Conference on Sustainable Mining including Discussion of Draft of the Law on Transparency of Extractive Industries

Ulaanbaatar, 4 June 2013—Mr Ganhuy, Minister of Mining of Mongolia, representatives of government and of the mining industry,

Colleagues, ladies and gentlemen,

Thank you for inviting me to address this meeting—one which in many ways holds the essence of Mongolia’s future.

A country rich in minerals deposits, a country determined to realize a Green Development pathway.

When you speak about mining and you speak of the environment or sustainable development, most people would imagine you would be speaking at cross purposes.

Mining’s historical record in respect to conserving the natural or nature-based wealth of a country—and of upholding social standards—has often been a source of tension and heated debate.

But the reality of the sheer scale of Mongolia’s geological deposits and the potential to lift its people out of poverty cannot be ignored.

The question before this conference is how is this to be done—whether the laws and regulations in place and planned by the government in respect to mining and the wider green economy aims can be supported and embraced by the industry—domestic and international.

It is not just a challenge and an opportunity for Mongolia—the World Bank estimates that around 50 developing countries and economies in transition have minerals able to substantially boost their development profiles if handled sensibly and sensitively.

Ladies and gentlemen,

the world of 2013 is very different from that of the 20th century not least in respect to mining and the mining industry.

The soaring demand for minerals is clear but so is increasingly societal pressure on mining companies to get it right.

Reputational risk has become a feature of the market-place in a world where aware consumers are not just in North America, Japan and Europe.

But growing in numbers and geographical spread every day.

It is not just reputational risk that is motivating responsibility among miners.

We live in a world defined by rising resource scarcities including water. Water is a limiting factor and shortages are a disruption to any mining operation.

Whether in the Gobi desert or the savannahs of South Africa, managing the nature-based assets that support good water supplies—from forests, to wetlands and freshwater systems—must be in the industry’s best interests.

The environmental community including UNEP has worked with the mining industry for many years to establish better and more robust pathways towards sustainable mining.

The International Council of Mining and Metals (ICMM) and its companies have made a clear commitment to sustainability reporting under the Global Reporting Initiative (GRI).

At the Rio+20 Summit last June, several countries including Brazil, Denmark, France and South Africa pledged to work towards even higher standards and more widespread up take of corporate sustainability reporting.

UNEP and the GRI are supporting this initiative and new standards are expected shortly.

The mining industry is also coming under increasing scrutiny from financial institutions in respect to its footprint on ecosystems and biodiversity.

And some are responding—The Economics of Ecosystems and Biodiversity, hosted by UNEP and established by the G8 group of environment ministers supported by many developing ones—noted at least one large multinational mining company which has adopted the principle of Net Positive Impact on biodiversity.

In association with leading conservation experts the company has developed new ways of assessing the biodiversity values of its land holdings, and has begun to apply biodiversity compensation or 'offset' methodologies in Madagascar, Australia and North America.

UNEP, through its hosting of the International Resource Panel, is also poised to work with the sector to promote sustainability in the management of mining and metals.

This is aimed at reducing the ecological footprint of the industry and the products along the supply chain—an important consideration given that there has been a shift over the past half century or so from metals being in mines underground to substantial supplies ‘above ground’.

An important consideration when many high tech, clean energy products like hybrid car batteries and wind turbine magnets rely on rare earth metals—few of which are today recycled.

Mongolia’s existing and evolving mining laws will be crucial to the success and sustainability of mining here—one challenge globally are the number of new players in the market who may have emerged without engaging in responsible mining initiatives.

The fragile lands, water scarcities, vulnerability of migratory species like wild asses and antelope to barriers linked with mining and climbing average temperatures in Mongolia require and request a strong cooperative spirit between the mining industry and the people here.

If Mongolia and the industry can get it right, it offers to transform what has often been described as a resource curse into a resource blessing and represents an opportunity for the industry in all its facets to demonstrate to the world its commitment to a sustainable future.