采礦及金屬行業(yè)2022年十大業(yè)務(wù)風險與機遇-44正式版

Top10business

risksand

opportunities

forminingand

metalsin2022

ExecutiveSummary

Opportunitieswillcontinuetooutweighrisksin2022,asongoingsocialdisruptionbecamethecleardriverofchangeinourindustry.WhiletherewerefearsthattheCOVID-19pandemicmayslowglobalprogressonsustainabilitymeasures,theoppositehasbeentrue.Itisclearfromoursurveyresultsthatpurpose,long-termvalueandsustainabilityare

nolongeradd-onstobusinessasusual—theyarebusinessasusual.Externalinfluenceswillkeepdrivingrisksandopportunitiesasstakeholderandcapitalmarketpressurecontinuestoholdminersaccountable.

It’snotsurprisingthenthatthetopthreerisksandopportunitiesthisyearfortheminingandmetalssectorare:environmentandsocial;decarbonization;andlicensetooperate(LTO).

1 Environmentandsocial

Whilemanyconversationsinthemarketarecurrentlyfocusedaroundtheenergytransitionandroadtodecarbonization,25%ofoursurveyrespondentssawenvironmentalandsocialissuesasthenumberonerisk.Whilethiswas

initiallysurprising,webelieveitisindicativeofminersandstakeholdersbroadeningtheirperspectives.Minersneedtobeabletodemonstratetheircontributiontoasustainablefutureiftheyaretoaccesstherapidlygrowingpoolofcapitalavailableforstrongenvironmental,socialandgovernance(ESG)performers.

2 Decarbonization

Decarbonizationhasbecomeamajordisrupterinthesector,dominatingmanydiscussionsandpresentingbothrisksand

2 |Top10businessrisksandopportunitiesforminingandmetalsin2022

Top10businessrisksandopportunities

i

a

tiv

ty

nd

co

uc

od

st

Pr

s

i

s

m

us

nes

ew

b

od

el

N

s

rkfo

Wo

rce

10

landi

nnov

ita

ati

ig

o

9

D

n

in

dem

erta

nc

an

8

U

d

7

7

Capital

9

6

po

eo

liti

5

G

cs

6

e

o

t

op

ns

e

e

c

r

4

i

a

5

L

o

te

3

rb

niz

1

ca

ati

e

o

2

D

iron

n

4

v

m

n

e

E

n

d

so

t

c

n

i

1

a

a

4

l

1

2

0

2

2

n

0

i

2

in

g

2

k

n

a

R

Upfrom2021Downfrom2021Sameas2021Newtotheradar

3

Aboutthesurvey

Wesurveyedglobalminingandmetalsexecutives,betweenJuneandSeptember2021withthemajorityofrespondentsbeingfromtheC-suite.

opportunities.Oursurveyrespondentshaveelevatedtherisktosecondplacefor2022,upfromfourthlastyear.Decarbonizationneedstointegrateintoacompany’soverarchingstrategy,ratherthanbeaddressedasaseparateordistinctpath,delegatedtoadiscreteteam.Almostallminingandmetalscompanieshavesetdecarbonizationtargetsbut,withoutunderstandinghowtoreachthem,arecommittingtopotentiallyunrealisticgoals.Companiesthatsharetheirroadmaptonetzeroandtheirsuccessesalongthewaycangaininvestorconfidenceand,potentially,competitiveadvantage.

3 Licensetooperate(LTO)

LTOhaslostthetopspotithasheldforthepastthreeyearsbutisstillseenasatopthreerisk.Minersthatcandemonstratetheirsocietalvaluewillstrengthenrelationshipswithstakeholdersandberewardedinthemarketplace

withlowercostsofcapital,betterhumancapitalengagementand,inthelongrun,improvedmarketvalue.

Sectordisruptionhascreatedalargenumberofopportunitiesforthosethatcancapitalizeonthem.Companiesthatcandemonstratetheyareoperatinginthebestinterestsofabroadgroupofstakeholderscangainacompetitiveedgeinthefightforcapitalandnewresources.Takingactionnowwillenableasustainablefutureforthesector.

