Report by Richard Solly, Co-ordinator, London Mining Network, with assistance from Andrew Hickman, Andy Whitmore, Dina Rui, Roger Featherstone, Roger Moody, Sukhgerel Dugersuren, Yvonne Orengo and Zoe Lujic.
Rio Tinto’s London AGM on 9 April 2021 was the first ‘hybrid’ AGM we have experienced: the legal meeting took place physically with a statutory minimum of four shareholders in the company office while other shareholders joined by video conference (and, if they wanted to speak, by phone). It was a step forward from last year’s phone conference and considerably more open than the AGMs of any other UK-listed mining company since the COVID-19 pandemic lockdown began in March 2020. The company has posted a recording of the AGM on its website.
And that’s everything positive that can be said about it.
The meeting was, the company told us in reply to a shareholder question, being ‘attended’ by 35 people around the world, in contrast to the 150 or 200 people who usually attend the company’s physical AGMs. So, the world’s second largest mining company, with an unrivalled history of association with human rights abuse and environmental destruction, was being held to account by a mere 35 people.
Participation by representatives of mining-affected communities was theoretically much easier than at a physical meeting in London, but interpretation was not on offer, so in practice only confident English-speakers could take part. Free phone lines were available from many countries so that participants had the possibility of actually addressing the AGM, but no such service was available in Bougainville, Madagascar, Mongolia, Serbia or West Papua, where some of the worst effects of the company’s current and past operations are felt.
I would not wish to accuse anyone of lying – which implies a conscious intention to convey false information – but as successive waves of nausea washed over me I could not help remembering company Chairman Simon Thompson’s response to a question I asked about an exploration project in Chile at the 2019 AGM. He told me the company was not involved in it, and that was that. But after the meeting, a company official told me it had been involved until the previous December, and Simon Thompson came and apologised for having responded as he did – the Chief Executive had been telling him the company was not involved. So the AGM participants had been misled.
This time, the atmosphere was different. The company was on the defensive because of the outcry over its wanton destruction of the 46,000 year old Juukan Gorge Aboriginal rock shelters in Western Australia last year. The Chairman chose to respond with repeated apologies for that outrageous act combined with frequent assertions that the company respects indigenous people. Before the formal beginning of the AGM, a video was shown with interviews with a number of Rio Tinto staff explaining how horrified many workers in the company were about the destruction of Juukan Gorge and the strength of feeling in the company about the need to respect communities. Some of the workers interviewed were Aboriginal people, and the genuineness of workers’ feeling was clear. A similar video was shown directly after the Chairman formally opened the meeting.
But it looks as though Rio Tinto as a company only says sorry to indigenous people when management realise that investors and legislators are upset and it might cost them something. In 2018 they sold their interest in the blood-drenched West Papuan operations of PT Freeport Indonesia to an entity controlled by the brutally oppressive occupying government of Indonesia, after decades of bloodshed, violation of indigenous sacred sites and catastrophic environmental damage. Despite being repeatedly pressed at the AGM for an apology for Rio Tinto’s complicity in this history of oppression, Chairman Thompson failed to offer one. Pressed to apologise to indigenous people for the company’s legacy of toxic waste around the Panguna mine in Bougainville, Chairman Thompson blamed its failure to clean up operations there on the outbreak of war on the island – failing to mention that the war began as a direct result of the damage done by the Panguna mine. Saying sorry seems to be reserved for occasions when investors and governments are getting upset. Until Rio Tinto apologises and undertakes meaningful reparation to all those communities whose lands and sacred sites it has despoiled, its apologies appear to me the height of hypocrisy.
Information about the mining projects featured in the questions below, and about community demands, can be found here.
1. Chairman Simon Thompson began the formal business of the AGM by saying that he was delighted to welcome us to the meeting. Given the pressure the Board has been under from many influential institutional shareholders over the destruction of Juukan Gorge, I find that difficult to believe. He noted that he was joined in London by directors Steve Allen, Sam Laidlaw and Peter Cunningham, so a quorum of shareholders was physically present. New Chief Executive Jakob Stausholm was joining from Australia and other directors from various locations.
2. Yet another video was shown, with ethnically varied, including Aboriginal, speakers saying how the company has changed since the Juukan Gorge event. The company was now trying to understand the significance of sites and listen to Aboriginal people. They were now taking the same approach to cultural significance as they do to safety. If they understand and respect culture it will help grow the business. There is a need for education around heritage. They had reviewed 1300 heritage sites and removed millions of tonnes of production as a result, to protect the heritage. There is a need for more indigenous leaders in the company so it can understand host communities, and those connections will drive value for shareholders. Employees want to be proud of working for Rio Tinto again and this will drive change.
