Dividends and A watershed moment in sustainable mining

For most of us, the words of sustainability and mining do not go together because the process of mining is to move great amounts of earth to find the small amount of minerals buried underneath the earth. Depending on the mineral, it can involve using cyanide to separate the rocks; most process also involve water to help separate the earth and the minerals which are embedded in the earth.

One method to examine how mining is getting more sustainable is examining the methods they use water. Of the 54 industry groups classified under the Thomson Reuters Business Classification scheme, only utilities use more water than metals and mining. With this knowledge, Hugh Smith of Refinitiv’s ESG asked how are the global miners using water?

His criteria was:

How dependent are companies are on water withdrawal through the number of cubic meters withdrawn per million US dollars in revenue. The average is 33,400, in order to look for the best started with 10,000 cubic meters.

What proportion of the use of water is freshwater? Trying not to compete against local populations and agriculture, the ideal was no more than 75% fresh water sources.

Most of us practice the 3Rs of recycling at home, how well does a mining companies recycle or reuse their water? Mr. Smith was beginning at 70%

Company Mkt Cap Water (M3/Rev) Fresh Water 1 Yr Div

$ bil (US$ Mil) Water% Reused RTN% Yield %

United Co. Rusal 6.703 3,439 28 389 52.0 4.0

Agnico Eagle M 14.348 8,858 32 71 69. 3 1.1

BHP Group 120.668 8,015 51 77 25.3 6.1

Polymetal Inter 6.983 6,508 60 255 54.9 5.3

Anglo American 22.802 4,700 75 106 173.2 3.0

Plantinum

Linking to dividend paying stocks, for a long time in the mining industry, it was felt you had to have one or the other. Be for the earth and leave the minerals in the group or take the minerals out of the ground. As sustainability brings more metrics to the equations, we can now examine who does and does not recycle better? and ask at the shareholders meetings why not this company, if BHP can do it why not you? The sustainability index should allow the better miners to meet evolving government regulations, because they can and make a profit doing it. That is good news and that can help everyone live better lives.

In the article it said, Aluminium maker United Company of Rusal recently became the first Russian borrower to sign a sustainability-linked loan. The financing, where the amount of interest paid on the loan is tied to sustainability targets. The bonds drew a high level of interest despite the company based in Russia with its different standards of governance levels. However it is a good start.

There are more questions than answers, till the next time – to raising questions.

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