Inthefaceofgenerallypositivefuturedemand,bothas

aresultofgovernmentstimulusandtheenergytransition,itiscriticalthatminingandmetalcompanieshavetheabilitytocompeteeffectively,particularlywithnewentrantsintothesectorasdownstreamplayersinvesttosecuresupply.Thismeansconsideringnewbusinessmodels,astrongfocusonscenarioplanningandthenoptimizingportfoliosthatallowforflexibilityinthefaceofincreasingchange.

DocumenttitleAdditionaltext| 3

Environmentandsocial

01

10

9

8

7

6

5

4

3

2

uctivity

a

nd

co

od

Pr

sts

i

sness

mo

ew

bu

de

N

ls

r

o

Wo

kf

rce

di

n

lan

nov

ita

ati

ig

o

D

n

in

dem

erta

nc

a

U

nd

Capital

opo

l

iti

Ge

cs

e

t

o

op

ns

e

e

c

r

i

at

L

boni

e

ar

za

c

ti

e

o

D

on

n

ir

m

v

e

n

n

E

d

so

t

ci

1

n

a

a

l

(Upfrom4in2021)

4 |Top10businessrisksandopportunitiesforminingandmetalsin2022

Minersthatmanagetheirimpactontheenvironmentandcommunitiescanbuildapositivelegacy

Overthepastyear,miningandmetalscompaniesfocusedondecarbonizingoperationsasexternalpressuresincreased.Forthenext12months,weexpectstakeholderexpectationstobroadenaroundissuessuchasbiodiversity,socialimpactandwatermanagement.MinersarebeginningtointegrateESGfactorsintocorporatestrategies,decision-makingandstakeholderreporting,astheissuebecomesapriorityforshareholdersandinvestors.1EYresearchhasfoundthat91%ofinvestorsnowviewnonfinancialperformanceas“pivotal”intheirinvestmentdecisions.2

Forminingandmetalscompanies,navigatingESGisincreasinglychallenging,giventhebreadthofissuesthesectorfaces,aswellasthemyriadofreportingstandardstowhichtheyneedtoadhere.Twenty-fivepercentofoursurveyrespondentssaybothenvironmentalandsocialissuesarethenumberonekeyriskandopportunity,butourfindingsindicatethatgovernanceisnotyetseenasanissue,butthiswillchangeasthefocusonsocialissuesincreases.

Managingsocialimpactandensuringa“just”transition

TheCOVID-19pandemichasfocusedattentiononsocialinequalities,placingpressureoncompaniestogobeyondtheirregulatoryobligationsandtakeresponsibilityfordrivingsocialequalityintheregionsinwhichtheyoperate.Manyminesareinremote,underdevelopedpartsoftheworldwithlocalcommunitiesthatrelyonminingforeconomicgrowth.Minershavearoletoplayinensuringthelong-term,sustainableeconomicgrowthandsocialprogressoftheseregionsbyworkingwithgovernments,nongovernmentorganizationsandcommunitiestoleaveapositivelegacybothduringandbeyondlifeofmine.

Thisisanissuethatwillincreasinglycometotheforeastheenergytransitionaccelerates,andminersmoveawayfromfossilfuels.Maintainingintegrityand,ultimately,LTOwillrequirecompaniestomanagethischangewithcare

andlimitnegativeimpactsoncoal-dependingeconomiesandcommunities,includingwomen,youngpeopleandIndigenousgroups.

Transparentsupplychainscandemonstratehumanrightscommitments

Aknock-oneffectoftheCOVID-19pandemichasbeenariseintheuseofchildlaborandinviolenceagainstwomen.AsmorefinancialinstitutionsadopttheEquatorPrinciples(EP)riskmanagementframeworkaroundsocialrisk,minerswillneedtodemonstratetheircommitmenttohumanrights.Inparticular,EP4mandateshumanrightsassessmentsbeperformedbeforeprojectfundingisawarded.WeexpecttoseemoreminingcompaniesadopthumanrightsbestpracticeacrosstheirsupplychaintomeetexpectationsandretainLTO.

