ESG, decarbonization top LatAm mining agenda

Optimization and ESG practices, as well as community relations and adherence to decarbonization commitments, are the top priorities in Latin America’s mining sector, according to BNamericas' 2023 mining survey, carried out in collaboration with Deloitte and Peru's institute of mining engineers.

The results of the survey were presented at a webinar and the report, Mining Survey 2023: ESG and Optimization at the Forefront, can be accessed here.

According to the report, 61% of the executives surveyed said their company will allocate more funds to decarbonization in the next 12 months, compared with 37% in the survey two years ago.

Decarbonization "will help the industry to be sustainable, obtain loans and financing with better conditions, and access regions and areas that today oppose projects due to issues of pollution and dust emissions," Alberto Coya, Latin America head of Canadian environmental engineering firm Stantec, told the webinar.

“The first step is to identify the carbon footprint in order to reduce it,” he said. All stakeholders must participate in the mission, integrating companies, suppliers, consultants, contractors and localities, which “will change the mining market for the next few years,” Coya added.

Moreover, “everything that has to do with decarbonization contributes to reducing costs and is linked to optimization and how better results and benefits are achieved around the operation,” said the senior manager of Deloitte’s energy, resources & industrials area, Cristina Jara.

"A project that is not accompanied by solar panels and seawater [desalination] is impossible to be approved," said Alvaro Fuentes, the Chile manager of Polish miner KGHM.

Fuentes also emphasized the importance of involving communities from the beginning of any project.

Some 55% of respondents said their companies will increase spending on digital transformation next year, with 12% saying that spending will increase significantly. The figures show that executives deem digital transformation key to optimizing processes and reducing pollution.

The biggest threats are political and legal uncertainty, according to 59% of respondents. Although the risk of resource nationalization was perceived as lower, combined the items worry 70% of the respondents.

Chile emerged as the preferred mining investment jurisdiction, favored by 39%, partly thanks to a decrease in uncertainty after the mining royalty was defined. Peru was second with 17% and Brazil third with 16%.

Over 50% of respondents said they would increase capex and investment next year because market conditions will improve, although the amounts will be lower than in previous years and projects could take longer.