Mercuria CSR Report 2021 - Flipbook - Page 61
2021 Corporate Social Responsibility
to change but that requires a great deal of time, attention, and effort on their part but also on our part
in order to adhere to standards which are uniform, well-defined, and independently verified. This is
missing from the industry today as standards are disparate, uncoordinated and there are lot of different
standards which are overlapping, and in some cases, contradictory. We have to do a better job in terms
of compliance, traceability, and standards but the financial industry also has to do more to engage with
the mining and metals industry to understand it.
Government also has a major role wherever we build production, processing, or recycling facilities. By
the way, recycling has a major role in Techmet’s mission for technology metals. The other element of
the equation is that any production or processing facility requires government signoffs, government
granted rights, government regulatory compliance as well as environmental impact and social impact
approvals. Governments, be they in the United States, where we have many projects, or elsewhere in
the world, need to do a lot better at streamlining their processes of approvals and for support. This
is critical in order to facilitate the right types of fundable projects getting built timeously. Funders,
implementors and regulators are the key stakeholders that could do better to aid companies like ours
to accelerate this transition. Interestingly the issues are not with the end-users; the Tesla’s of this world
will definitely buy from us if we produce more sustainably and responsibly.
Based on your experience, what do you see as the qualities of a good
government partner?
There are some obvious ones like transparency and the absence of corruption and therefore you have
a level playing field and you know what the rules are. These are prerequisites in having confidence in
an environment that justifies investment wherever you are in the world. The key differentiators beyond
those basics that would make an environment or a country, more rather than less investable, is access
to decision-makers to deal with problems that arise in complicated project. And in some cases, these
projects are also in complicated environments. Natural resources and the granting of rights to exploit
them have a political dimension as well. Problems therefore can be historical, financial, operational,
security related or community oriented and so you need to be able to engage with policymakers to solve
them. But in some countries, this can take months as its extremely difficult to engage decisionmakers
to build a long-term partnership on common interests.
And this element of partnership is the differentiator as we want to invest for the long-term and want
to do things correctly in order to build common interests with respect to community development,
ecological issues, as well as employment. After all, we are creating economic activities that benefit the
country as a whole as we are producing inputs that benefit the world as a whole in terms of batteries,
electric vehicles and renewable energy systems. You need to be able to deal with problems and to deal
with problems you need relationships and alignment of interests.
Yet partnering with governments can also be a major source of reputational
risk for the mining and metals industry.
How do you manage these risks?
First, we have stayed clear of high-risk jurisdictions since Techmet was created in 2017. Therefore, we have
chosen not to pursue opportunities available to us in places like the Congo, Zimbabwe, and some other
countries where it is much more difficult to ensure ESG standards. The countries we operate in are ones
that we are confident we can operate with proper governance and are not tarnished in any way by practices
that are inappropriate. Most of our value is created in projects in North America and Europe in this regard.
However, let’s take the case of Brazil where we are building our presence. Brazil has its historical issues
and is a complicated place, but it is a pretty well-defined mining and metals jurisdiction from a regulatory
point of view. And so, we don’t have to engage in any practices that are unacceptable. Our only substantial
presence in Africa today is in Rwanda. And again, Rwanda is a complicated place due to its political history
but from a mining investor’s point of view it is well governed, focused, and transparent.
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