Can We Alleviate the NIMBY Effect in Mining? ^†

Abstract

Given the resistance of local communities to mineral extraction (“Not in My Back Yard” NIMBY), the energy transition and the new global economic model, which presupposes a sharp increase in the production of mineral raw materials, represent an opportunity for new approaches to mining. Considering that greenfield mines take years to be licensed and developed, the new attitudes should include the support and launch of policies and regulations that can enhance the growth of mining, realistic acceptance by non-governmental organisations (NGOs) that everything supporting our current way of life comes from Mother Earth, and responsible and fair treatment of local communities (systematic information from day one, strengthening community partnerships, granting offset benefits, etc.). Thus, BULGCOLD Inc. (TSXV: ZLTO) and its subsidiary, Stredne Slovensko s.r.o., which explores for metals in Bulgaria and Slovakia, are committed to having the Social License to Operate at the heart of their sustainable operations to alleviate the NIMBY effect.

1. Introduction

There are many reasons why the pressure for more primary raw materials is already increasing significantly: the growth of the world population, the digitalisation, the electrification of vehicles, the growing demand from developing countries, the urgency of climate action, etc. All of the above productive sectors will use metals, minerals and materials, applying them to technologies and products with low greenhouse gas emissions.

The Organisation for Economic Co-operation and Development (OECD) predicts that the global demand for materials will more than double from 79 billion tons in 2011 to 167 billion tons in 2060 (Figure 1).

In the European region, where the European Commission (EC) has set the target of zero emissions by 2050, approximately 35% more Cu and Al will be needed than is currently consumed. The demand for Co and Ni could rise by 330% and 100%, while the exploitation of Li and rare-earth elements (REEs) is expected to rise by 35 and 26 times, respectively (Figure 2).

2. The EU Critical Raw Materials Act

Critical Raw Materials (CRMs) are non-energy resources that have been assessed by the EC mainly on the basis of their economic importance and supply risk. CMRs are often mined and used in relatively small quantities but have specific characteristics that make them essential components for products in strategic sectors, such as renewable energy, digital technology, aerospace, and defense.

The President of the European Commission, Ursula von der Leyen, announcing the Critical Raw Materials Act, on 16 March 2023, stressed that “Without critical raw materials there is no green transition and no digital transition. The Critical Raw Materials Act will improve Europe’s refining, processing, and recycling of raw materials. And it will create a Critical Raw Materials Club with reliable partners to diversify supply” [3].

Access to environmentally friendly and economically sustainable recycling will also be crucial. More than 50% of metals, such as iron, zinc, and platinum, are recycled and account for more than 25% of the consumption needs in the EU. As far as CRMs are concerned, the recovery rate from secondary sources is below 1%, and therefore it contributes little to meeting the rapidly growing demand. Even if recycling was to become more efficient by 2050, it could not by itself close the large gap that currently exists between the future demand and supply of CRMs.

3. The Leading Role and Challenges of the Mining Industry

The above changes have put mining companies in a difficult position. On the one hand, they have to mobilise investors who prefer to invest in companies much less exposed to risks, for example, producers of up-to-date electric cars, and on the other hand, they have to deal with the global concern around “Not in My Backyard” or NIMBY and its effect.

Responsible mining companies may have succeeded in meeting most of the ICMM mining principles [4], but the extractive industry needs to improve its overall negative reputation. Quite often, digging out leaves behind a harmful environmental footprint. Sites in which the environment is not responsibly managed and rehabilitated often resemble battered landscapes with large holes in the ground, residues of processing plants, waste dams, and tailings ponds. The good news is that there are now many examples where reforestation has changed the post-mining image of the mining site (Figure 3).

Consequently, there is an urgent need to further change the image of the extractive industry. Only this will attract investors who focus on environmental, social, and good governance issues. Immediate actions by all parties involved are necessary to avoid a raw materials crisis that threatens the energy transition and the progress of humanity. Now, there is an opportunity to create a positive public perception of the exploitation of mineral deposits that can support the technological applications of the new energy model.

4. Obtaining the Social License to Operate (SLO) Works

The Social Licence to Operate (SLO) has become the leading concept for assessing the legitimacy of mining activities. Nevertheless, there is no regulatory body to grant the SLO to mining and exploration companies. Furthermore, in a world that increasingly lives online, communities extend far beyond local or geographic project boundaries.

Also, there are no clear guidelines on how a mining or exploration company should proceed to obtain the SLO. The views that follow on how the SLO could work effectively and holistically are not based on the literature and theoretical approaches. They constitute the conclusions of positive and negative lessons derived from various senior managerial positions, as well as from different cultural and social environments in Europe and Asia. In essence, they are based on professional experience from 17 countries.