3. Simon Thompson then said it had been a difficult year for everyone and particularly for Rio Tinto [though not, perhaps, as difficult a year for the board as for those suffering as a result of the company’s operations around the world]. Despite the company’s difficulties, it had been able to pay an outstanding dividend to shareholders. It had paid plenty of taxes and royalties too. It had further strengthened its balance sheet. It would have been easy to lose focus on safety because of the COVID pandemic but for the second year running there had been zero fatalities, and progress had been made on climate change strategy by providing information on the company’s scope 1 and 2 emissions and meeting with customers about scope 3 emissions. Rio Tinto was one of the first companies to decide to put its 2021 climate report to an advisory vote at the 2022 AGM.
4. All this, he said, is overshadowed by the destruction of the Juukan Gorge rock shelters. This was a violation of the trust of the PKKP people. He had visited and apologised in person. He will go back soon to review progress on rebuilding trust. He said he was accountable, as company Chairman, for the failings that led to this so he would not seek re-election at the company’s AGMs next year but use his remaining time as Chairman to provide support to Jakob Stausholm and the new executive team and work with the Australian parliamentary inquiry to ensure that destruction like this never happens again at a Rio Tinto operation.
5. He said that Rio Tinto is an exceptionally strong business. This year, 2021, “is all about stability and execution”. The company will work on safeguarding the environment and host countries and communities. It has an absolute determination to rebuild trust and re-establish Rio Tinto as a leader in social and environmental performance. Rio Tinto will emerge a stronger and more caring company, he said.
Chief Executive’s address
6. New Chief Executive Jakob Stausholm acknowledged the traditional owners of the country from which he was speaking and all the traditional people who host Rio Tinto operations around the world. The destruction of the Juukan Gorge rock shelters was a terrible thing to do and he was sorry. It had severely damaged relations with the PKKP people and other indigenous people. It was a significant breach of trust. He had visited Juukan Gorge early this year to express his deep sorrow. He witnessed the pain inflicted. The work that the company has to do is beyond the remediation of the site. It must work in partnership with traditional owners in Australia and indigenous people in the USA and Canada and elsewhere to secure our shared future, understanding their experience. “In so many places we are guests on their land,” he said. “We must understand their priorities and concerns and minimise our impacts.”
7. Jakob Stausholm said that he had met many people in and outside company who care deeply about Rio Tinto, and this convinces him that the company can be rebuilt and made into “a company we can all be proud of every day”. He was proud about how the company had adapted to the pandemic. He offered congratulations to workers and contractors for their resilience in a challenging year. He was proud that Rio Tinto had delivered another year with zero fatalities as there is nothing more important than safety. He spoke about the company’s cash flow and the strengthening of its balance sheet. Nonetheless, it needed to improve in certain areas. It must be the best operator. It will only consider opportunities that create value but it must also regain its social licence to operate through attending to ESG [Environmental, Social and Governance] issues. This will take time and effort. There is a new executive committee in place, in which almost everyone is new, including the Chief People Officer. Rio Tinto has ‘an extraordinary history’, he said, and a great future.
8. [The company’s history is briefly summarised in a timeline on the London Mining Network website, drawing heavily on the pioneering work of LMN member group Partizans, and supplementing what the company tells the public about its history on its own website.]
Senior Independent Director’s address
9. Senior Independent Director and Chair of the Remuneration Committee Sam Laidlaw said that the past year had been one of the most challenging in Rio Tinto’s history. The destruction of Juukan Gorge should not have happened and does not reflect Rio Tinto’s culture [though it does reflect its history]. The loss of cultural heritage was tragic. On 24 August 2020 the board’s Review of the incident had been published. Many stakeholders felt that the financial penalties on executive staff were insufficient and that to rebuild relations with stakeholders changes of leadership were required. The board had agreed to remove three executives. There had been no deliberate decision to act or not act, and no compliance failure, as permissions had been given by the Western Australian government. But there had been a critical risk assessment failure going back many years, partially attributable to these three executives. But the board decided that there was no legal reason to terminate employment so the decision was for employment to be terminated by mutual agreement. The company’s Remuneration Policy would be updated to align more with shareholder and stakeholder expectations. ESG matters would be included in the incentive plan with a value of 15%, complementing the 20% already included for safety.
