, for example, are close to 100%.
Developing world countries are still some way behind such closed-loop perfection, although China is now on its own drive to boost recycling rates with the introduction of mandatory garbage sorting and processing in cities such as Shanghai. The Ministry of Ecology and Environment has designated 300 cities to go the same way by 2025.
Scrap represents the world's urban metal mines, a lower-carbon, lower-cost source of raw materials.
However, recycling rates even in Europe are still too low, with investment hindered by poor scrap pricing transparency and a lack of joined-up thinking between product design and recyclability, according to a 2017 study by Italy's University of Bologna. ("Urban Mines of Copper: Size and Potential for Recycling in the EU")
Nurturing the global metals scrap industry has an important role to play on the road to a more sustainable future.
But the real onus is on the world's miners. If they want to reap the benefits of the green technology revolution, they will have to revolutionize themselves.
The journey has only just started.
(Editing by Mark Potter)