Comparison of Mining Projects

This paper analyzes the selected mining projects of Australia from the companies such as BHP Billiton and Rio Tinto along with evaluating their project investment and market capitalization. It explores the ways in which mining organizations differ or have similarities in their mining initiatives regarding community relations. The paper also analyzes the major issues between the selected companies and their host communities in order to evaluate the ways in which these companies structure their community relations effort.

Running head: COMPARISION OF MINING PROJECTS
Comparison of Mining Projects
Name of the University:
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Authors Note:

1COMPARISION OF MINING PROJECTS
Introduction
In ensuring better comparison of mining projects, it is necessary to explore the ways in
which mining organizations differ or have similarities in their mining initiatives regarding
community relations (Aguilar-Støen & Hirsch, 2015). This is deemed to encompass analyzing
internal management structures of the selected Australian mining organizations. The objective of
this paper is to analyze the selected mining projects of Australia from the companies such as
BHP Billiton and Rio Tinto along with evaluating their project investment and market
capitalization. The paper is also intended to analyze the major issues between the selected
companies and their host communities in order to evaluate the ways in which these companies
structure their community relations effort.
Discussion
Mining Projects Description
The mining project developed by BHP Billiton is “London mining network” that focused
on carrying out mining operations in Escondida copper mines in the Atacama Desert of Northern
Chile and make considerable developments in the community. The company has also planned to
expand its desalination operations within the coast along with piping water within these mines.
The size or market capitalization of BHP Billiton is observed to be 44.1 billion U.S. dollars for
the year 2018 (Bhp Annual Reporting., 2018). The company is positioned as the largest
Australian mining company listed in Australian Stock Exchange and its market capitalization is
high in comparison to its competitors. Such strong position of the company is deemed to be

2COMPARISION OF MINING PROJECTS
suitable to support the mining project of the company along with its community development
activities.
The mining project implemented by Rio Tinto is “Oyu Tolgoi Gold and Copper Mining”
and the investment within the project is observed to be US $4.4 billion that has supported
construction of more than 200 kms tunnels (Rio Tinto., 2017). Moreover, market capitalization
or the size of Rio Tinto is 83.94B in the year 2018 attaining 32.2% of its size that is observed to
support the investment within this mining project. The mining project of this company has
contributed towards increased Mongolian development through carrying out ore mining from
surface employing open pit mining. Moreover, this mining project was selected by Rio Tinto for
the reason that Oyu Tolgoi serves among the most exciting developments in gold and copper
mining over several years. This encompasses reserves along with resources which makes it
among the world’s renowned copper and gold deposits (Conde, 2017). Moreover the
shareholders of Oyu Tolgoi including Rio Tinto, Turquoise Hill Resources and the Mongolian
government developed a plan for carrying out underground development of the community.
Description of Host Communities
The host community that is being served by BHP Billiton through its mining project is
local community around the Atacama Desert of Northern Chile. This community served by the
mining company is observed to survive within a region that faces a threat of survival settlements
due to scarcity of water in the region (Conde & Le Billon, 2017). The community residing within
this region is observed to be indigenous people from Atacama Desert and they remain in
underdeveloped villages with lack of modern facilities and protect their villages with strong
stone walls. To maintain their livelihood they rely on their developed ceramic crafts, copper

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work and gold work. They are also observed to be skilled at making best use of scarce water
along with sparse terrain through employing their livestock and depend their lives mostly on
agriculture (Fordham & Robinson, 2018).
Local community around Southern Gobi desert of Mongolia is the host community for
Rio Tinto that is considered within the mining project of the company. The community of South
Gobi is observed to be huge and sparsely populated region in which for more than several years
residents have relied their lives on animal husbandry and nomadic herding (Keenan, Kemp &
Ramsay, 2016). The mining developments are greatly needed in this region that can bring this
community with an opportunity to support sustainable development, offering new growth
opportunities along with offering strategies to diversify local economy. The region is observed to
be one of the most water efficient mines that use 0.44 cubic meters of water per tone of
processed ore and for this reason the biodiversity in these areas is observed to be very rich.
Despite the harsh climate conditions in these areas, it is observed to support and sustain animals
and people residing within the community (Lin, Li & Bu, 2015). The region has long history of
human habituation focused on which it can be said that the community residing within the region
needs increased development.
Relationship between Company and Host Communities
The analysis of relationship between BHP Billion and the community served by the
company revealed that there have been certain issues faced by the community residing in Chile
region. This is because of the reason that the mining project of the company decided to draw
huge amount of groundwater from regions near the mine (Moffat & Zhang, 2014). This proposal
was opposed and turned down by the local community as they felt endangered regarding their

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survival and farms settlement in case the scare water was diverted in the mines of BHP Billiton.
Moreover, another issue that affected the relationship between the local community and the
company is that people in Salta were concerned regarding their water diversion and opposed to
such plan of the company. Moreover, the community did not support the mining project of the
company as the community was drastically affected by the proximity of the mine resulting in
collective relocation of community consent (Owen & Kemp, 2015).
On the other hand, the relationship between Rio Tinto and the local communities serviced
by the company is observed to deal with certain concerns in ensuring success of its mining
project and community development programs. This is because of the reason that the community
residing within the Southern Gobi desert of Mongolia has opposed the mining project of the
company has it has been involved in two major uranium spills that has affected the natural
habitat of the community (St-Laurent & Le Billon, 2015). Moreover, the community has also
faced issues regarding increased work noise levels of Rio Tinto has caused hearing loss to people
residing in the region and has also affected the employee community relationship in this mining
project.
Community Projects Description Implemented by Companies
Community projects implementation by BHP Billiton and host communities involvement:
 The sustainable community LEAD project was developed by the company as a new
agricultural development initiative that is deemed to benefit small benefit smallholder
farmers in Chile region (Suopajärvi et al., 2016). The community got positively involve
in this project of BHP Billiton as they attained the opportunity of improving their