Questions and Answers
10.Most of the questions had been submitted in advance in writing. Where questions were asked verbally by the shareholder rather than read out by a company official, it is noted below.
Scope 3 carbon emissions
11. Research organisation Market Forces pointed out that the company’s Scope 3 carbon emissions of 519 million tonnes were more than the UK’s total carbon emissions of 455 million tonnes in 2019. This could be a massive financial liability for shareholders if carbon pricing and other statutory methods for lowering carbon emissions are implemented.
12. Simon Thompson replied that, if there is a liability for carbon pricing, the polluter pays principle will apply, so the company responsible for the scope 1 emissions will pay, and Rio Tinto’s scope 1 emissions are low and have been reduced by 46% since 2008. Scope 3 emissions are those of customers, principally steel mills in China, Japan and Korea, and all three countries have committed to net zero, by 2050 for Korea and Japan and 2060 in China.
13. Rio Tinto, he said, is helping customers achieve greenhouse gas emission reductions. Steel mills will have to pass on some or all of their carbon pricing costs to their customers and this will have an impact on the cost of steel, but the cost to customers may be limited as steel costs are a small part of the total cost of, for instance, electric vehicles (2% of cost), and people would be willing to pay more for zero carbon steel. Net zero steel will involve new technologies such as the use of hydrogen as a reductant or Carbon Capture and Storage. Use of hydrogen would lead to a reduction in the demand for coking coal and this is why Rio Tinto got rid of its coking coal operations in 2018. But there are no alternatives to steel in many applications, so the demand for iron ore will continue. Rio Tinto’s Climate Change Report shows its portfolio performing best if governments introduce carbon pricing and other low carbon policies. This is an opportunity for the company.
Oyu Tolgoi copper mine, Mongolia
14. A question from Bat-Oril Batulga was read out about the company’s Oyu Tolgoi mine in Mongolia: “Rio Tinto documents state that from 2017 onwards Oyu Tolgoi will face water shortages, but the transfer of waters from the Orkhon River, through the Orkhon-Gobi project, is out of the question due to its impact as well as its cost. But the World Bank project has continued consultations and encouraged the Gobi population to demand the transfer of water for their own development. We are hearing from local communities that the Orkhon-Gobi project is still being discussed. This involves construction of a 1000 km water pipeline and water extraction project that will kill the Orkhon River, which is an important ecological feature in the Orkhon Valley, itself a UN protected heritage site. What is your Plan B for water for the mine? Is it in fact the Orkhon Gobi project?”
15. Simon Thompson replied, “No.” He said that Oyu Tolgoi uses water from a large, deep, brackish aquifer discovered by Rio Tinto geologists, and does not use surface water for its operations. Oyu Tolgoi will consume about 20% of this aquifer during the entire life of the project. The project is extremely efficient with water, consuming 30% of the water used by similar projects. The Orkhon Gobi project is a government project supported by the World Bank but not necessary for Rio Tinto.
16. Later on in the meeting, a written question was taken from Sukhgerel Dugersuren of Oyu Tolgoi Watch in Mongolia: “At Oyu Tolgoi, members of affected communities are concerned about the lack of assessment of the impacts of land subsidence on their pastures and general living environment. There are also worries about the land subsidence potentially affecting the stability of massive tailings ponds. Current cost overruns have been caused by land instability. Will you conduct an analysis of alternative mining technologies to replace the controversial block caving method? Do you plan to carry out an ESIA that includes the impacts of the alleged new land instability on block caving, land subsidence and potential failure of tailings facilities in this unstable zone?”
17. Simon Thompson replied that the subsidence anticipated from the Oyu Tolgoi mine will impact about 400 hectares out of a total licence area of 8,500 hectares, so it will be well within the mine fence and away from land used by the community. The tailings containment and other facilities have all been designed and built at a safe distance from that area of subsidence. The ESIA [Environmental and Social Impact Assessment] that Rio Tinto carried out evaluated the subsidence impact and Rio Tinto will continue to monitor it throughout the life of the mine, but it always formed part of negotiations with the Government of Mongolia and local communities, and it is all within the mine fence and will not affect community grazing lands.
18.[Oyu Tolgoi Watch points out that the company has not responded to the important question on whether they will do an assessment of the block caving technology, subsidence zone and tailings facility with regard to the unstable ground conditions. Rio Tinto insist that their substandard 2012 ESIA covers all current issues, including unstable ground conditions reported only in 2019. They also continue to claim that Oyu Tolgoi is a world leader in water management without pointing to any scientific evidence.]
