Water management fast become one of the most significant issues facing the mining and metals industry
In 2015, the World Economic Forum ranked water crises as the number one risk facing business and society. By 2030, global water requirements are projected to exceed sustainable water supplies by 40 per cent, placing decision makers under increasing pressure to make tough choices about water allocation that will impact users across the global economy (2030 Water Resources Group, 2012). The implications of those decisions will be felt by many industrial water users – not least the mining and metals sector.
Water is an essential input across the entire mine lifecycle, from extraction, to mineral processing, dust suppression and meeting the needs of workers on site. Without water there simply would be no mining, and yet the industry has been slow in acknowledging the realities of the scarcity of a resource so critical to mining operations, other industry, communities and the natural environment.
Traditionally, water use in the mining and metals industry has been treated as an operational issue – a resource to be managed from ‘inside the fence’, with good practice water management confined to controlling effluent discharges and a focus on water use efficiency. This approach has had to shift, rapidly, as the industry has learnt first-hand that the inadequate consideration of water resources and other users can cause costly delays to projects, cancellation of water permits, escalating community conflict and significant reputational damage.
In recent years, a growing global population, changing climate, regulatory developments and increasing demand from competing users has placed more pressure on mining companies over their access to and use of water resources. This has resulted in the industry spending increasing amounts on water supply and treatment infrastructure – from desalination plants to water treatment and distribution facilities. In 2014 alone, mining companies are estimated to have spent over US$12 billion on water – an increase of 252 per cent since 2009 (Clark, 2014). But beyond the more immediate input and output costs of water, there are also a range of environmental, social and political risks which can significantly increase the true cost of water for mining operations.
Identifying these risks and developing a deep understanding of local water needs and requirements, including community priorities, and the nature – and science – of local water supplies across the catchment, is therefore an essential part of any effective risk-based approach to water management.
Taking a catchment-based approach to managing water risk requires a holistic view of the social, cultural, environmental and economic value of water. It involves developing an understanding of high-value water assets and the ability to identify and assess current and long-term cumulative impacts of all water user activities within a given catchment.
This is complex territory to navigate and often requires a collective response that goes beyond the operational lines of any one company or water user. To help create a clear and coherent way forward, The International Council of Mining and Metals (ICMM) has developed a Water stewardship framework and practical guidance to support resilient, catchment-based solutions to water management for the industry.
Setting the standard for water stewardship in the industry
In April 2014, ICMM launched its Water stewardship framework with the objective of reducing complexity and promoting a common understanding of the key water challenges in the industry and how these could be addressed.
The framework recognises that water connects mining operations to the surrounding landscape and communities and outlines a holistic approach to water management based on four key imperatives: to engage proactively and inclusively with stakeholders, to be transparent and accountable on water use, to adopt a catchment-based approach to managing water risk, and to deliver effective and efficient water resource management (Figure 1).
The central pillar of the framework rests on the adoption of a catchment-based approach, reflecting the industry’s reorientation of focus – beyond operational water supply to a broader consideration of the needs and priorities of other water users across the entire river basin. It is also this element of the framework that ICMM members identified as the area where the industry most needs to focus its effort in order to improve the way water-related risks are managed.
In response, ICMM has been working closely with our members, external water experts and other sector leaders to develop practical guidance on implementing a catchment-based approach to water management specifically for the mining and metals industry.
Developing guidance on catchment-based water management
There are many water initiatives, standards and guidance documents available to guide water risk management, so why develop another? In speaking with our members, we heard that the plethora of guidelines and approaches was confusing and only added to the complexity in how best to manage water-related risk, and prevented coordinated action.
To address this, ICMM has taken an industry-specific approach, while recognising and incorporating the existing body of work on water stewardship that is already available. Interviewing our members, external water experts and leaders from other sectors, we drew on the collective experience of water challenges and practical solutions that others had implemented, and tailored these to the specific needs and context of the industry.
Once an outline for the guidance had been crafted, the material was workshopped with a cross-functional panel of members in two mining regions in South Africa and Australia. The workshops allowed the guide to be tested and honed, drawing on the skills and experience of community relations staff, risk managers, environmental and hydrological managers and corporate sustainability executives.
The resulting guide offers a tried and tested, systematic and industry-specific approach for identifying, evaluating and responding to catchment-based water risk for the mining and metals industry.
Navigating the guide
ICMM’s Practical guide to catchment-based water management for the mining and metals industry is not intended to be prescriptive, or to be used as an exhaustive technical handbook. Instead, it offers pragmatic information and structured prompts to guide companies in the development of their water strategies and plans in accordance with the local context and hydrology in which mining and metals operations take place. It also aims to complement existing external initiatives and codes, many of which are referenced throughout the document.
The guide is available in English and Spanish and takes the form of an interactive, hyper-linked PDF which allows users to easily navigate between steps and offers quick access to additional information and external guidance referenced in the resource section. A three-phased approach is used to take readers through building awareness (Step 1), conducting an assessment (Step 2) and delivering a response appropriate to the local context and circumstances of the operation (Step 3).
The guidance also provides direction and a set of prompts on the internal and external stakeholder engagement processes required for each step, for example, through highlighting the need for cross-functional input and engagement for water management strategies to be successful.
