Digging Deeper: Water Risks Threatening the Mining Industry

The Samarco tailings dam failure, the community opposition to Newmont Mining’s Conga project and Southern Copper’s Tia Maria projects in Peru, and the issue of declining water supplies in Chile have highlighted the importance of water related risks in the mining sector. Several trends suggest that water (intake and discharge) will increasingly become a primary risk in mining investments:

  • More waste must be securely stored as falling grades require more ore to be processed.
  • Mining regions are experiencing increasing droughts and floods.
  • Local communities, aided by social media, are increasingly scrutinizing and opposing mining projects.

It is therefore crucial for investors to better understand these risks, measure them, and promote improved water management. 

 

This event provided an overview of water-related mining risks across regions and the physical, social, regulatory, and reputational risks they represent to companies and investors. We examined reasons for increasing water risks and how they can be measured, monitored, and ultimately better managed.

Participants: 

Sam Block, MSCI ESG Research
Bonnie Gestring, Earthworks
Ross Hamilton, International Council on Metals and Mining
Upmanu Lall, Columbia University Water Center
Frederick Isleib III, Manulife Asset Management

Host Commitee Members: 

Anahita Arora, Eurasia Group
Carla Buffulin, AIG Investments
Katrina Butt, Alliance Bernstein
Ken Colangelo, Alliance Bernstein
Valeria Cisnero, American Century Investments
Chris Davis, Investor Network on Climate Risk
Amelie Derosne, Societe Generale
Eric Fine, Van Eck
Alison Graham, Voltan Capital Management
Marie Riley, MSCI Inc.