Resolution Copper, Arizona, USA
19. A question was read out from Henry Munoz about the Resolution Copper project in Arizona, USA: “I’m Henry Munoz, Chair of the Concerned Citizens and Retired Miners’ Coalition and I’ve lived in Superior, Arizona, all my life. I have 23 years’ underground mining experience working at the Magma mine at Oak Flat until the 1982 closure and at the BHP San Manuel block cave mine for 14 years. With my experience with block cave mining, I know the devastating effects your proposed mine would have on my town and the region. Your proposal would destroy the surface of Oak Flat, and both drain and pollute the deep aquifers around Superior, and the water supply of farmers and residents of the valley east of Phoenix. Based on my experience with block caving in Arizona, the depth of this deposit, and the problems you are having with building the block cave at Oyu Tolgoi, your design won’t work. If you destroy Oak Flat, you will destroy our town’s chance to build a recreation based sustainable economy. Will you abandon the project so that we may enjoy Oak Flat and prosper for many generations to come?”
20. Simon Thompson replied that Resolution Copper is important, as the only way we can tackle climate change is by unprecedented investment in renewables, and this will involve the production of copper. Resolution Copper has the potential to provide 25% of US demand for copper so the project will help the US to make the transition to a low carbon economy. [He did not deal with the issue of selling concentrate overseas for processing.]
21. “Everyone agrees that copper is essential to tackle climate change,” he asserted. [On the contrary, LMN and many others believe that the only way forward to protect the planet and human life on it , is reduction of demand through development of a post-extractivist economy, degrowth and a move away from unbridled consumerism.]
22. “All mines have an impact on the environment and local communities, and all mines are controversial,” he said, but compared to the alternatives Resolution Copper has the potential to be a relatively low impact mine. [Arizona Mining Reform Coalition comment that this statement is “complete hogwash”, given that the mine would have a footprint of 43 miles and involve the destruction of nearly 15,000 acres and the use of water which Arizona does not have to spare, and that it would take a thousand years for the water table at Oak Flat and in the East Valley to return to equilibrium.]
23. Simon Thompson said that the mine site is in Arizona’s ‘copper triangle’, with a legacy of mining dating back well over a century, and sits within the footprint of an existing mine. Mayors of all the towns within the copper triangle have written to President Biden indicating their support for the project, and so has the Governor of Arizona. [Arizona Mining Reform Coalition point out that many of those supporting the project are receiving money from Resolution Copper.] The project is likely to contribute 60 billion dollars to Arizona over the life of the mine in the form of well paid jobs in low income, high unemployment communities, including Native American communities.
24. There had already been eleven years of consultations on this project, he went on. [Arizona Mining Reform Coalition says that the first, incomplete, mine plan was not released until 2013.] The Land Swap agreement which will allow a detailed feasibility study of the project was put into law by the Obama Administration [by a piece of legislative chicanery organised by Arizona congress members] but it was subject to a detailed process managed by the US Forest Service. There had been 550 documented consultations with communities, business, NGOs, local and state governments and other organisations. If the Land Swap is approved, the company still needs to do a feasibility study, including with the eleven Native American tribes with associations with this part of Arizona. Nine of the eleven tribes are supportive of the project, he said. [Arizona Mining Reform Coalition points out that the ITAA, which represents all Arizona Tribes except the Navaho Nation, is involved in the lawsuit against the project. All Tribes, either individually or as part of ITAA or the National Council of American Indians, have voiced opposition to it.]
25. Simon Thompson said that Rio Tinto altered the design of the project to respond to their concerns. Apache Leap had been transferred into a special management zone. Ga’an Canyon had been carved out of the Land Swap package because of its cultural significance. He said that the San Carlos and White Mountain Apache oppose the project as the site is culturally significant for both tribes and that it is a very beautiful place used by hikers and climbers too. He said that Rio Tinto wants to work with the Apache to understand their concerns and see if the company can identify ways to manage them. Rio Tinto wants to protect the customs and traditions of the Apache people, he said. [In which case, the company should abandon the project.]
