Celia Hayes is a geologist by training and has spent her career working in and around the resources sector, starting out in the UK energy industry (oil and gas, offshore wind), before pivoting to mining – first based in operations in Australia and then working around the world with South32.
Now a partner at Deloitte, Celia leads a sustainability and climate change team, based in Western Australia. Her focus is on working with clients to integrate sustainability into business as usual, and in valuing the ecosystems they interact with to create resilient and sustainable businesses that are stewards of natural systems and can thrive in a circular economy (CE).
CE provides a framework for an economy decoupled from finite materials. Will mining become obsolete?
If we stick with the general definition of mining, which is to take stuff out of the ground and produce minerals and metals from it, I will say yes, mining on earth in its current form and definition is finite.
Regardless of circular concepts, there are finite stocks of minerals we can retrieve, so there will be an end to this period at some point (and the timing of this will vary by commodity).
And with this, the real question then becomes more about accessibility.
Tell us more about this …
However, this point is probably still quite far in the future. So, for the moment, if we talk about circularity and transitioning to a different economic framework, mining has an important and critical role to play in providing key materials into the economy.
As technology has evolved, deposits that are more complex or lower grade have become more accessible, and, often, more economical.
At the same time, social and environmental impact has been often considered an inevitable trade-off for access to minerals. However, this is starting to shift, where access to minerals is now being considered a necessary trade-off in preserving the integrity of social and environmental systems – the market value of which is increasingly realised.
This is reflected in extended approval times, rejected mine expansions, loss of social license to operate and resistance against new mining projects.
Access to mineral resources is already being restricted as a result, and this will shorten the lifespan of ‘traditional mining’, though will be very jurisdiction based.
That’s an interesting shift in how we think about mining. Has it taken root in the industry yet?
Yes and no. On the one hand, the global mining industry is coming under ever greater scrutiny in terms of its social and environmental impacts and, as managing externalities has become more costly, some companies are transitioning to internalise these things and to redefine the value of things like social license.
On the other hand, a broad assessment of the mining industry, including artisanal and small-scale mining as well as large industrial mines, suggests that there is still no singular baseline standard for the industry. The general feeling is that the industry still largely underperforms relative to key areas of sustainability, leaving it vulnerable to this shift.
As a result, changing mindsets towards redefining value and looking at future business transition is becoming a matter of survivability for mining companies.
That’s not exactly a surprise …
True. Overall, I think we could say that there is a need for a significant shift in how miners define and consider value.
There’s a lot of potential and opportunity that gets lost through the linear concept of value that’s still predominant in the industry today, which is centred around extracting resources and selling them for the highest possible price.
One way for miners to start this transformation is to adopt the lens of conscious circularity. Can you tell us more about this and how it differs from unconscious or regular circularity?
For the most part, what are called ‘circular’ initiatives tend to focus on resource efficiency, for example, through improved recycling rates, waste reduction, water reuse – generally looking to minimise negative impacts.
With conscious circularity, we shift the focus towards maximising positive impact by looking at how we define and understand value through the entire ecosystem rather than just the mine. Once a mining company makes that shift, it becomes possible to recognise that there are constant flows of value within this ecosystem.
For example, social license given from communities is a flow of value, as is the work of employees at a mine site who come in every day and contribute to a successful operation and, likewise, the jobs provided by the entity.
With respect to nature, there’s an inherent value which must be considered. For example, if there’s a forest around the mine, much of the value lies in its ecosystem services – its ability to regulate the climate, mitigate flood damage, provide food or contribute to pollination.
It’s much the same with water; water used in many cases is not only valuable for mine processing and general operations, but it has an inherent value for everyone who lives around the mine as well. Natural ecosystems, rivers, soil, groundwater, people, existing communities, they all have an intrinsic value.
So, the question becomes: what is the value of each of these components and how will their value be impacted by the mine?
That makes a lot of sense, even though it seems difficult to grasp at first. How companies can start implementing this shift?
Mining is a complex business and we have come a long way in terms of complex thinking in areas like mine design, we’ve just ignored the system around us.
Now it’s about applying this systems approach to circularity, with the same mindset that a geologist brings to a difficult deposit: let’s figure this out, we can do it!
