Rio Tinto Group culled its top executive team last year after taking the rights of Indigenous traditional landowners for granted. It’s at risk of making the same mistake again.
The Anglo-Australian miner is on the brink of developing one of the world’s largest new copper mines, thanks to an approval by the US Forest Service for the Resolution Copper project in Arizona last week.
It should be careful what it wishes for, though. The location has been at the heart of a deep and enduring conflict with Native American groups, evoking the destruction of Australia’s 46,000-year-old Juukan Gorge Aboriginal site last year. That controversy prompted the removal of former Chief Executive Officer Jean-Sebastien Jacques and two of his top lieutenants.
On paper, Resolution is a true prize. Its 27.3 million metric ton resource, under development since 2004 at a cost of some $2 billion, could meet all of America’s copper demand for 15 years. The metal is currently seeing its highest prices in eight years.
The trouble is the way it’s been advanced. A land swap with the Forest Service, which will allow mining to proceed, was first slipped through as a rider to a 2014 defense appropriations law and has been on hold ever since, pending the release of last week’s report. Pushing through that final approval in the dying days of a Trump administration that rolled back swathes of protections on public lands further inflames the controversy.
“Giving away our sacred land for destruction by a foreign mining company destroys our ability to practice our religion,” Wendsler Nosie, Sr., the San Carlos Apache tribal chairman, wrote in a statement on the eve of the approval.
The local Apache were driven from their lands by a bloody late-19th century war, conducted largely to advance the spread of mining in the region. Still, as we’ve written in relation to Juukan Gorge, the roots of many disputes are economic as much as cultural and historical. Any money that goes to landowners and governments is lost to shareholders. The profoundly unequal legal setup that resulted from the dispossession of Indigenous groups around the world is a competitive advantage to the miners who’d seek to develop resources on their lands.
In the places where resources companies have been committed to working with Indigenous groups, they’ve often found willing partners. At the recently closed Ranger uranium and Argyle diamond mines in Australia, Rio Tinto operated with the consent of Aboriginal communities for four decades. In New Mexico, the Jicarilla Apache have developed oil and gas on their land for a generation.
All of that requires a recognition of sovereignty and economic compensation that’s not on offer at Resolution, though. The loss that the mine’s tailings and operations will cause to local sacred sites “cannot be mitigated” according to the affected tribes, the Forest Service wrote in its approval. Programs to provide educational, cultural and environmental programs to local groups look like the bare minimum that the developers could get away with.
Rio Tinto has shown a better understanding of this in the past. Robert Wilson, the executive who created the modern company via a 1996 merger, was a vocal advocate of improving relations between miners and local communities. “If a company is not contributing to the long-term benefit of its host society, it is surely going to run into problems,” he wrote in 2013. That’s as much for reasons of solid self-interest as good public relations. If a miner establishes a reputation for taking advantage of local groups, it will find it much harder to get consent to future developments.
That suggests an alternative path that wasn’t taken in Arizona. For all the controversy attending the Trump administration’s last-minute approval of the site, developing Resolution was a bipartisan process. Tom Vilsack, President Barack Obama’s secretary of agriculture who oversaw the Forest Service when the land swap bill was passed, has now been nominated to the same role in Joe Biden’s administration. Deb Haaland, who’ll be the first Native American cabinet secretary if she’s approved as Biden’s secretary of the interior, will be responsible for some of the lands that the US government will receive in exchange for the Resolution site.
With commodity prices seemingly on the brink of a 2000s-style boom, resources companies now have a chance to repeat and improve on Wilson’s record. Those that handle land rights issues in a manner that respects the sovereignty of Indigenous groups and deliver them just compensation over and above the legal minimum will have the best opportunities to develop new mineral resources. Those that fail to do so may find themselves trapped in the morass of political, landowner and activist opposition, as well as shareholder disapproval, that mining companies struggled to escape at the end of the 1990s. Rio Tinto, of all companies, should be able to do better this time around.
Bloomberg
