PDAC steals show at GRI session on MMSS

As noted in an earlier blog, GRI launched its Metals and Mining Sector Supplement during PDAC’s 78th Annual Conference held in early March in Toronto which attracted 21,600 attendees. So how and why did PDAC manage to steal the show at GRI’s June conference session on the Mining and Metals Sector Supplement?

It seems that many in the audience – and perhaps even amongst those on the panel - were surprised to learn about the discovery-to-production value chain in the mining sector. PDAC’s presentation helped the audience appreciate the 98% failure rate and cash-flow negative status in the industry, with few discoveries ever leading to a producing mines. Probably for the first time, many in the audience realized that the largest numbers of companies in the mining sector are Micro/SME sized and not the big brands most people associate with this sector. It is also in this ‘upstream’ space where the seeds of good/bad community relations are planted which will continue to influence above ground (extra-financial) risks/opportunities and relationships for years to come.

Perhaps some also realized the sustainability reporting challenges faced by the exploration and junior segments. I wonder how much of that filtered into the discussions of the working group developing the GRI Metals and Mining Sector Supplement. The industry participation of that GRI working work, it becomes evident that it was heavily tilted towards the majors and members of the International Council on Metals and Mining or ICMM. And before sharing the list with you, let me pause to acknowledge and commend ICMM and all of their members (and other organizations) who all participated in GRI’s multi-stakeholder process. 

The participants of the GRI working group included the following companies (and I added a ‘*’ to denote ICMM membership): Ambatovy (major owners Sheritt and Sumitomo*); Anglo American*; BHP Billiton*; Newmont Mining*, European Nickel (recently merged with Rusina);  First Point Minerals Corporation; Placer Dome (now part of Xstrata*); Rio Tinto*; Sumitomo Metal Mining*; Teck* and Vale*.  Clearly, the majors (and their needs) were very well represented.

Outliers in the industry bunch on the GRI working group included European Nickel (recently merged with Rusina) and First Point Minerals. Perhaps these two and others in the exploration cum junior sector (including PDAC) can reach out to their peers to help make the business case and separate the misperceptions associated with the GRI framework from reality – or develop other workable approaches to help create more shareholder/sustainability value.

My own efforts in this realm include developing and offering the first GRI-certified training program in North America, providing more tailored boot camps and supporting junior/pre-production and mid-tier miners to develop their inaugural sustainability reports, and publishing articles and blogs to raise awareness (see also my article “Sustainability Reporting using GRI Lessons Learned Nov09” which appeared in the November 2009 issue of the Mining.com Magazine), and highlighting convergance of GRI with other frameworks (such as IFC Performance Standards/Equator Principles) used by a variety of investors and political risk insurers. 

What do you think PDAC and others should do to help junior/mid-tier mining segment cross the reporting chasm and start their sustainability reporting journey?

4 Comments to PDAC steals show at GRI session on MMSS

  1. Johnason A, Vice President Aboriginal Affairs & Sustainability at De Beers Canada Inc. left the following comment on GRI’s Metals & Mining LinkIn Group:

    http://www.linkedin.com/profile?viewProfile=&key=25314436&authToken=IbID&authType=name

    “Yes, there are a large number of small to medium sized exploration copnaies out therem, and not just in Canada. GRI is not a one-size-fits-all for the mining and metals supplement, and there is a significant requiremnt for a suitable tool for these exploration cpmapnies to use for reporting. Many do not have huge staffs or a great deal of capacity for reporting and most have tight cash flows. The issue is to identify what are the key indicators (GRI, KPI or wahtever) that are appropirate for exploration. The vast majoirty of projects never go beyond the grass roots: few reach a full evaluation program, and even fewer go to feasibility and beyond. Figures being cioculted a few years ago talked of odds in excess of 1:1500 for a project going forward and becoming a mine. With such a large number of exploration companies and projects out there, we should think how best to encourage them to report. Most owuld love to, but the complexity and reuirenments of GRI are just not within their cabailities. WHo is going to come up with a suiotable model?
    PDAC performed a great service by drwaing attention to this under-noticed segment, and it has been a real eye-opener for many. I speak form over 40 years of exploration and kinjng, and helping prepare reports to GRI criteria for the last two years for my employer, and feeding information for several years before that to a parent company for incproation into their GRI report. Most of us would live to submit “One Report” capturing our sustainability / CSR / ecpnomic infomration in one docuemtnon line or in hard copy. The question is how do we do so in a simple and cost effective manner”

  2. Many thanks for your comments, Jonathan. I noted your points regarding complexity of GRI, limited capacity of exploration/juniors, tight cash flows and need for a pragmatic approach to reporting .

    As you know, GRI already offers a process for reporters to focus their activities through GRI’s ‘materiality test’. A simple survey by PDAC could establish some of the significant issues of interest to both smaller mining companies and their stakeholders. This would help elimianted a lot of the ‘noise’ of what must appear to be endless disclosure requirements and indicators scaring many companies.

    There are some strategic choices PDAC and GRI need to consider, and a possible partnership is only one of them. It seems to me that a GRI-PDAC partnership mentioned during the GRI session is not really all that certain at this time. PDAC – perhaps taking also a page out of the Mining Associations of Canada’s Towards Sustainable Development (TSD) –seems to be considering a tiered reporting and certification program. The alignment of such an approach with GRI’s framework has not been fully explored/understood at this time, nor have the implications of using alternative approaches been properly evaluated. Also, I am not convinced that GRI would have much of an appetite to develop another/sub/sector supplement (if needed) focused on the exploration/junior segment. I imagine that GRI has only a limited bandwidth and its plate full… Not to mention that GRI’s sector supplements typically take many years to develop, pilot and finalize.

    The business case is perhaps most evident to the larger exploration companies/junior mining companies. This is where I see some fertile ground for action. Some exploration/junior leaders – perhaps supported by PDAC (with support by Canadian Government?) – could road test sustainability reporting in a cohort setting, which could be facilitated/supported by an external consultants. This would not only be cost effective, but it could also help break the ‘curse’ of the largely misunderstood GRI process which has created an unintended barrier to reporting. It could demonstrate that such sustainability reports can be created with limited effort/cost, create some tangible value for the reporter, and provide an honest discussion of challenges and opportunities getting there.

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  4. […] Mining and Metals Sector Supplement. This is not a new development as I have blogged previously (PDAC steals show at GRI session on MMSS). PDAC deserves commendation for its efforts to bridge the sustainability reporting gap between the […]

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