❖

Understanding local communities at a very early stage of a project could lead to trust and sincere relationships.

❖

Respecting communities by listening to them and providing solutions to their concerns is productive.

❖

Providing reliable information can mitigate the fear that NGOs and/or politicians spread.

❖

Keeping promises to communities should include, among others, offset benefits for all parties involved.

❖

Using the best available technologies in mining, processing, and rehabilitation could reduce environmental impacts drastically.

❖

Assessing the wider environmental effects, rather than just the local ones, is necessary.

❖

Undertaking the restoration of the damaged landscape and empowering local communities to re-use the land are necessary.

❖

Working with policymakers without interfering in local political parties’ issues is necessary.

❖

Tackling xenophobia specifically in countries with current or former totalistic regimes is also necessary.

5. The Red River That Carries EUR into Cuenca Minera

The Rio Tinto River has a unique red color derived from its chemistry, which is extremely acidic and has very high levels of Fe and base metals (Figure 4).

Such a picture frequently presents a big opportunity for NGO environmentalists to spread fear in the region. For the inhabitants of Cuenca Minera (the Valley of Mines) in Andalusia, the Red River represents an income of a few million euros per year for their communities from tourism, due to the area’s special natural features and its mining heritage. According to statistics, the Rio Tinto Mining Park receives an average of 100,000 tourists per year, as well as hundreds of scientists (including those from NASA).

Likewise, due to current mining, local communities have the opportunity to prosper because of the economic revenues resulting from the operation (the creation of direct and indirect employment opportunities, offset benefits, etc.). This is why, in the historical zone of Cuenca Minera, mining is enthusiastically supported by the local residents.

6. The Foundation Model

Since the restart of operations at the RioTinto mine in 2016, the creation of the Atalaya Mining-Rio Tinto Foundation has represented the start of a partnership that continues to be uninterrupted to date. The foundation is funded by Atalaya Mining, which is the responsible body that communicates with the communities and works to understand their needs.

The platform supports municipalities, charities, NGOs, associations, and individuals who promote actions that have a positive impact on communities. The actions relate to infrastructure, education, environment, sport, and the economic diversification of the cities, including the financial support of local SMEs. In a recent discussion with the company’s Public Relations Manager, Jesús Caballos, he informed us that “The Foundation grants an average of 700,000 euros annually for local projects. So far more than 30,000 people have benefited”.

Atalaya Mining encourages the hiring of personnel from neighboring towns, averaging 68% of the workforce. It also has agreements with the municipalities and the mine’s main contractors to extend this policy to those companies conducting business with the operations.

Moreover, full-day visits to the mine are organized for local schools at all levels, so that pupils, students, etc., can learn about the history of the current mining activities. Likewise, the company’s premises and facilities are available to Andalusian universities for undergraduate and doctoral studies in the fields of geology and mining, as well as for the celebration of Saint Barbara’s (Patron of miners) day.

This is a paradigm that I personally would like to apply, where I have a say and a voice in decisions.

7. It Is in Everyone’s Interest

As difficult as the SLO equation is, ultimately, communities, the mining industry, and government have many common goals.

• It is in everyone’s interest for a mining company to be profitable, so that it can create wealth for its shareholders, employees, the communities, and the country in which it operates.
• It is in everyone’s interest to minimise conflicts, have a collaborative relationship, and achieve stability for the business, the communities, and the government. A mine must earn over a long period, as it takes a lot of time to properly explore and exploit a resource, for investors to obtain a return on their investment, to create a sustainable secondary economy around the mine, and to contribute to government revenues. The government and the community are important contributors to mining as they facilitate the infrastructure, an investor-friendly regulatory environment, and the workforce, skills, services, and products from the local communities.
• It is in everyone’s interest to minimise environmental damage. Communities want to continue their traditional land use practices, or they want to attract tourism to the area, and most importantly, they want to live in a pollution-free environment. Mining companies want to protect the environment, keep communities happy and have a healthy workforce, so that they can be financed by banks and stock exchanges, and so that they can minimize the cost of rehabilitation and the closure of mining sites.

8. Conclusions

It is obvious that joint efforts are required by the mining industry and society as well as the main technological, social, political and legal actors relating to the process of SLO. If trust is developed between the involved stakeholders, the SLO may prove an important tool in future mining in order to safeguard the increased supply of raw materials, minimize the environmental impacts, and contribute to the improvement of life, but also of the earnings of the affected regions.

In other words, the SLO means creating the right equation that is beneficial to all stakeholders (Figure 5).

This is how we can alleviate the NIMBY effect!