Rio Tinto’s Experience in Australia should be a wake-up call for Canadian Mining

On May 24, 2020 blasting activities at Rio Tinto’s iron ore mine in Western Australia caused the destruction of rockshelters, known as the Juukan Gorge sites, on the land of the Puutu Kunti Kurrama and Pinikura people.

These rockshelters were reported to contain artifacts that could be traced back 46,000 years. While Australian law permitted the blast, it was against strong opposition from the traditional Aboriginal owners.

An internal Rio Tinto Board review found that the CEO and two senior executives were partially responsible for the destruction of the Juukan Gorge sites. With pressure from shareholders and an international outcry, Rio Tinto made a public apology, and the CEO and two senior executives were stripped of their bonuses. With ongoing pressure, Rio Tinto later announced, 110 days after the blast, that the CEO and two senior executives would be resigning.

This needs to be a wakeup call for the Canadian Mining Industry regarding relationships with Canada’s Indigenous Communities and their commitment to environmental and social governance (ESG).

The significant shareholder pressure and intense negative public relations that followed, due to a lack by Rio Tinto to appropriately address the situation, suggests that Rio Tinto didn’t fully recognize the seriousness of their actions.

The desecration of such a sacred site indicates a disturbing disconnect between years of well-meaning corporate mission statements and a mining company’s true priorities. It also seems to downplay the importance of administering proper environmental and social governance.

While we have started moving in the right direction towards prioritizing ESG in Canada, our experiences at MPA Morrison Park Advisors suggests that, not only the mining community, but the Canadian business community and capital markets generally have yet to fully embrace the principles of responsible ESG management. Our work with First Nation communities across Canada, and our experiences generally, clearly show that we have a lot of work to fix the broad culture of indifference for the basic rights of Indigenous communities, and other racialized communities, and their cultural heritages.

The ill-fated incident in Australia, and how it was handled, needs to be a wakeup call to all of us; advisors, investment bankers, management, investors, senior executives and Board members throughout.