Progressiveplanningforclosureshouldbeadoptedacrosslifeofmine

Manyminingcompaniesaremissingrehabilitationperformancemeasuresandtargets.ThosethatareleadingthewayhaveputacommitmenttosustainabilityfirmlyontheCEOagendaandperformancemeasures,whichthencascadesdownthroughthebusiness.Thisoverarchingvisioniscriticalconsideringthecomplexityoftheissue—minersmustnavigatedifferentpolitical,socialrequirements,aswellaswhat’sbestforcommunitiesintermsofleavingalegacybeyondlifeofmine.Progressiverehabilitationplanswillhelpminerstoavoidthepotentialblowoutsthatwehaveseenacrosstheindustryinthepast,butthisneedstostartwithmineplanning.

BiodiversityhasyettoreceivethesameattentionasotherESGtopics,suchasclimatechangeorgenderdiversity.Butmomentumonthesubjectisbuildingasmorebusinessesrealizethatthebenefitsofprotectingnaturalcapitalcanoutweighthecosts.

Withfutureminessettobecarbonneutralandsustainable,themajorityofthesector’senvironmentalriskandliabilitywilllieinclosedlegacyassets.Tailingdamsandcontaminationaretwosignificantrisksrequiringongoingmonitoring.Digitaltoolscanhelpwiththis.

“Theroleofwaterinmining’ssustainabilityjourney,”Aquatech,4November2020,via

/news/industrial-water/mining-

giants-tackling-water-use-with-tech/.

“ANZtostoplendingtoAustralia’sbiggestcoalportoveritsexposuretofossilfuels,”TheGuardian,9February2021,via

/

australia-news/2021/feb/09/anz-to-stop-lending-to-australias-biggest-coal-port-over-its-exposure-to-fossil-fuels

Top10businessrisksandopportunitiesforminingandmetalsin2022| 5

Managingthewater-energynexus

Thewater-energynexusrelatestohowmuchwaterisusedtogenerateenergyandhowmuchenergyisusedtocollect,distributeanddisposeofwater.WatermanagementislikelytobeoneoftheESGissuesmostscrutinizedbyinvestorsin2022,accordingtooursurveyrespondentswhorankeditthenumbertwoESGissueoninvestors’minds.

Currently,thesectortendstowardsettingblankettargetsaroundwaterusage,buttheseoftendonotacknowledgethetrade-offs,whichwilllikelycometotheforeasESGmeasuresandreportingstandardsimprove.Forexample,sometechnologiesthatsavewatercanalsobeenergyintensive.

De-wateringoftailingsdamsisessentialtoavoidthe

tailingsfailuresthathavebeeninthespotlightinrecentyears.Newtechnologytorecovercoarseparticlescanimprovebothenergy

efficienciesandwatersavingsbyabout30%,andde-wateringthemeliminatestheriskofwettailings.3

Embracingthecirculareconomy

Inthecirculareconomy,miningandmetalscompaniesfaceanumberofrisks,butcanalsocapturetheopportunityforrecoveryandrecycling,throughtoproduct-as-a-service.Recyclingratescurrentlyvaryforallmineralsandgeographiesduetocostsandtechnicalissues,butastechnologyimproves,opportunitiestoadoptcirculareconomypracticestorepurposeandregeneratewillonlyincrease.Thecapitalmarketsarebeginningtoplayaroleinacceleratingtheshifttoacirculareconomy.BlackRock,forexample,hasformedapartnershipwiththeEllenMacArthurFoundationtodriveinvestmentincompaniescontributingto,orbenefitingfrom,circulareconomyactivities.Companies

Whicharethetopenvironmentalandsocialissuesonwhichtheminingandmetalssectorwillfacethemostscrutinyfrominvestors?

Localcommunityimpact

6.52

Watermanagement

6.26

Greenproduction

5.08

Diversity

3.28

Biodiversity

3.15

Source:Top10businessrisksandopportunitiesinminingandmetalsfor2022surveyrespondents.

“EUproposesworld’sfirstcarbonbordertaxforsomeimports,”Reuters,15July2021,via

/business/sustainable-business/eu-

proposes-worlds-first-carbon-border-tax-some-imports-2021-07-14/

6 |Top10businessrisksandopportunitiesforminingandmetalsin2022

thathesitatetoadoptnewcircularmodelsmaynotonlymissoutonopportunitiestocreatevaluebutfindtheirabilitytooperatetheircorebusinessimpacted.

