The Cost of Rio Tinto Profits
Investors must pay attention to the mining sector’s negative social and environmental impacts, argues Julio Castor Achmadi, Communities Associate at Accountability Counsel.
As efforts to address climate change move forward at breakneck speed, there’s no denying it’s a profitable time to be in the critical minerals business. Yet ironically, critical mineral mines have continuously brought destruction to both people and the environment. This is in direct opposition of the climate goals driving the sector’s growth.
The reality is that mining for lithium, copper, cobalt, and nickel – which are deemed essential to produce green technologies like electric vehicles and solar panels – could increase fourfold by 2030. Rio Tinto, the world’s second largest mining and metals company, has been one major beneficiary of this push, last year bringing in over US$53 billion in revenue.
The mining sector’s investors, though, should not be celebrating. These profits have come at the expense of an extremely problematic pattern: its mines have repeatedly caused water contamination issues in the local ecosystems that surround them. Yet one of the main underlying goals of the critical minerals mining push is to ultimately help the environment. Even worse, Rio Tinto has failed to address these issues with its mines, or even communicate transparently with key stakeholders around them.
The Oyu Tolgoi (OT) copper mine in Mongolia is one prominent example here. Due to a flawed design, the mine’s tailings storage is not water-tight. Now, tailings seepage has left the mine site and contaminated a nearby riverbed, polluting scarce water resources in the Gobi Desert and endangering the health of the local community, including traditional nomadic livestock herders and their animals.
A report released by the mine’s environmental auditors late last year found not only confirmation of tailings seepage in the riverbed, but also that OT’s water monitoring systems were inadequate – which renders it impossible to understand how toxic the seepage is or how far downstream it has travelled.
Relatedly, the report found that OT relies erroneously on total dissolved solids as an indicator of contamination – which is too general a metric, and again results in its inability to provide a clear picture as to the extent of harm that has been caused by the mine.
A similar vein
But sadly, OT is not the only Rio Tinto mine that has resulted in unaddressed harms to the local environment. QIT Madagascar Minerals (QMM), a Rio Tinto subsidiary, runs a mine in Madagascar that has contaminated waterways and lakes used by the local population for drinking, bathing, and more, according to a legal claim recently filed by Leigh Day. Consequently, these bodies of water have seen harmful levels of uranium and lead, posing severe health risks to the community. In fact, the claim states that 58 people living around the mine have elevated lead levels, and the majority of these cases exceed the thresholds at which the World Health Organization recommends clinical and environmental interventions.
In a similar vein to the OT case, Rio Tinto has been brushing aside evidence of clear harm. It has received reports of tailings dam failures as early as 2010, which resulted in significant releases of damaging waste. In one of the more recent instances in 2022, dead fish appeared in the lakes. Yet Rio Tinto has said, without evidence, that there has been no significant change to the water quality and no link between the mine’s activities and the dead fish.
This is just another example of Rio Tinto’s failure to communicate transparently about the impact of its mining projects. Although Rio Tinto has said there is no evidence that water has been contaminated by OT or QMM, it has failed to provide any data to show that to be true. By controlling the release of data about water contamination issues, Rio Tinto is preventing public scrutiny of its operations or impact.
Furthermore, through its actions, Rio Tinto has failed to comply with the Global Industry Standard on Tailings Managements (GISTM), which requires mining companies to ensure safe tailing management is in place to prevent environmental damages – like water contamination – and to meaningfully engage with affected communities. Ironically, these are standards that it actually played a significant role in developing.
In effect, this sends the message that Rio Tinto is not accountable for its failures to local communities – who are the most directly impacted by its mines.
Taking ownership
We need to see swift, decisive, and comprehensive action from Rio Tinto.
First and foremost, it must address unsafe tailing facilities and the resulting water contamination. For instance, the tailings leak at the OT mine in Mongolia has developed because the mine failed to meet its own design performance target. This failure has allowed 4,000 tonnes per day of extra liquid to collect and saturate the tailings since 2013, making a leak through the permeable clay liner of the tailings dam all the more likely.
Rio Tinto should conduct an honest evaluation of whether – at a fundamental level – it can actually achieve its own safety standards in its tailings facilities. It should also ensure rigorous attention to safety, health and environmental protection, even when that means choosing a more expensive design option.
To address the water contamination that has already occurred, it should conduct an independent and comprehensive water review for both projects, assessing the health impacts to local communities, animals, and plants.
Of equal importance, Rio Tinto must develop a concrete plan to meaningfully engage with local communities throughout the project lifecycle, from design to implementation and continual post-implementation monitoring, up to the closure and post-closure phase. Specifically, this means soliciting community input on planned projects and being responsive to their feedback when these projects adversely impact them – acting as quickly as possible to provide a solution.
Dial up the pressure
Some investors are already pressuring Rio Tinto to act. For instance, lenders involved in the OT copper mine are now exercising their right under the loan agreement to call on the mining major to develop a place which addresses its non-compliance with established project standards.
Rio Tinto has now produced a report on remediation of the OT tailing leakage, but it is deemed inadequate by the herders’ community in resolving urgent concerns regarding the impacts on water, animal and community health. We need to see Rio Tinto produce a comprehensive plan and swift action not only for the OT mine, but for the QMM project and others which have perpetuated environmental and social harm to local communities.
More broadly, we also need to see investors taking the time to proactively understand the concerns of impacted groups like herders, through investors’ meetings or other routine gatherings. They should also engage with impacted groups directly to learn more and put pressure on Rio Tinto to remediate the harms they cause.
Another option is for investors to align their values with the impacts of mining projects, through potentially developing a Human Rights Impact Assessment of the projects they invest in, or strengthening their ESG standards.
As critical minerals mining projects race forward, it’s extremely worrisome that one of the largest actors in the space has not only spearheaded mining projects that have caused so much harm, but that it has also refused to take responsibility for its actions.
It’s also far from the only mining company whose actions have resulted in social and environmental harms, and whose actions merit investor and public scrutiny.
Until we see Rio Tinto and its peers take accountability for the impacts of their mining projects and prioritise community safety and well-being moving forward, investors should have no confidence in its long-term plans and vision.
This article was co-authored by Caitlin Daniel, Communities Co-director at the Accountability Counsel.
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