Yes, it’s complicated, but we can do it, and we must.
A good starting point is to look beyond the mine fence and orebody and consider the entire ecosystem of resources the mine is embedded in; that system and all of its components are interconnected. Then we need to ask: what is valuable to other people, not just the mine? And go beyond linear financial value.
Once you look at mineral opportunities through a conscious circular lens, which means looking at the entire ecosystem and the different flows of values, you see opportunities everywhere.
How exciting. What could this look like?
At the site level, mining companies could apply technology to recover more from the rock they extract, including mineralogy often disregarded due to higher costs.
Significant amounts of valuable material still end up in tailings, which is why it makes sense to reconsider them as a resource as well – even if that resource is for someone else. Ideally though, using better modelling, geophysical surveying and bio-leaching technologies to reduce the amount of waste by design would be a more circular model.
Secondly, mining companies can zoom out to the industry level and capitalise on what has already been extracted or impacted, using their skills to mine landfills, old tailings, abandoned mines and extract valuable minerals from those reserves before and while extracting virgin materials. As access constraints become more prevalent, this will create business resilience.
Thirdly, at the economy scale, there are ideas around ‘metals-as-a-service’ (MaaS).
This involves looking beyond extended producer responsibilities where mining companies own minerals or products through the cycle, and rent or lease them until they get retrieved at the end, ideally retaining their original value.
Traceability of minerals, especially once they become compound materials in products, is still a huge challenge, so this is still a vision for the future. But I believe we will get there.
These opportunities are still focused on mineral production. Are there other opportunities for value generation that can arise from a circular paradigm?
Yes, there are. Though generally these are more place-based in nature. For example, in certain surface mining operations in Australia, the land is cleared of vegetation and soil, before operations begin.
In many cases, the landscape is being burnt to prepare for mining, immediately destroying any remaining value in those natural assets, which could be a resource for someone else, another company or the community.
That’s just one example, but this way of thinking could be applied to water, biodiversity, nature preservation, or even community relations.
By asking what the value of these individual systems is or what is of value to them, we can shift our perspective and see new opportunities to act in a way that does not take more than it gives, but rather plays a regenerative role in the system.
That is what we are aiming for.
Is conscious circularity the silver bullet?
Yes! I believe it is the solution, but it’s a systems solution (a far cry from a silver bullet in that sense).
If we started to consider circularity, not as a waste management solution, but for what it really is, we would have a different conversation.
For example, right now, we don’t value water for what it really is: an indispensable resource for all life on the planet. We cannot survive without it.
We just got the notion of value all wrong and that’s the shift that needs to take place. At the very core of it, circularity comes down to knowing how to sustain our own future.
In this way, circularity and circular ways of thinking are not new at all. Indigenous peoples have always had a circular way of seeing the world. They know that everything is interconnected, that we are intrinsically linked with everything else on the planet, and that human life depends upon knowing our place in the greater ecosystem we are embedded in.
BUT this is about profitability too. I believe that moving towards a CE will be inevitable for mining companies in the mid-term as costs associated with impact on nature will increase and, therefore, companies must rethink their business models.
Understanding holistic value under the circular economy lens allows mining companies to better strategise and proactively adapt their business models to avoid liability costs later on.
Those that fail to adopt more circular approaches will be confronted with increasing costs for keeping their social license, paying for emissions, water usage and biodiversity losses.
I think this will accelerate the process of change.
What is your vision for the future and what role do mining companies play in this vision?
It starts with a redefined notion of value within the economy towards one that values natural resources – and this includes mineral resources – very highly.
I believe that while there’s so much still to uncover in circular economy, the most important thing is that we get a critical mass of people to understand what CE really means. This will greatly accelerate change.
With respect to miners, in my view, they have a lot of the skills and knowledge that can enable them to affect change at scale. They’re an important knowledge holder and can become important change makers once they understand their redefined value proposition as material solutions providers.
In my vision for the future, miners play a key role in enabling the shift with the knowledge and resources they already have and by adopting a consciously circular mindset.
I am convinced that understanding how the role of mining is changing will leverage and accelerate change, and greatly improve the future value proposition and thus survivability of mining companies.