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production ability through obtaining shared skills and knowledge in improving their
livelihood.
 The dream field’s community development project of the company was committed to
encourage and develop soccer playing skills among children of the region that was
focused on inspiring positive changes along young individuals (Wirth, Kulczycka,
Hausner & Koński, 2016). This community development project also considered building
schools that attained great participation from the community members. The people in the
community have strong focus on promoting education f their children for enhancing their
lifestyle.
Community projects implementation by Rio Tinto and host communities involvement:
 The company has developed “Royal flying doctor service” sustainable community
development project for the community residing in Southern Gobi desert of Mongolia.
This program has intended to offer flying intensive care unit that can offer emergency
support to people in case of any medical emergency in the desert region. This initiative
has attained increased support from the community with attaining non-government
contribution of an$11 million in his community development plan implementation
(Zhang & Moffat, 2015). Attaining emergency medical assistance at the time of serious
injury is highly appreciated by the local people.
 “Rio Tinto Gove Operations Community investment” is focused on making a positive
contribution within the community that has considered ensuring regional economic
development approaches along with biodiversity conservation initiatives (Zhang &
Moffat, 2015). The community supported such program of the company as they consider
such initiative to promote their sustainability.

6COMPARISION OF MINING PROJECTS
Structure of Companies Community Relations Effort
The figure below explains the level in which Rio Tinto structure all its community
relations. It also explains the staff levels involved in its community development responsibilities
along with the role of the community relations team. The company relations policy in
maintaining community relations is observed to include “Communities and social performance
standard (CSP)” that includes necessary standards in monitoring and dealing with its everyday
impacts on community through managing social risks and entering into long term community
development agreements. Moreover, the board of directors of the company has an increased role
in ensuring sustainability development of the communities served by them (Wirth, Kulczycka,
Hausner & Koński, 2016). The board of directors ensure that the company’s community
development initiatives re focused on economic developments in all its mining projects and
allocates necessary finds for such development initiatives.

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Figure 1: Community Development Management Structure of Rio Tinto
(Source: Walter & Urkidi, 2017)
The figure below explains the level in which BHP Billiton structures all its community
relations. It also explains the staff levels involved in its community development responsibilities
along with the role of the community relations team. The company relations policy in
maintaining community relations is observed to include “Indigenous people policy statement” in
which the company focuses on undertaking participatory social and environmental impact
evaluations and maintaining physical, cultural and economic well-being of community served by
BHP Billiton. Moreover, the board of directors of the company has an increased role in ensuring
sustainability development of the communities served by them (Wirth, Kulczycka, Hausner &
Koński, 2016). The board of directors of the company supports its community development
initiatives through appointing management levels for ensuring all community development
responsibilities such as safety, health, human rights, environment protection and community
relations.

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Figure 2: Community Development Management Structure of BHP Billiton
(Source: Wirth, Kulczycka, Hausner & Koński, 2016)
Company Report on Community Relations Activities
The community relation activities of both the companies Rio Tinto and BHP Billiton is
reported in their published sustainability report. The external advisory panel of Rio Tinto is
observed to include “international development economist Keith Bezanson, primatologist and
conservationist Alison Jolly, environmental economist and Director of Conservation
International in Madagascar Léon Rajaobelina” (Wirth, Kulczycka, Hausner & Koński, 2016).
The external advisory panel of BHP Billiton is observed to include “Globe; Ethics Panel’ that

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acts as an advisory body with having internal and external membership and advises business
leaders of the company on following guidelines to business conduct.
The sustainability report of BHP Billiton has sections of its community relation activities
and development initiatives that are segmented into people, health and safety, communities,
environment and climate change. The sustainability report of the company has elaborated on all
their sustainable development contributions (Walter & Urkidi, 2017). The report also explains
the ways in which its community relationship approaches are focused on better use of energy and
decreasing climate change impacts towards developing a low-carbon future. In maintaining
better community relations, the sustainability report of the company explains all its approaches
towards local employment commitments that can be managed often through directly negotiated
agreements. On the other hand, the sustainability report of Rio Tinto includes sections such as
reporting on community relation activities matters, community relationships, environment
protection, governance integrity, value chain, sustainability fundamentals, performance data and
global reporting initiative index (Tarras-Wahlberg, 2014). The sustainability report of the
company covers community relation development initiatives that can ensure community people
to maintain social harmony and have better living standard that ensures human rights risks and
legacy management.
Conclusion
The objective of this paper was to analyze the selected mining projects of Australia from
the companies such as BHP Billiton and Rio Tinto along with evaluating their project investment
and market capitalization. It was gathered from this assignment that the relationship between
BHP Billion and the community served by the company revealed that there has been certain

10COMPARISION OF MINING PROJECTS
issues faced by the community residing in Chile region. Moreover, the community got positively
involve in community development projects developed by BHP Billiton and Rio Tinto as they
attained the opportunity of improving their production ability through obtaining shared skills and
knowledge in improving their livelihood.

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