SettingadirectiononESGreportingstandards

Therehaslongbeenconcernaboutwhatbecameknownasthe“alphabetsoup”ofESGmeasurementandreportingstandards,whicharemultipleandsometimesduplicativetofollow,makingithardforminerstoquantifyanddemonstratevaluefromanESGperspective.

Theaggregationofstandardsissomethingthatwouldbenefitminers,aswellasinvestorswhoarekeentohavealevelplayingfielduponwhichtoassesshowcompaniesareperformingversustheirpeers.

TheIFRSFoundation4hasaddedanincreasedurgencytothesearchforcommonstandards,andthereisadegreeofoptimisminthesectorthatasolutionisinsight.WewouldanticipatethatwiththeemergenceofthesecommonstandardswillcomepressurefromshareholderstolinkESGperformancetoseniormanagementpay,toholdleadershipaccountableforthecompany’sactions.

CarbonPricesnowApplytoOveraFifthofGlobalGreenhouseGases().

Keyquestions

forconsideration

Asminingandmetalscompaniesintegrate

environmentandsocialrisksandopportunities

intotheirstrategies,thefollowingquestions

canhelp:

DoyouunderstandwhatESGmeasuresaremostimportanttoyourstakeholders?

Howareyoumeasuring,monitoringandcommunicatingperformanceagainstthesetargets?

Howareyouplanningforclosuretocreateasustainablelegacybeyondlifeofmine?

Top10businessrisksandopportunitiesforminingandmetalsin2022| 7

Decarbonization

02

10

9

8

7

6

5

4

3

2

uctivity

a

nd

co

od

Pr

sts

i

s

ness

mo

ew

bu

de

N

ls

Wo

r

o

kf

rce

di

n

lan

nov

ita

ati

ig

o

D

n

in

dem

erta

nc

a

U

nd

Capital

opo

l

iti

Ge

cs

et

o

op

ns

e

e

c

r

i

at

L

boni

e

ar

za

c

ti

e

o

D

on

n

ir

m

v

e

n

n

E

d

so

t

ci

1

n

a

a

l

(Upfrom4in2021)

8 |Top10businessrisksandopportunitiesforminingandmetalsin2022

Practical,flexibleabatementstrategiescanachievenetzero—andcompetitiveadvantage

Thepastyearhasseenminersandinvestorsaccelerateconversationsandactionsarounddecarbonization,whichisnowamajordisrupterinthesector,presentingbothrisksandopportunities.It’snotsurprisingthenthatdecarbonizationtakesthenumbertwospotof2022’sranking,upfromfourlastyear.

Financialinstitutions,includingbanks,pensionfundsandinsurancecompanies,havebeendecliningtofinancethermalcoal-relatedinvestmentssinceasearlyas2013.Butthistrendhasgainedmomentumandevenbroadenedoverthelast

12months,culminatingintheG7announcementtoendallgovernmentfundingofthermalcoalbytheendof2021.

Carbonpricingsettoincrease

Investors’moveawayfromcoalcomesasclimateregulationsandexpectationsincrease.TheEUrecentlyproposedtheworld’sfirstcarbonbordertax,5effectivelytaxingcarbonemittedduringsteelandaluminiumproductionincountrieswithoutacarbontax,whentheendproductarrivesintheEU.Thiswillhaveasignificantimpactontheimportofsteelandaluminium,andisanotherexampleofcountriescomingtogethertoactinconcert,inturninfluencingotherstodothesame.

Actionssuchasthese,intandemwithothercarbonreductionregulations,arelikelytohaveasignificantimpactonnetexporters,andmayevenpushthosecountrieswhereproductiontakesplacetoreactwiththeirownpriceoncarbon.And,withmanyoftheworld’sgovernmentstryingtoraiserevenueafterspendingmorethanUS$30tgloballyonCOVID-19-relatedstimulus,weseeariskthatsimilartaxesandpolicieswillberolledoutmorewidely.Currentlyonlyone-fifthoftheworld’sgreenhousegasesarecoveredbycarbonpricinginstruments,butthisislikelytoincrease.6Navigatingtheseemergingregulationswillbeachallengeforminers,bothintermsofmanagingdecarbonizationeffortsandreportingagainsttargets.

