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Adapting to a changing climate

John Drexhage, Director, ICMM28 June 2013, London Inaugural Institute of Materials, Minerals & Mining Fellows Breakfast Club

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Outline

• A changing climate in context

• Emerging drivers for adaptation

• Implications of a changing climate on the mining and metals sector

• Adapting to a changing climate

A changing climate in context – climate change and sustainable development

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A changing climate in context – a changing climate and the mining and metals sector

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Requires climate-sensitive inputs: water, energy, land, people

Dependent on global supply

chains

Operates in challenging

geographies and climates

Relies on large, fixed assets with

long design lifetimes

A changing climate in context – what is mining’s contribution to land and water use?

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Nature conservation

7%Other protected areas including Indigenous uses

13%

Minimal use15%

Grazing natural vegetation

55%

Mining0.02%

Other10%

No data0.03%

1.3% 4.0%8.0%

1.0%0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Canada Chile SouthAfrica

UnitedStates

Shar

e of

tota

l con

sum

ptive

wat

er u

se

Other

Environment

Agriculture andagroforestry

Electricitygeneration

Industrial

Public watersupply

Mining

Land use (Australia) [1] Consumptive water use [2,3,4,5]

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Emerging drivers for adaptation

Implications of climate change for the mining and metals sector

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CORE OPERATIONS

physical assets, production processes, health & safety, O&M

... workforce and changing

lifestyles

... other inputs into production

... customers and demand for goods and

services

... governmentsupplied services

... customers access to product

... disruptions to supply

chain

VALUE CHAIN ... supplies of natural resources

and raw materials

BROADER NETWORK... public/private electric and water utilities

and other infrastructure

Effects of Climate on...Climate-sensitive inputs: Water, energy, people

Supply chains: transport routes, infrastructure, access to markets

Markets: demand for goods and services, competition

Exploration & construction: access to new reserves, site design, building codes, minesite water balance

Operations: equip. performance and operating thresholds, workforce health and safety, stability of impoundments, disruptions

Closure & post-closure: Long term environmental monitoring, rehabilitation Source: [6]

Implications of climate change – a framework for evaluating risks

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Exploration

Construction

Operation

Closure

Post-closure

Inputs

Supply ChainsFinancial

Higher operating expenditure or

unplanned capital expenditure

ReputationalIncreased risk of

litigation, regulatory non-compliance,

inability to operate

Description: What is the impact?

Timeframe: When will the impactoccur? When is action necessary?

Stakeholders: Who is impacted?

Primary/secondary: Does theimpact directly affect activities ordoes it trigger other impacts?

Likelihood: How certain is theimpact? How much more often isit likely to occur?

Impact Areas Impact Evaluation Business Implications

Markets

Implications of climate change –arid or water-stressed environments

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Risk of:

• Insufficient water supply for operations

• Reduced availability and reliability of electricity

• Challenges in post-closure rehabilitation and water quality management

Sources: [11,12]

Implications of climate change –arid or water-stressed environments

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• Quillagua and Copiapó in Antofagasta and Atacama, northern Chile;

• Mining operations face risks from increased conflict over water rights, regulatory changes;

• Responding by sourcing raw seawater, increasing reuse & recycling, engagement with stakeholders.

Source: [11]

Implications of climate change –tropical climates

• Workforce impacts from heat stress and more frequent periods of extreme heat;

• Changes in the spread of vector-borne diseases;

• Indirect impacts from low level of resilience in vulnerable communities;

• Impacts on biodiversity, species extinction.

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Source: [18]

Implications of climate change –tropical climates

• Boane, Mozambique

• High infection rates (~85%), health impacts to workforce and local community

• Malaria control programs dropped infection rates to below 20%

• Motivated by workforce and community safety

• Have increased resilience to malaria within the region

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Sources: [15,16, 17]

Implications of climate change – coastal areas and regions likely to become wetter

Potential for:

• Coastal flood damage;

• Changes in minesite water balance;

• Changes in timing or flow of receiving bodies.

Impacts on:

• Capacity to handle heavy rainfall & flooding;

• Stability of open pit highwalls, tailing storage ponds, embankments;

• Long-term water quality.

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Sources: [13,14]

Implications of climate change – coastal areas and regions likely to become wetter

• Minto Mine, Central Yukon• In 2008, 2009: “two 100-year water

events in a row”• Shut down extraction, emergency

releases to Yukon River• $2.5M water treatment plant,

upgrades to diversion channels

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Credit: Capstone Mining Corp. http://capstonemining.com/s/Gallery_Minto.asp

• Queensland, Australia• Heavy flooding in 2010, 2011• 3- to 6-week rail closures • 12-week disruption on West

Moreton LineCredit: Oprel 2010. http://www.oprel.co/gallery/queensland-flood-damage/8373137

Adapting to a changing climate – a framework for adaptation

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Awareness, Engagement, &

Objective Setting

Monitoring, Evaluation, and

Reporting

Partnership and Collaboration

Risk and Opportunity Assessment

Adaptation Planning

Adaptation Actions

Adapted from [7,8,9,10,11]

Adapting to a changing climate – what is being done

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Adapting to a changing climate – what is being done

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Credit: Vale, BHP Billiton

Conclusions

1. The mining and metals industry is exposed to climate risks.

2. It is also very experienced at managing risk.

3. Mining companies are already taking action on adaptation.

4. Strategies must further incorporate climate change into existing risk management and planning activities.

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Conclusions (2)

5. External expectations for climate risk management are changing.

6. Specifically, the demand for anticipating and reporting on risks is increasing.

7. Adaptation offers opportunities to engage on broader, complementary sustainable development benefits.

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