26. Later in the meeting, a written question was taken from Roger Featherstone of the Arizona Mining Reform Coalition: “Resolution Copper’s plan to destroy Oak Flat will fail. Moving forward with this experiment is bad enough, but destroying Oak Flat, a sacred recreational and ecological haven, is beyond reason. After you blew up the sacred rock shelters at Juukan Gorge, you promised never to do it again. If your words mean anything, you have no choice but to abandon the project. You would suck our water dry to export unfinished concentrate abroad during a decade’s long drought with projected water shortages starting next year. You would devastate a people’s culture and religion. You would destroy a valley with a mountain of toxic tailings that would cover the city of London 5’ deep. The project would use the same amount of water that would supply Tempe, AZ, with 180,000 residents. You would deprive Arizona of ½ billion dollars of revenue earmarked for educating our future students. Will you keep your word and leave Arizona alone?”
27. Simon Thompson said that the Land Swap Agreement would enable Rio Tinto to conduct a full feasibility study on the project, and if the project were to proceed, it would still be many years off. “We have to concentrate on consultations with all interested parties, in particular the San Carlos and White Mountain Apache, both of whom regard Oak Flat as a sacred site. If the project goes ahead, water consumption will be a small fraction of the Arizona total. [This has been refuted in comments submitted by the Arizona Mining Reform Coalition on the preliminary Environmental Impact Statement.] Much work has been done with regulators to make sure there will be an adequate supply for both the project and all other users.” [This has been refuted in comments submitted by the Arizona Mining Reform Coalition on the preliminary Environmental Impact Statement.] For that reason, he said, the mine had been designed like Oyu Tolgoi to be highly water efficient. [This has been refuted in comments submitted by the Arizona Mining Reform Coalition on the preliminary Environmental Impact Statement.]
28. All the analysis the company and the US Forest Service had done, he went on, had been independently reviewed by third parties and was now being reviewed by the Biden Administration. [Arizona Mining Reform Coalition points out that there is a close relationship between Resolution Copper and the contractor who wrote the preliminary and Final Environmental Impact Statements.] If and when the mine goes into production, all the ground and surface water impacts of the mine will be monitored, and federal and state agencies will ensure compliance.
29. Tailings are another major issue for any copper sulphide project, he continued, and a huge amount of work is being done on the design and location of the tailings facility. Its proposed location had been changed to avoid encroaching on National Forest land, and Rio Tinto had applied all the lessons of the recent tailings disasters in Brazil to design Resolution Copper’s tailings management. All the lessons learnt from Juukan Gorge were also being applied to Resolution Copper. The company wants to engage with the San Carlos and White Mountain Apache and all the eleven Native American tribes that have associations with the area. Rio Tinto has redesigned the project to remove Apache Leap and Ga’an Canyon and wants to engage and work with all Native American tribes to understand their concerns and take measures to address those concerns. Rio Tinto welcomes the current review of the land swap by the Biden Administration which will make sure that if the company does proceed it will have the support of the majority of interested parties.
QMM ilmenite mine, Madagscar
30. Yvonne Orengo, of Andrew Lees Trust, asked about water impacts at the company’s QMM operations in Madagascar: “You say that company won’t be the same after Juukan Gorge, so why is RioTinto/QMM currently telling communities and stakeholders in Madagascar that elevated levels of uranium in water downstream of the mine, 50 times higher than WHO safe drinking water levels in some places, is all “naturally occurring”? You have no evidence to make the claim and it contradicts existing data including QMM’s that shows QMM is contaminating waterways with elevated heavy metals and uranium in its discharge waters. Why do you continue to obfuscate the findings and mislead traditional communities and your shareholders? How does this build trust?”
31. Simon Thompson replied that QMM is a mineral sands project and that the sands mined there have a low level of naturally occurring radiation. No chemicals are added during the processing, just water. But the process of dredging the sand results in some sand and other sediment being accumulated in the water. The company maintains the water table of the mining ponds below the level of the water in the surrounding environment so it cannot flow into the environment, but periodically the company has to release water from the mine into the environment. Before doing so, water is put in settling ponds so that material separates out, and before release the water is sampled to make sure that the quality is as good as the water above the mine.
32. Third party audits have been carried out four times, he said, and a fifth audit is in process but has been delayed because of COVID restrictions, but efforts are being made to make progress with the study and it will be publicised and shared once it has been peer reviewed. There have been temporary exceedances in aluminium and in cadmium and for that reason the company has stepped up its water management programme and there is a team working on this to ensure there is no recurrence. Rio Tinto has shared all of its sampling of water quality with Andrew Lees Trust and other stakeholders including local communities, mayors, civil society organisations and so on. Rio Tinto will continue to work hard to improve the quality of water management on the site to ensure they do not have exceedances in the water that is released to the environment.