Butevenasminersfacethechallengesofdecarbonization,andthemajorityhavecommittedtonetzeroby2050,fewhavemadethenecessaryinvestmenttoachievethis.Wesuspectthisisbecausemanyminersarestillworkingthroughwhatnetzeromeansforthem,andwillwaitforanswersbeforeallocatingcapital.

Buildingaflexibledecarbonizationstrategywithpracticalpathways

Decarbonizationisasectordisrupterand,assuch,needstobetreatedlikeanyotherstrategicrisk—dealtwithataboardandexecutivelevel,andmanagedaspartoftheoverarchingbusinessstrategy,ratherthanaddressedasaseparateclimatestrategydelegatedtoadiscreteteam.

Doingthissuccessfullyrequiresminerstoconsider:

Scenarioplanningthedifferentpathwaystonetzero,tocreateaflexible,agiledecarbonizationstrategy

Aligningorganizationdesignandculturebyincentivizingbehaviorthathelpsachievetargets

Incorporatingnet-zeroachievementintocapitalallocationmethods

Determiningwhichtools,technologyandinnovationtoinvestin,andwhotocollaboratewith

Decidingwhentosellexposedassets,orwhethertotransitiontonewenergyeconomymetals

Assessingotherpotentialopportunities,includingrecycling,renewablesandcarbon-reducedproducts

Reviewingfundingandcapitalmodels,includingfundingsources,theroleofgovernmentandinternalallocation,andhowtomakebestuseoftaxbreaksandincentives

Determininghowoffsetsandotherfinancialinstrumentscanbeusedtohelpachievenetzero

“GlobalinvestorsengagetopminingcompaniesonIndigenouscommunityrights&sociallicence,”ChurchofEngland,28October2020,via

/news-and-media/news-and-statements/global-investors-engage-top-mining-companies-indigenous

“BenWyatttojoinRioTintoBoard,”RioTintoMediaRelease,4June2021,via

/news/releases/2021/Ben-Wyatt-

to-join-Rio-Tinto-Board

Top10businessrisksandopportunitiesforminingandmetalsin2022| 9

Whatareyourtargets(intermsoftime)toreduceyourcarbonemissionsandattainnetzero?

Notargetssetyet

23%

20%

2025

26%

3%

2030–40

41%

27%

10%

2041–50

49%

Scope1and2

Scope3

Source:Top10businessrisksandopportunitiesinminingandmetalsfor2022surveyrespondents.

Thelowhangingfruit–scope1and2abatement

Abatingscope1and2emissionsshouldbehighontheagendaforminersand,ideally,alreadyinprogress.Itwassurprisingtoseethatmorethan20%ofoursurveyrespondentsstillhadnotargetstoachievenet-zeroscope1and2emissions,evenwithcapitalmarketpressureonthesector.Minersneedtoactnow,toavoidbecominglessattractivetocustomersandcapitalmarketsthantheirpeers.

Weseeseveralopportunitiesforminerstoreduceemissionson-site:

Aswellasprovidingareductioninamine’scarbonemissions,switchingtorenewablesisasmartuseofthelandthatsurroundsthemine.Fleetelectrificationandreplacingdieselwithzero-carbonfueloptionsacrossthevaluechainofferopportunitiestodecreaseon-siteemissions.Renewableenergyisthemostcost-effectiveabatementinitiativeandcanreduceemissionssignificantlydependingonsiteconditionsandlocation.

Butthesemeasuresalonewillnotfullydecarbonizeamine.Emissionsfromprocessing,ventilation,heatingandcoolingandbackuppowergenerationremainsignificant.Carboncaptureandstoragewillbeneededtoachieveanet-zerotarget,potentiallyalongsideotherformsofcarbonoffsets.

Renewableenergy

Scope1&

2emissions Fleetelectrification/

zeroemissionvehicles

Efficientequipment

Offsets/credits

Carboncapture

andstorage

10 |Top10businessrisksandopportunitiesforminingandmetalsin2022

Whyswitchtorenewables?

Incentivesorgrantsmaybeavailabletoearlymovers,and,ifcarbonistaxed,financialbenefitsareonoffer—ifnot,capitalmarketswillstillrewardthemove.Theinfrastructurethatgetspowertositeenablesminestosenditbacktogrid,andcombiningpowergenerationwithcarboncaptureandstoragecanreduceemissionsfurther.Whenminesclose,theearlyinvestmentinrenewableswillgeneraterevenue—beyondlifeofmine.

