GDP Doesn't Reflect True Impact of Mining
The challenge is to make it both.
No question, the riches are there. A recent report from the Conference Board of Canada touts how mining in the North is expected to nearly double by 2020, both in terms of the value of minerals and metals we retrieve and the number of jobs created.
Mining in the North is expected to grow at a compound annual growth rate of 7.5 per cent, compared to an average of just 2.2 per cent annually for the Canadian economy as a whole.
But Scott Vaughan, federal commissioner of the environment and sustainable development, is worried about what will be sacrificed in the rush to make withdrawals. Environmental oversight is sorely lacking, he concluded in a report tabled this week to Parliament. There are also big information and infrastructure gaps.
“We know that there’s a boom in natural resources,” he said. “I think what we need now, given the gaps, given the problems we found, is a boom in environmental protection.”
In the North, real mining gross domestic product (2002 dollars) was $4.4 billion in 2011, and is expected to grow to $8.5 billion by 2020, according to the conference board.
It’s an impressive figure, but like all values attached to GDP, it’s also misleading. It accounts only for the one-way flow of minerals out of the ground and into marketplace. It ignores any of the health or environmental costs incurred over the next seven years, or the long-term economic implications of emptying yet another resource-filled bank account.
As Natural Capitalism author Paul Hawken said during a speech this week in Toronto, “Our current economic system steals from the future, sells it in the present, and calls it GDP.”
Many of Canada’s major mining companies are, to be fair, making an effort to reduce their environmental footprints. They’ve seen the writing on the wall for more than a decade. With social media acting as a kind of global watchdog, ducking responsibility is becoming riskier business.
Organizations and programs have sprouted up to support efforts, including the Mining Association of Canada’s Toward Sustainable Mining initiative, which established principles for environmental performance, and the Green Mining Initiative, which has a similar mandate but is led by Natural Resources Canada.
Then there’s the relatively new Clean Mining Alliance, which was founded to promote and share information about new clean technologies that can help mining companies operate more efficiently, make less of a mess, and more effectively clean up the messes they do make.
“Notoriously conservative mining companies and their shareholders are starting to realize that the capital expenses of new clean technologies can be offset by reduced operating costs and the potential for new revenues,” according to Dallas Kachan, managing partner of Kachan & Co. and executive director of the alliance.
In his start-of-year outlook for 2013, Kachan predicted there would be a much higher adoption of clean technologies in the mining sector, particularly in areas such as water purification, remediation of tailings, advanced mineral separation and products that reduce the use of water and power.
Of course, simply using renewable energy such as geothermal or storage-backed wind can help lower pollution and carbon emissions at mining sites, which are often so remote that renewables become a more cost-effective option than, say, running dirty diesel generators. It helps, and we need much more of it, but it’s not nearly enough.
What’s also needed, Hawken said during his talk, is a “whole different pallet” of technologies that don’t just reduce the impacts of industrial operations, but fundamentally change how industries operate.
He pointed to the amazing advancements taking place in a new discipline known as biological mining. The idea here is that there are molecules and bacteria found in nature – including the human body – that are designed to selectively grab specific minerals, heavy metals and other toxins.
Hawken described a time when we’ll use these molecules and bacteria to “mine” and concentrate the residual but highly demanded minerals from, for example, the tailing ponds of old mining sites. Instead of digging up new stuff, we can find it in the pollution we’ve already left behind.
The approach offers remediation and revenue-generation at the same time. Toronto-based BacTech Environmental is an example of a company playing in this emerging space.
“We can now run the industrial age backwards by doing what nature does,” said Hawken, adding later, “The breakthroughs are ubiquitous and they’re coming at us fast.”
Can they reach us fast enough, and at a cost low enough to motivate? Will the federal government and mining sector – which prefers to stay clear of risk – wake up and realize that leadership on this front is becoming an issue of long-term survival?
We may be on the path to doubling mining GDP in the North. But we’re also emptying the bank account, and incurring charges we don’t yet recognize but, sooner or later, will have to pay.
Tyler Hamilton, author of Mad Like Tesla, writes weekly about green energy and clean technologies.
Tyler Hamilton is a business columnist for the Toronto Star, Canada's largest daily newspaper. In addition to this Clean Break blog, Tyler writes a weekly column of the same name that discusses trends, happenings and innovators in the clean technology and green energy market. This blog is a personal project started in April 2005. It is not an official blog of the newspaper.
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