33. Two questions about QMM were asked by Ketakandriana Rafitoson of Publish What You Pay Madagascar.
(i) “When it comes to the rural poor of the Anosy region in southern Madagascar, those very people targeted to be “lifted out of poverty” by the presence of the QMM mine, villagers tell us that their water has been polluted and degraded over the last ten years since the QMM mine started its operation. Local people are reliant on natural water sources for survival. All the existing water data and studies point to contamination and the detrimental effect of QMM operations on the local waterways and water quality of the region. So, how does Rio Tinto/QMM explain and justify its reluctance and delay to address safe drinking water needs of the mine affected communities? When will Rio Tinto concede the QMM mine is contaminating waterways around the mine and provide safe drinking water to the affected communities, made up of poor fisherfolk and rural producers living on less than $1.5 per day. Why the delay?”
(ii) “We have been researching the QMM mine’s contamination of local waterways in Anosy for over four years with the help of an expert hydrologist and a radioactivity specialist and we want Rio Tinto to explain why QMM is insisting to the affected communities and civil society, and why Rio Tinto tells its shareholders, that it ‘uses no chemicals’ for extraction at the QMM mine, only water. It leads with this whenever asked to answer questions about QMM’s contamination of water with elevated levels of uranium and lead, cadmium and aluminium. Why is Rio Tinto not explicitly admitting what they know: that QMM’s extraction process (churning mineral sands) causes the elevated levels of uranium and heavy metals in its mining pond and discharge waste waters that are the subject of the inquiry? Why is the company apparently trying to take advantage of the lack of scientific understanding of the situation in its audiences to divert attention from the facts, our very real concerns about water contamination, and our demands for safe drinking water?
34. Simon Thompson said that he had partially answered the second question in response to Yvonne earlier. He said Rio Tinto were not trying to confuse people. They were trying to be “as transparent as we can be” and this is why they engage with mayors and CSOs to ensure they understand what they are doing on safety and water management. The data from the waste water study did show elevated levels of aluminium and cadmium but not uranium and lead. But “we acknowledge a problem of access to fresh water across the whole of southern Madagascar,” which is partly a function of drought and high population growth, he said. Population doubles every twenty years in that part of Madagascar, and access to water is affected by slash and burn agriculture, which also affects the quality of water flowing into rivers, and there are endemic health risks from waterborne diseases. Rio Tinto acknowledges there is an issue of access to fresh water and did invest with the World Bank to improve access to water and sanitation, including to put twenty wells into local communities, and is improving waste disposal and sewage treatment to improve the quality of water, and Rio Tinto continues working with the government to improve water in the Ft Dauphin and two other local municipalities to improve access to fresh water. But slash and burn and high population growth are associated with poverty, and although the mine will not solve everything, it is providing high paid jobs and technical support to local municipalities and the government to help.
35. At the end of the AGM Yvonne Orengo of Andrew Lees Trust asked a further follow up question by phone about what the Chair had said about the company’s QMM operations in Madagascar: “We are getting the same answers to the questions we have been asking since 2019 despite significant amounts of studies and data that has been provided to you that show there is a serious concern and cause for concern about water quality around the QMM mine. There is no evidence that you have been able to provide to us for over more than two years to show that the QMM settling ponds are effective at removing heavy metals and uranium and this means severe health impacts, eg uranium: kidney damage, neurological diseases, multiple illnesses, and lead: development of children’s brains that can have a generational impact. Let’s be clear: this is not about general access to water in the region. It is nothing to do with Tavy (slash and burn agriculture) drought or population growth. It is specifically related to QMM contamination of waterways. … given the levels of poverty you refer to and challenges the poor are facing, I repeat Ms Rafitoson’s question: How can Rio Tinto justify not providing safe drinking water to the affected communities?”
36. Simon Thompson said that Rio Tinto accepted it had not made as much progress on this over the last twelve months as had been hoped, because of the pandemic. The company had listened to Yvonne and others when they raised these concerns, and as a result that is why the fifth study of water quality and radiation risk had been launched in December 2019. Some progress was made before the pandemic struck, but not as much as the company had hoped. That process has been delayed but sampling is now getting back on track. This further study will be peer reviewed and made public. All data will be shared with the external advisory group, local communities, mayors and CSOs. He said that Yvonne would soon be having a meeting with Sinead (Kaufman), who is taking over responsibility for this area. “We recognise we have more work to do to address the concerns that you raise,” he said.
