Managing for Sustainability in Australian Mining Sector: A Case Study of BHP Billiton

Running head: MANAGING FOR SUSTAINABILITY
Managing for Sustainability
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MANAGING FOR SUSTAINABILITY
Introduction
Sustainable Development is to maintain present resources without compromising the ability
to meet the standards that can be used for the future generations and the environment. The
term itself possess principles to achieve sustainable development starting from
intergenerational equity to intra-generational equity while maintaining ecological integrity
with the stakeholders and wider community (Tietenberg & Lewis, 2016). Sustainable
development in mining sector highlights the different activities like extracting, producing,
transporting, disposal, reusing and recycling of mineral and metal products in the most viable,
efficient and environmentally responsible manner (Gorman & Dzombak, 2018). The best
practices are been used to consider the values in government and corporate decision making,
enhancing the quality of life and further participation and involvement of stakeholders
towards their safety and guidance on decision making (Epstein, 2018).
Australian Mining Sector and Sustainable Development
When the focus spurs on Australia’s mining sector, the companies have not only responded to
the environmental movement but has even improved the mine site containment and
reintegration against undesirable discharges. However, due to certain changes in divestments
of non-core assets have increased the sustainability risk related to portfolio, regulation and
mine life cycle (de los Reyes, 2017). The detriment of sustainability is also because of small
mining firms are less focused than the big mining houses (Owen & Kemp, 2015).
On the contrary, in earlier days the sustainability and operative efficiency were viewed as
different subjects but since, sustainability can bring down progressive governments for their
remote link with operational performance; mining executives have changed their view and
understood that it can be worked on both short and long term benefits (Bice, 2014). Leading
mine owners have been developing plans on protecting the environment with interest of the

MANAGING FOR SUSTAINABILITY
people while focusing on mine’s life cycle (Corder, 2017). Basically, to focus on three
aspects of sustainability issues – economic, social and environmental.
Figure 1: Three aspects of Sustainability
Source: (atkearney.com.au., 2016)
The significance of choosing mining sector is because contribution to Gross Domestic
Product (GDP) has been 8.5% in 2015 and contributes to 2% of the workforce as it is majorly
a capital intensive sector. Also, because of low population density area, Australia has an
advantage in geological endowment with mineral resources making it favourable for long
term sustainability.
Significance of choosing BHP Billiton
In mining sector, company like BHP Billiton can help in analysing the sustainability on its 3
aspects. This company is world wide known for its diversified natural resources whether its
in the sector of oil or gas or major commodities like iron ore, energy coal, aluminium, copper
and so on (bhp.com, 208). Nevertheless, being significant in the field of energy of being an
exporter, producer or the consumer, the company aims to reduce carbon emission rate with
waster usage, and wishes to commit to communities with the principle of health and safety

MANAGING FOR SUSTAINABILITY
and in an environmentally viable manner but still cannot overlook the risk in climate change
(unglobalcompact.org.au., 2016)
Sustainability Challenges
Integration of environmental and economic activity with social concerns is one of the grave
issues. The main area of BHP Billiton’s issue is with the environmental juncture where the
issue is related to “great acceleration” with “weak sustainability” such as natural capital can
be substituted for human capital where prevalence of risk and uncertainty makes it a
persuasive case such as employment and cheap energy can be outweighed by environmental
concerns (Tost et al., 2018). On the other hand, with weak sustainability, climatic issue as
carbon di oxide and global emissions are still rising and are at levels that were not seen in last
800,000 years (IPCC, 2013).
Economically, BHP has been showing an upward trend in terms of revenue streams, asset
wealth, long terms economic investments, taxation and employment. On a whole, there has
been dispersion earned in terms of communities with approved investments and employment
in long run in relation to expanding business activity (Lodhia & Martin, 2014). On the supply
side of the market, BHP may face issue, role in oil and gas and copper market might face
high costs in the exploration process leading to more costly supply, high taxation regimes as
per different countries, long run in gap of demand with anomaly of not reaching its peak in
investment with offshore capacities would be hitting the offshore capacity (Balhuizen, 2018).
Further to this, tax regimes is even linked to the investment nature as range of different
factors comply to the scenario and all necessary obligation to provide returns to stakeholders
(Mackenzie, 2015). The transparency disclosure can be one issue that needs to be complied
with costly supply, employment opportunities to maintain its longer-term business investment
for economic growth (Hargreaves, 2015).