gri conference - 27 may - elizalda - mining and metal sector supplement

CSR, Mineral Exploration and the Challenge of Accountability

Bernarda Elizalde, Program Director Sustainable DevelopmentProspectors and Developers Association of Canada

● May 27, 2010 ● GRI Global Conference ● Amsterdam, The Netherlands

The mining cycle Closure: (5 sq km) $10Ms – 100Ms

Mining (5 sq kms) Mining (5 sq kms) $100Ms - $Bs$100Ms - $Bs

Advanced Exploration (5 sq kms)Advanced Exploration (5 sq kms) $10Ms - $100Ms$10Ms - $100Ms

Preliminary Exploration (X10’s sq kms) Preliminary Exploration (X10’s sq kms) $100Ks - $Ms$100Ks - $Ms

Land Acquisition (X00’s sq kms) Land Acquisition (X00’s sq kms) $10Ks - $100Ks$10Ks - $100Ks

Area Selection (X000’s sq kms) Area Selection (X000’s sq kms) $1K - $10sK$1K - $10sK

Exploration players

Mining Producing CompaniesJunior Exploration SectorProspectorsGovernments

Junior Interm. Senior Gov’t. Other TOTAL

Canada 1087 21 7 1116

Australia 498 21 4 1 3 527U.S.A 102 5 3 110

Europe 102 6 8 1 117

Africa 29 5 5 39Latin America

13 13 4 1 31

Rest of World

10 17 8 5 40

Number of Companies Size and HQ location

Source: Metals Economics Group

Projects financed in Canada

5093

1228

583150

1056

310

688

81

314

125

359

Of the 9987 mineral projects held by TSX and TSX-V companies, 49% are outside of Canada

Source: InfoMine, Compiled by TSX, January 2008

Exploration drives mining

Remote northern camp

Explorationists examine core

Photos: Selwyn Resources

CSR context and realities

1) Evolving Expectations

3) Mobilization of civil society

4) Evolving expectations and uncertainties

5) Nothing against to benchmark, and no reporting

system applicable to the exploration sector

Environmental SocialHuman Rights and ethical practice

CHALLENGES

Capacity limitations

Dependency on capital markets

Majority have no revenue from production

Show results in a short timeframe.

Lack of CSR guidelines

The need to improve practices and reporting in the

exploration industry

CSR performance of industry sectors

CSR performance of industry sectors over time

The CSR performance - expectation gap

Tackling the challenges

www.pdac.ca/e3plus

KNOWLEDGE

ACCOUNTABILITY

Meeting the GRI

The aim of the partnership

Create a practical reporting system that would be applicable, convergent, and complementary to other reporting systems such as the capital market, or other governmental regulation systems.

Vision• The PDAC and GRI agreed that we would need to:

– Create a model report for each exploration stage (early, intermediate, and advanced exploration)

– Ask exploration companies to apply some sections of the already developed GRI system, such as the materiality test and some applicable indicators.

• The GRI-e3 Plus reporting system would also:– Be applicable if a certification system is set in place. – Create software that would put together a more practical, user-friendly

reporting system.– Be applicable to finance institutions– Create different platforms for explorers to indicate their level of

compliance within the reporting system. Thus, they would not limit themselves to filling out a form, but they would have the motivation to report more things if they want to.

Next steps• Formalize the partnership with the GRI • Discuss further details about timetables.

• The PDAC will:– Conduct further research

– Develop a first draft to create a two page reporting template for each exploration stage.

– Develop a review process with the PDAC CSR committee.

– Organize a consultation process with multi stakeholder groups.

Main needs – reporting systems

Applicable indicators and procedures from the GRI system