When "dumping" has a dubious double meaning
Published by MAC on 2019-11-12Source: n
London Calling on COE's recent Rio Tinto decision
Norway welcomes Rio Tinto back
London Calling
Nostromo Research
12 November 2019
Norway's independent Council on Ethics has successfully recommended that the Nordic government's vast global pension fund eject a number of mining companies from its investment portfolio over the past decade and more.
Only two such offenders have since been re-admitted to the assembly; one of them being Barrick Gold.
The other is Rio Tinto - originally found culpable of directly providing financing and technical oversight to Freeport McMoran, the US operator of the world's largest single gold mine and among earth's premier copper extractors [see: Norwegian pension fund update 2917 ].
Those employed by the worthy Council to evaluate whether a company merits re-opening of Oslo's pearly gates to a former back-slider, clearly has to start with the main reason for cold-shouldering the company in the first place.
Rio Tinto's offence lay in assisting the river dumping of millions of tonnes of noxious tailings by the Grasberg joint venture in Papua. Entered into in 1996, this benefitted the UK enterprise by millions of dollars, once mined output exceeded a certain point [see: Freeport-Rio Tinto link condemned by Indonesians ]
Now that the British-Australian megalith has withdrawn from the corporate alliance, the COE can presumably tick the appropriate box on the criminal charge sheet, thus enabling the Norwegian exchequer to profit anew from one of the ostensibly most competent and well-organised miners on the planet.
The heart of Grasberg's conundrum
Alas, re-instating the "black sheep" into the fold in this fashion won't satisfy many who maintain a close eye on Rio Tinto's actions elsewhere; as reflected by the dissolute - and often-dysfunctional - disputes that marked this year's AGM, held two months before COE's rehabilitatory gesture [see: The spanking house JS couldn't build].
Indeed, the discourse between corporation and dissidents a year earlier. had included a prominent Indonesian activist, Pius Ginting, who'd recently toured the Grasberg lease area; he provided graphic testimony of the unique despoliation caused downstream of the mine by riverine tailings disposal. Supported by a fellow campaigner, Andrew Hickman, who's also dligently researched the same area, they tried focussing concerns on Rio Tinto's responsibility to indigenous Papuans who've suffered decades of poisoned fish and extinction of other fauna and flora [see RioTinto called to account ].
They asked a simple question: "In future, how will Rio Tinto financially and morally account to the Papuan people for this massive destruction?"
The company's chairman, Simon Thompson, claims that the Indonesian government had taken on these liabilities, after effectively forcing the world's second most capitalised miner to surrender its Grasberg stake. (It's something the former Indonesia administration had done when it sheared-off Rio's managing role in the Kaltim Prima coal mining venture in eastern Kalimantan, bequeathing a situation which later became a morass of invidious and profoundly harmful operations, thanks to the takeover by the notorious Bumi's) [see: Kaltim's deadly coal].
Papua's future
Indonesia's future relationship with any fresh protector of Papua's dire environmental plight, as well as what remains of Freeport's over-arching responsibilies, is in severe doubt. The territory has been ridden with murderous conflict for decades, as many Papuans struggle for political independence from the state; something that will never be resolved while mining continues to buttress Indonesia's economy.
Now that COE has re-admitted Rio Tinto to its investment portfolio, it's no longer in a strong position to influence developments in this sorely-afflicted part of the world. It might exert more pressure on Freeport itself - though that US outfit doesn't seem to enjoy the "compatability" which the Norwegians had with the British firm, whose perception of indigenous peoples' rights has been (arguably) more respected.
Finally, however, the vital question addressed by Ginting and Hickman to Rio Tinto, remains signally unanswered.
The Brits didn't make an ethical decision to quit Grasberg.
They've washed their hands of any accountability for the swathes of misery and environmental despoliation left behind, which they were instrumental in creating.
At the very least, shouldn't the COE maintain its investment embargo against Rio Tinto?
"Pragmatic" sustainabililty
And continue doing so until the firm publicly does the right thing: admit co-responsiblity for the outrageous human and biosphere legacy of Grasberg, and guarentee direct oversight of its complete amelioration?