Capturethepremiumorsomeoneelsewill—scope3abatement

Abatingscope3willbetherealgamechangerinminers’questforlong-termsustainabilityandperformance.Ourmessagetocompaniesstillhesitatingovertheissueissimple:unlessyoucancontroltheseemissions,yourisklosingvalueandcompetitiveadvantage.Butabatingscope3emissionsrequiresminingandmetalscompaniestomakebigchangesinhowtheyoperate,collaboratemorewithclientstodecarbonizethewholevaluechainandarticulatethevaluetostakeholders.Thislastmileofdecarbonizationishard,anddatacollaborationposespotentiallimitations

totheaccuracyandcompletenessofdataneededtosupporttargets.Forminers,thekeychallengewillbetoencourageandempowerpartiesacrossthevaluechaintobecarbonneutral.

Communicatingfortransparencyandvalue

Amiduncertaintyaroundemergingcarbonlegislation,minersneedtorespondappropriatelytoshareholderpressuretomeetclimatetargets,andavoidcommittingtopotentiallyunrealisticgoals.Sharingtheirroadmap

tonetzeroandtheirsuccessesalongthewaywillbekeytogaininginvestorconfidenceand,potentially,competitiveadvantage.

Keyquestions

forconsideration

Asminersbuildaproactiveplantodecarbonize,

keyquestionscanshapetheirlong-termstrategy:

Howdowedeliverandoperategenerationassets?

Arewemakingthebestuseoftaxbreaks,incentivesandfinancestructuresavailable?

Whatarethefundingandcapitalmodelsavailabletous?

Doweknowwhichtechnologyshouldbeusedtoscaleupandacceleratedecarbonization?

Top10businessrisksandopportunitiesforminingandmetalsin2022| 11

Licensetooperate

03

10

9

8

7

6

5

4

3

2

uctivity

a

nd

co

od

Pr

sts

i

s

ness

mo

ew

bu

de

N

ls

r

o

Wo

kf

rce

di

n

lan

nov

ita

ati

ig

o

D

n

in

dem

erta

nc

a

U

nd

Capital

l

opo

iti

Ge

cs

e

t

o

op

ns

e

e

c

r

i

at

L

boni

e

ar

za

c

ti

e

o

D

on

n

ir

m

v

e

n

n

E

d

so

t

ci

1

n

a

a

l

(Downfrom1in2021)

12 |Top10businessrisksandopportunitiesforminingandmetalsin2022

Creatinglong-termvalueforallstakeholderscansecuremining’sfuture

LTOisanevolvingandcomplexissueforminingandmetalscompanies.Shareholderexpectationsarechangingfastaroundmyriadsectorchallenges,includingmining’scontributiontocommunities,economies,protectionofheritagesitesandengagementwithIndigenousandFirstNationspeople,aswellastheindustry’sroleinethicalsupplychainsandtheclimatecrisis.Resourcenationalismisalsoontheriseasdiscussedwithinournumberfourrisk,geopolitics.Tailingsdamsafetyisalsoafocusofinvestors,whoaredemandingminersdomoretoeliminatethefailuresthatcandevastatelocalcommunitiesandtheenvironment.TheChurchofEnglandPensionsBoard(CEPB)DirectorofEthicsandEngagement,AdamMatthewssaidtheissueoftailingsdamsafety“hasexposedasystemicissueacrosstheminingsector.Oneachoccasion,theminingsectorfurthererodesthetrustinitssociallicensetooperate.”7

Takingaproactiveapproachtomanagingtheseissuesremainscritical,asweseeincreasinglinksbetweenacompany’sabilitytoaccessdebtcapitalandtheirsocialandenvironmentalimpact.Minersthattaketheopportunitytobetterdemonstratetheirpositivecontributiontocommunitiesandbuildtheirbrandcanenhancetheirabilitytoaccessnewresources,capitalanddebt.

BroaderconsultationwithTraditionalOwnerscanimprovedecision-making

Over40%ofoursurveyrespondentssaythatcommunityengagementwillbethefocusofinvestorscrutinyofminingandmetalsin2022.

Muchofthefocuswillbearoundminers’engagementwithFirstNationspeopleandotherstakeholders.