37.There are multiple issues arising from Rio Tinto’s reponses on the QMM Mine. ALT UK and PWYP MG have made a number of observations and comments about Rio Tinto’s responses to the QMM water contamination issues at the 2020 AGM, both in terms of technical inaccuracies or inadequacies and also in terms of social responsibility failures in the engagement about QMM and water quality in Anosy. These observations and comments can be accessed in full here.
38. For example, it is not correct to say there is low radiation in the region. It is high by global averages and why mining mineral sands here brings risks. It is not correct to claim that QMM manages its mining pond water level to be always below the local water table, as there is evidence to the contrary. It is not a full answer to say that dredging results just in sand/sediment accumulating in the mine water. That is not the full story that allows understanding of how the uranium concentrations occur. It is not correct to claim that there is no elevated uranium in QMM waste water (just because there is no legal limit for discharge levels). There are high levels of uranium in QMM waste water, and these levels have also manifested and been identified downstream of the mine. It is questionable to suggest cadmium and aluminium contamination from QMM’s mine into local water is “temporary” when the data shows otherwise. And, it is certainly not the fault of the rural poor that “fresh” drinking water access in Anosy is a problem.
39.Blaming the rural poor and their traditional agricultural practices for the lack of “fresh water” access is below the belt, even by Rio Tinto standards. The ‘othering’ of the rural poor is, however, consistent with the company’s track record, narrative and treatment of villagers in this region. It was used to push the mine project through in the mid-nineties by claiming all the forests would be destroyed by local people’s slash and burn agriculture within twenty years. This has proved completely erroneous, since the main parcels of littoral forest in Anosy are still largely intact more than two decades on. The largest loss of littoral forest area in Anosy region is caused by QMM’s mining operation. The rural poor in Anosy have been accused by QMM of failing to accept the company’s “gifts of development” whereas, in reality, those benefits they have a right to enjoy, such as safe drinking water access, are denied them by QMM, who instead contaminates their natural drinking water sources. In this regard, to use the suffering of the rural poor and the government’s inability to meet national potable water targets in order to deflect from QMM’s contamination of local waterways – and in doing so to include “drought”, which is currently causing famine, suffering and starvation to over a million people in the neighbouring, dry Androy region – is really quite shameless.
Grasberg copper and gold mine, West Papua
40. Andrew Hickman asked a question via the phone link. He said he had been coming to Rio Tinto AGMs regularly for many years now. He almost always asked about the Grasberg mine in West Papua, just north of the country where the company had destroyed Juukan Gorge. He said he wanted to ask this question again, as he had been in correspondence with the company over the matter. He had asked for years about the destruction and destructive legacy of this mine. He had submitted the rest of his question in writing but in the context of what Simon Thompson had said about Juukan Gorge, his clarity that the company and its executives had failed, his talk of being guests in the land where the company operates, and his willingness to say sorry, Andrew wished to point out that these same issues apply to what the company has been responsible for at Grasberg for many years. The company has left Grasberg. Putting aside legal, financial and reputational risk, does the company recognise a moral responsibility for its actions? Does it recognise that those responsibilities do not stop with a legal clause in a contract or in a cheque? “Can you say sorry now for your legacy of destruction at Grasberg and in West Papua?” he asked. [Andrew has written about the legacy of Rio Tinto’s involvement at Grasberg in LMN’s Cut and Run report, published in February 2020.]
41. Simon Thompson said he did recall that Andrew has asked about this at many previous AGMs. To give some background, he said, Rio Tinto was never a shareholder in the Grasberg mine and did not manage it. Rio Tinto had a metal strip agreement that entitled it to a proportion of production above an agreed level. “Andrew, you encouraged us to divest from Grasberg because of your concerns, and we sold our rights in 2018, and as part of that process we did not assume any further liabilities post-2018. We did not walk away from our liabilities but sold them to a company owned by the Indonesian government, and they were aware of all those liabilities.” The Government of Indonesia had said for many years that it had an ambition to increase its investment in the Grasberg mine, which it regards as a strategic national asset.