Hypothetical case studies are used to illustrate how the different steps and processes outlined in the guide could be applied in the context of a real-world mining or metals operation. Case studies from ICMM members are also used in the response section of the guide to illustrate examples of successful shared-use approaches to water stewardship.
Three steps: building awareness, conducting assessments, determining a response
Step one in the guide focuses on building awareness around what is meant by a catchment-based approach to water management. It explores how mining businesses value water, the different types of risks associated with water management across the mine lifecycle and the various approaches that companies are taking towards water stewardship. This step also provides context around catchment management planning and strategies as well as catchment institutional arrangements and what these mean for mining and metals operations.
Step two on assessment takes the reader through a series of prompts which are designed to screen a complex range of issues in the catchment – from assessing the biophysical character and delineation of the catchment to identifying the socio-economic, ecological and regulatory requirements of the area of operation. The section then explores a number of commonly encountered water risks – direct, indirect and catchment based – and illustrates how the aggregate of these risks allows for the prioritisation and identification of key material issues for the operation, both internally and across the entire river basin.
An Excel-based action register has been developed to accompany this section of the guide in which users can note down their answers to the questions and prompts contained in Step 2. In this way, the action register serves as a useful resource to be shared with relevant stakeholders across the business, to inform individual or team actions or to draw on for detailed information when determining an appropriate response to water risk. Once it has been identified that a response is required, companies should critically consider the range of possible options available.
Step 3 of the guide takes users through the process of determining whether water risk can be mitigated through internal action, or if it requires an external response (or a combination of the two). Different types of response options are explored in terms of their value, costs and effort required and the risks inherent in implementing them throughout this section.
Delivering effective water stewardship
While the industry has extensive experience in managing internal water risk, developing partnerships and engaging in multi-stakeholder collaboration to manage external risks is not traditionally part of a mining or metals company’s core competency. This is where the industry needs to focus its efforts, as even the most water-efficient operations that stringently manage water discharges can still be subject to significant water risks manifesting outside the operational fence line at the catchment level.
Effective water management demands collective action underpinned by a mutual understanding of local water issues. This can only be achieved through collaborative partnerships with other actors in the catchment, creating a space for mining and metals companies to build productive relationships with other companies, local communities, NGOs and regulators. These partnerships can help share the burden of mitigating risks, identifying opportunities, increasing stakeholder trust, building workforce satisfaction/retention and reducing operational challenges and costs.
‘Collective action’ may seem a relatively simple concept on paper but the challenge is to deliver this in practice. And it is here where the mining and metals industry is starting to make significant progress in galvanising collaborative partnerships in local watersheds where operations are located.
In Peru, for example, an innovative public–private partnership was initiated between Freeport-McMoRan’s Cerro Verde operation, the local water utility company, local authorities and the central government to ensure access to water for mining, the sustainable delivery of potable water and the treatment of the city’s wastewater.
Following engagement with local, regional and national stakeholders, it was found that treating wastewater for use at the expanded Cerro Verde operations was the best of several alternatives for a long-term source of water for the mine. In response, a wastewater treatment plant is currently being constructed by Cerro Verde which will deliver an annual average of 1 cubic meter per second of treated water to the mine, with any excess treated water returned to the river for the local water utility company to allocate.
As part of this partnership, Cerro Verde have also developed a potable water treatment plant, treating water from the local river to deliver clean drinking water to over 300 000 people in the Arequipa region. In addition, the construction of a water storage and distribution network was undertaken to ensure water resources reach a greater proportion of households in the city.
This broad collaboration has resulted in a triple win: securing the mine’s water supply, delivering potable water to the local population and strengthening the municipality’s capacity to provide essential services. We have seen other similarly successful catchment-based approaches in the Athabasca river basin in Canada and through the Strategic Water Partners Network in South Africa.
To accelerate the adoption of catchment-based, collaborative water management practices in the industry, ICMM has been running regional awareness workshops to disseminate and promote the guidance for use across our members’ operations and more broadly across the entire industry. Over the coming months ICMM will also be working with members to support implementation of the guidance at a site level. The experience of working with member operations to identify, evaluate and respond to catchment-based risks is important to enable shared learning and support others in taking action towards becoming effective stewards of our shared and precious water resources.
Our work on water stewardship forms but one part of ICMM’s role in understanding and responding to society’s changing expectations on environmental and social performance across the mining and metals industry. To access the guide, please visit www.icmm.com/publications/water-management-guide.
2030 Water Resources Group, 2012. Background, Impact and the way forward. [Online] Available from: www3.weforum.org/docs/WEF/WRG_Background_Impact_and_Way_Forward.pdf. [Accessed: 20th May 2015]
Clark P, 2014. A world without water. Financial Times. [Online] 14th July. Available from: www.ft.com/cms/s/2/8e42bdc8-0838-11e4-9afc-00144feab7de.html#slide0 [Accessed 13 May 2015]
Global Water Intelligence, 2011. Water For Mining – Opportunities In Scarcity And Environmental Regulation.
World Economic Forum, 2015. Global Risks 2015. [Online] Available from: http://reports.weforum.org/global-risks-2015/ .[Accessed: 20th May 2015]