Responsible sourcing motivates buyers and producers to consider a life-cycle approach to raw material production, refining and conversion into enduse products. Responsible sourcing examines sustainable development goals, defines performance criteria, reports on compliance with criteria and offers independent, third-party audits of compliance reporting. This approach is applicable across the extractive industries with adaptation to specific commodities and within a range of frameworks. The perspective of the supply-chain buyer will vary based on the commodity and the framework endorsed by the buyer’s organisation. When the client is a procurement team from a manufacturing organisation, the approach to mine project evaluation moves from a traditional focus on economic viability, technical risks and social and environmental impacts to a new emphasis on sustainable development and technical risks related to production (i.e. quality, quantity and reliability).
Most frameworks rely on the United Nations Sustainable Development Goals. Established responsible sourcing frameworks applicable to the mining industry include, but are not limited to, governance of materials produced in Conflict Affected and High-Risk Areas as defined by the Organization for Economic Co-operation and Development, the Conflict Mineral Due Diligence requirement for publicly listed US companies, and standards produced by the London Metals Exchange. Examples of industry-sponsored responsible sourcing frameworks include the Copper Mark for copper, lead, nickel and zinc production; ICMM Performance Expectations; and the Aluminium Stewardship Initiative.
For a given supply-chain buyer seeking to secure raw material for its manufacturing
operations, the applicable responsible sourcing framework(s) will be defined at
the start of the engagement. The mining consultant must understand how their
technical inputs will be used by other stakeholders engaged by the client to complete the responsible sourcing assessment. Depending on the project, these technical inputs may include energy efficiency, water consumption, re-use and discharge metrics, labour requirements, and equipment fleet specifications.
The technical assessment for a supply-chain client focuses less on mineral resource uncertainty, alternative or optimal mining plans, or the potential for lower cost production. Rather, this client seeks a qualified opinion regarding confidence that the commodity can be responsibly produced at the quality and quantity required by the client and on the timeline expected by the client. This opinion requires the same fundamental principles of mining project evaluation, but framed in a manner that aligns with the responsible sourcing expectations of the client.
If the property is a development project, the evaluation will require benchmarking and technical review of technology risk, ability to achieve production targets and efficacy of social and environmental mitigation. If the property is an established producer, the evaluation relies on operational data, performance to plan, and a track record of reporting on sustainable development performance.
