Sustainability of Mining Industries Analysis 2022

Running Head: Sustainability of Mining Industries
Sustainability of Mining Industries
Name of the Student
Name of the University
Author Note

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Sustainability of Mining Industries
Table of Content
s
Part A- Critical Analysis................................................................................................2
Introduction...............................................................................................................2
Body..........................................................................................................................2
Conclusion................................................................................................................5
Part B Strategic Initiative..............................................................................................6
Cost Behaviour Patterns...........................................................................................6
Balanced Scorecard..................................................................................................7
Development of proposed strategy...........................................................................8
References...................................................................................................................9
Appendix.....................................................................................................................10

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Sustainability of Mining Industries
Part A- Critical Analysis
Introduction
BHP which was formerly known as BHP Billiton was founded in 1885 is a
trading entity of BHP Group Limited. It is an Anglo- Australian multinational company
dealing with metals, mining and petroleum headquartered in Melbourne, Australia.
BHP has been ranked as the world’s largest mining company as per the market
capitalisation by the year 2017. According to the sustainability report of BHP (BHP
Sustainability Report, 2019), the data provided by them are transparent and
voluntarily provided as per the standards, guidelines and recommendations of
sustainability informed by the external sources. The International Council on Mining
and Metals (ICMM) and the Global Reporting Initiative Standards (GRI) are followed
while preparing the sustainability report. The strategy of BHP is to create the long
term value and high returns with the best of their capabilities, assets and
commodities with the purpose of bringing together the people and resources for
building a better world along with the values of sustainability, integrity, respect,
performance, simplicity and accountability.
Body
The sustainability has been considered as one of the major core values of
BHP. They believe in supporting the communities in which they operate being
environmentally responsible. Therefore, BHP considers health and safety as the
topmost priority. The environmental challenges that BHP faces are considered
complex and unprecedented. It is important to reduce the impacts on the water
resources and the biodiversity with a collective and concerted action and also to curb
the carbon emissions. The responsibilities and actions are taken by BHP for
reducing the emission of greenhouse gas (GHG) and they have succeeded to
maintain the commitment of five year target of emission of greenhouse gas at or
below the levels of FY2017. During the financial year 2019, the emission of
operational greenhouse gas was 3 percent below the targeted baseline. The BHP
group uses the value communities as the parameter for the purpose of measuring
the achievement of environmental and economic sustainability. The success of BHP
depends on the health and prosperous of the global communities. Here also the BHP
has succeeded to maintain the five-year community targets which help in the
maintenance of sustainable development challenges. During the financial year 2019,
the amount of voluntary social investment of BHP amounted to US$ 93.5 million
which was amounted to US$ 77.1 million in the F.Y 2018.It includes US$ 55.7 million
in the direct projects of community development and donations. The group is
committed to not lose sight of the importance to deliver the meaningful gains for the
stakeholders as they are aiming for the long-term value.
There are number of companies in the metal and mining sectors of Australia
which disclose the information of environmental sustainability in the sustainability
reports, annual reports and other web pages of corporate internet (Lee, 2017). It has
been found that the size of the metal and mining companies which are included in
the Australian Securities and Exchange (ASX) influence the quantity as well as the
quality of corporate environmental disclosure. The market capitalization correlates
the quantity and the quality of environmental disclosure positively and significantly
(Lokuwaduge & Heenetigala, 2017). These mining companies are associated with
the extraction of minerals from earth and it consists of opportunities, risks and
challenges to sustainable development. The normative framework of mining is

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Sustainability of Mining Industries
structured with international laws which include human rights standards and laws,
treaties of international investment and other treaties and conventions of
environment. The customary rules which are practised within the country and the
domestic legal framework in mining which consists of laws, constitutions, policies
and regulations are needed to be coherent with the international laws and norms
(Heenetigala, et al., 2015). Generally, the mining contracts are signed with large
investors which are considered as another key element of the normative framework.
In order to examine the quality and depth of environmental as well as social
performance, Rio Tinto has been chosen as the competitor company for BHP and a
comparison is drawn between the two. According to the sustainability report of Rio
Tinto (Rio Tinto Sustainability Report, 2019), the resources that they mine for
producing the minerals often occurs at remote locations with sensitive environment.
They are committed for understanding these environments and try to mitigate the
impacts of the operations on them during the lifecycle of the operations. This also
includes the safeguarding of the lives and livelihood of the local communities who
rely on them. Therefore, for this purpose Rio Tinto has implemented strict
international practices and standards with local and international regulations. Their
environmental standards require to involve the local communities for the purpose of
monitoring the activities and also to share performance with the stakeholders
regularly. They play a positive role in the society where they operate as they plan for
a long term business plan by engaging with the communities in such a way that it
respects their rights, culture, dignity and their way of living. On the other hand, Rio
Tinto has been considered as the first mining company in Australia which is engaged
in forming agreements with indigenous landowners.
A materiality assessment is being conducted by BHP Group each year for the
purpose of identifying the sustainability issues specially those issues which are
critical to the business as well as the stakeholders. The group is also engaged with
the assessment of the impact of their activities on environment, society and the
economy. In order to identify the key issues of concern of the business a wide range
of internal and external sources have been used for consulting with the stakeholders
with the help of investor round tables, surveys and advisory groups have been
reviewed by the group. On the other hand, the sustainability committee helps in the
review of the assessment and thus helps by providing feedback on the key issues.
Therefore, it helps in tracking of the existing issues and identification of the new ones
and the materiality assessment helps in informing of the sustainability strategies and
helps to provide a clear understanding related to the coverage of the key topics
which are in accordance with the Global Reporting Initiative (GRI) principles. The
critical issues which include the climate change, water, dams, tailings have the ability
to impact on the safety, environment as well as the community along with the ability
to operate and grow. During the F.Y 2019, the issue of trust inside the group has
been assessed as a material concern and it helps them to build trust with all the
stakeholders of BHP. Thus, the material issues include the sustainability approach of
the group, health and safety, environment, climate change, society, water, people,
business conduct as well as business ethics and the economic contribution report
(BHP Sustainability Report, 2019).