Mining companies that carry out activities in compliance with environmental, social and governance (ESG) standards have the possibility of reducing by two percent the interest rate of the financing granted to cover the costs of their projects, whether exploration, expansion, replacement or other.

This was stated by Karin Torres, international consultant in Corporate Sustainability and ESG Risk Management, during her participation as a panelist in Mining Thursday (Jueves Minero) organized by the Peruvian Institute of Mining Engineers (IIMP), where opinions and knowledge were exchanged on "The importance of proEXPLO in the current context".

"Based on what I have seen over the past five years, I can say that if a mining company does not adequately manage ESG criteria, this may be a factor for the investor to evaluate in order to discourage moving forward with a financing or buy-sell process. Therefore, we need to pay more attention to these issues," she said.

According to the specialist, investors are exerting strong pressure to ensure that their capital is used not only for profitable purposes, but also to ensure environmental care or minimum impact on the ecosystem, especially at a time when the decarbonization of the planet and adaptation to climate change are being promoted.

"When we talk about environmental, social and governmental principles, we think it refers to the submission of the environmental study and the relationship with communities. But in reality this goes much further. These new aspects are of concern to investors and should be contemplated from the beginning of the mining activity," she argued.

Exploration Projects

For this reason, she argued that a mining project from the early exploration stage should already incorporate ESG standards within the strategic planning, as it will become a competitive advantage that will attract future stakeholders with financial, technical and logistical capabilities who wish to become partners or acquire full ownership.

"If the mining company does not ensure timely monitoring of compliance with environmental, social and governance components from the beginning of exploration activities, it will later be forced to backtrack the development of its project to the conceptual engineering stage to rethink the project design," she warned.

Supply Chain

Finally, Karin Torres encouraged junior and more experienced miners to include ESG criteria throughout the supply chain, so that contractors and suppliers act with greater awareness and take precautions about the impact of their operations on biodiversity and the safety of workers.

"In general, companies usually hire a team of experts to carry out exploration work on their behalf, but if they do not supervise what has been done, they will not be able to know the working conditions, processes and methods for field work, nor the protocols for managing solid waste and effluents generated," she said.

proEXPLO 2023: Descubriendo la Minería del Futuro