Ethical Practices in Mining Project Management

'the data reveals that artisanal mining for cobalt is a very hazardous vocation undertaken for basic survival, involving long hours, subsistence wages, and severe health impacts. The data further reveals that within the surveyed respondents, there is a high rate of forced labour and an almost 10% rate of child labour' Rights Lab, University of Nottingham recent report, Blood Batteries, The #humanrights and #environmental impacts of cobalt mining in the Democratic Republic of the Congo demonstrates the continued issues with cobalt mining. '- 36.8% of respondents met the project’s conservative criteria for forced labour - 9.2% of respondents met the project’s conservative criteria for child labour - 27.7% of respondents began working in artisanal mining as a minor - Not a single respondent was a member of a trade union, as none exist - Not a single respondent had a written agreement for their work . For those #supplychain and #procurement professionals who are able to trace cobalt to source there are potential steps to be taken: 1. Ethical and Responsible Sourcing Ensure traceability from artisanal and industrial mining sites in the DRC to final product, especially for cobalt used in EVs and electronics. Demand transparency from suppliers, require disclosure of sourcing practices, human rights due diligence, and environmental impact assessments. Prioritise suppliers who can demonstrate compliance with international labour standards and reject those linked to exploitative practices. 2. Environmental Stewardship Incorporate geospatial and water toxicity data into supplier evaluations to avoid contributing to ecological degradation. Promote circular economy principles such as battery recycling, reuse, and alternative materials to reduce dependence on high-impact cobalt mining. 3. Compliance and Governance Align with UK Modern Slavery Act, ensure supply chain mapping and annual transparency statements reflect risks in high-impact regions like the DRC. Embed environmental, social, and governance standards into tendering and contract management processes. 4. Practical Procurement Measures Use multi-quote and business case procedures to ensure value for money and ethical sourcing, as outlined in UK finance and procurement policies. Establish KPIs related to ethical sourcing, labour conditions, and environmental impact. Anticipate changes from the Procurement Act 2025 and EU Critical Raw Materials Act that may affect sourcing obligations. For the majority of buying organisations or as consumers this is a very difficult area, but as the report recommends Government's could do a lot more to reduce exploitation: 'Strengthen supply chain transparency and due diligence requirements of consumer-facing tech and EV companies with more robust legislation; laws should include strict and severe penalties as opposed to simple reporting requirements, including a potential import ban;'

📣 Earlier in September, the UN released 7 Guiding Principles and 5 Actionable Recommendations to build a future where minerals extracted, processed and manufactured into renewable energy technologies do not create or exacerbate social, environmental and political harm. "The increase in renewable energy has come with significant risks, including environmental degradation, human rights abuses, crime, and conflicts." When thinking of unsustainable critical minerals, Quartz in China, Rare Earth Elements in Myanmar, Cobalt in the DRC, and Nickel in Indonesia spring to mind. Unfortunately the list is much longer. The 7 Guiding Principles: 1️⃣ Human rights must be at the core of all mineral value chains. 2️⃣ The integrity of the planet, its environment and biodiversity must be safeguarded. 3️⃣ Justice and equity must underpin mineral value chains. 4️⃣ Development must be fostered through benefit sharing, value addition and economic diversification. 5️⃣ Investments, finance and trade must be responsible and fair. 6️⃣ Transparency, accountability and anti-corruption measures are necessary to ensure good governance. 7️⃣ Multilateral and international cooperation must underpin global action and promote peace and security. The 5 Actionable Recommendations are centered around: 1️⃣ Accelerating greater benefit-sharing, value addition and economic diversification. 2️⃣ Developing a global traceability, transparency and accountability framework. 3️⃣ Launching a Global Mining Legacy Fund to address derelict, ownerless or abandoned mines, mine closures and rehabilitation. 4️⃣ An initiative to empower artisanal and small-scale miners towards responsibility. 5️⃣ Reaching material efficiency and circularity targets to balance consumptions and production environmental impacts. Flick through the slides to take a deeper dive into what “Principle 1: Human rights must be at the core of all mineral value chains” means.

Compliance does not equal consent. And when we confuse the two, we don’t just trigger protests — we misprice risk. That was the challenge I brought into today’s IMARC Responsible Project Development – Challenges and Rewards session. For too long, traditional NPV models have excluded the financial consequences of delayed approvals, licence revocation, litigation, Indigenous opposition or environmental pushback. This creates artificially inflated project value while burying legitimacy exposure in the footnotes. 🔍 When outrage risk is externalised, legitimacy value at risk (L-VaR) goes unrecognised — until it crystallises as a stranded or impaired asset. This is not a “social issue”. It is a valuation failure. A capital allocation inefficiency. A board-level blind spot. 📍 At IMARC, five very different voices pointed to the same conclusion — legitimacy now sits on the balance sheet: 👤 Stephen Mottram – CFO, Australian Strategic Materials (ASM) Signalled that capital markets increasingly favour projects with clearly priced risk and legitimacy assurance. 👤 Niv Dagan – Managing Director, Peak Asset Management Observed that investor sentiment can collapse overnight once ESG uncertainty becomes conflict or delay. 👤 Jyl Lawton – CEO, Aboriginal Enterprises in Mining, Energy & Exploration (AEMEE) Made clear that Indigenous partnership must be built as shared design and enduring economic presence — not as consultation in exchange for temporary approval. 👤 Dr Stephen Grocott – Group Head Processing & Legacy Management, Newmont Pointed to closure, tailings and legacy liabilities as defining long-term tests of ESG credibility and cost resilience. 👤 Dr Ana Estefanía Carballo – Head of International Programmes, Transparency International Highlighted that as most future minerals sit on Indigenous or sensitive lands, transparency and accountability expectations are intensifying — not slowing. ⚠️ The old sequencing is broken Engineering → Permitting → Engagement → Conflict Management → Rehabilitation ✅ The model that will survive the transition looks like this: Community legitimacy + environmental integrity → Engineering → Valuation (inc. L-VaR) → Permitting → Long-term partnership. ⚡ Faster and cheaper is possible — but only when risk is priced honestly Fast-tracking without legitimacy is a false economy. Fast-tracking with legitimacy creates: ✅ shorter delays ✅ lower litigation probability ✅ reduced reputational drag ✅ stronger investor confidence ✅ more resilient cashflows 📣 The call to action 💬 What happens when we treat legitimacy as a core input to valuation rather than a back-end risk? 📊 How does NPV change when L-VaR is quantified instead of ignored? 🏗️ What acceleration becomes possible when risk is resolved through design rather than challenged in court? The energy transition will happen. A just, investable transition is optional. Only one will scale.