Meanwhile, Rio Tinto CEO Jean-Sebastien Jacques' recent address to the London Metal Exchange has promised a "more environmentally friendly way" of doing business, provided it is “based on a pragmatic kind of sustainability. With profitability at its heart.”
Such contradictory words offer little comfort to investors - and others - who place confidence in this company as a pioneer of ethical ideals [see:Is Rio Tinto becoming a robo-cop?].
Norway’s $1 trillion fund builds Rio stake after dirty mine sold
Bloomberg News -
21 October 2019
After freezing out Rio Tinto Group for more than a decade for owning a
highly polluting copper mine, one of the world’s biggest sovereign
wealth funds has brought the company back into the fold.
Norway’s $1 trillion wealth fund built a 1.4% stake in the world’s No. 2
miner by the end of September, according to Bloomberg data. That puts
the fund among the top 10 holders of Rio Tinto shares, the data show.
The investment demonstrates the value of meeting the increasingly
aggressive environmental goals set by some of the largest money
managers. Norway’s wealth fund is at the forefront of those efforts, and
said earlier this year it would stop investing in companies that mine
more than 20 million tons a year of thermal coal, the most polluting
fuel. Miners including Glencore Plc and Anglo American Plc are set to
fall foul of this rule.
Norway refused to buy Rio Tinto stock for more than a decade because of
the environmental damage caused by its Grasberg mine in Indonesia, one
of the world’s biggest copper and gold projects. In June, the fund said
it had revoked that exclusion, after a recommendation from its Council
on Ethics.
Rio agreed to sell its stake in Grasberg last year for $3.5 billion. The
mine, operated by U.S. company Freeport-McMoRan Inc., is highly
contentious. Every year it dumps tens of millions of tons of mining
waste into an Indonesian river system and will continue to do so for
years to come.
Rio has sought to burnish its environmental credentials, becoming
increasingly vocal on the subject. After offloading its last coal mine
in 2018, the company has sought to distinguish itself from rivals that
still have fossil-fuel exposure.
(By Thomas Biesheuvel)
Rio Tinto says miners need to leverage technology as scrutiny of the industry rises
Reuters
28 October 2019
Mining companies should make more use of technology to respond to increasing demands from investors and communities for responsible mining practices, Rio Tinto CEO Jean-Sébastien Jacques said on Monday.
Technologies such as autonomous rail-cars and increased automation can lower the impact of the industry on the environment as well as raise profit margins, he said, adding that blockchain can be deployed to track if the supply chain met ethical standards.
“There is absolutely no doubt in my mind we will face greater regulation and scrutiny,” Jacques said in a keynote speech marking the beginning of London Metal Exchange (LME) Week in London.
“Society expects more of our industry which in turn brings with it a sea-change in shareholder expectations and more and more questions on our business model.”
Pressure from investors with an environmental, social and governance, or ESG, agenda has forced miners to focus on their climate and community credentials as part of efforts to repair an image tarnished by environmental disasters and overspending.
Rio makes aluminium and produces coal, both of which are high emitters of carbon. The company is collaborating with Apple and Alcoa to slash its carbon footprint by developing ways to make carbon-free aluminium.
“The only way we can truly tackle climate change is through partnerships across the value chain,” said Jacques.
Rio has pledged substantial decarbonisation by 2050 while larger rival BHP said in July it would invest $400 million over five years to reduce
emissions.
Rio is also looking into generating battery-grade lithium carbonate from waste rock in California and testing new approaches at its Winu copper project in Australia, he said.
He added that the approach to doing business in a more environmentally-friendly way needs to be “based on a pragmatic kind of sustainability. With profitability at its heart.”
“Only a profitable business can provide sustainable benefits to shareholders, to communities, and governments.”
In August, Rio announced its highest margins in a decade and a record dividend payout, part of an industry-wide recovery from the commodities
crash of 2015-16.
The LME, the world’s oldest and largest metals trading hub, has said it could ban metal tainted by child labour, money-laundering and corruption by 2023.