42. [So, the answer to Andrew’s question was no. Rio Tinto will not apologise. In fact, it was Andrew’s fault that they sold their interest in Grasberg. They actually generously sold cheap as they knew they were passing on liabilities. And they sold to a truly responsible body, who we can be assured will honour all those liabilities. Won’t they? Oh, bother, they were the ones who invaded West Papua to get their hands on the deposit at Grasberg in the first place and imprison anyone displaying West Papua’s flag or being too active in the independence struggle. Oh, I’m so sorry, I’d forgotten that. Well, okay, I have helped finance the catastrophic pollution of an entire river valley and the brutal repression of people who complain about it, and I have helped turn an indigenous sacred mountain into a vast hole in the ground, but I’ve got no further liabilities as I sold them on to the people who gave me permission to do all that in the first place.]
43. Later in the meeting, Andrew Hickman phoned in a second time to try to extract a straightforward answer from the Chairman about West Papua – a valiant but hopeless quest. He pointed out that Simon Thompson had not answered his previous question. He said it is an ethical question. “If you had sold your operations in Juukan Gorge, would you not be saying sorry?” Although Rio Tinto had sold its interest in Grasberg, it was failing to take responsibility. “I am asking you an ethical question,” he said. “The company prides itself on being a responsible member of the community. Can you not see that there is a responsibility for what has been done at Grasberg beyond your involvement and beyond the life of the mine?”
44. Simon Thompson said that where the company is responsible it takes responsibility, for instance at the Holden Mine in the USA, which it inherited when it acquired Alcan. The mine closed in the 1950s and Rio Tinto never operated it but became responsible for closing it by acquiring Alcan. Grasberg is a long-life operating mine with many years of production ahead of it. Freeport is the operator. “We have sold the rights we had to a company owned by the Government of Indonesia. As I said earlier, the basis of that sale and the price received recognise that the state owned company would take over our responsibilities for closure and rehabilitation and any costs going forward, but this is not a legacy mine but an active mine which is a significant taxpayer in Indonesia, and the Government of Indonesia has always been clear about its ambition to acquire a bigger stake in the mine.” [And with that he again declined to take responsibility for Rio Tinto’s years of complicity in the catastrophic pollution of the Ajkwa river system and the brutal oppression of the indigenous people whose land was taken to construct the mine – like Pontius Pilate washing his hands at the trial of Jesus.]
Financial impacts of social failures
45. The next written question was from Councillor Doug Mc Murdo of Local Authority Pension Fund Forum (LAPFF). He said: “Working closely with mining companies over the past couple of years, I have noticed there is very little reporting by companies on the financial impacts of their social failures. Rio Tinto’s 2021 Annual Report suggests on p. 344 in footnote (t) that there has been a reduction of iron ore reserves of around 54 million tonnes in the wake of Juukan Gorge – is that correct? In light of this figure and other operational, reputational, and legal impacts of Juukan Gorge, what do you estimate the financial impacts to be to Rio Tinto and its investors? Would you be willing to report on the financial impacts of Rio Tinto’s social challenges in future reporting?”
46. Simon Thompson replied that the number that Doug McMurdo referred to is correct. As part of its new integrated heritage management plan Rio Tinto has reviewed all the heritage sites it manages, starting with those potentially impacted by its operations. Around 2000 heritage sites have been reviewed and ranked according to their significance, ensuring that the company does have the Free, Prior, Informed Consent (FPIC) of the traditional owners for any impacts on those sites and ranking them by the degree of that impact. Wherever there is any doubt about the significance of a site or confidence in the consent of landowners the company has taken the precautionary principle of reclassifying them as protected sites, and so it has ‘sterilised’ 54 million tonnes of ore where the licence to operate is unclear. There are about three billion tonnes of ore in Pilbara and 24 billion tonnes overall in Rio Tinto’s operations. The sterilisation of 54 million tonnes is therefore not very significant. It is reflected in the production guidance for the next year.
47. It is hard to put a number on the cost of social programmes the company has under way, he said, or the integrated heritage management plan it has in place, but all of those are things which the company should be doing anyway. There was no legal cost associated with the Juukan Gorge destruction as the operation was approved under the Aboriginal Heritage Act. He said that Rio Tinto should have gone beyond the law and protected the site but there is unlikely to be a legal cost. The potential impact of the revision of Aboriginal Heritage Act is still unclear but Rio Tinto’s operational guidance is to ensure it never has a repeat of Juukan Gorge.
Jadar lithium project, Serbia
48. Four questions followed on the Jadar lithium project in Serbia, from Zastitimo Jadar & Radjevinu / Protect Jadar and Radjevina (Serbia), Earth Thrive (UK/Serbia) and Eko Put/Eco Road (Republika Srpska). All the questions were more or less ‘edited’. In some cases, the omissions altered the meaning. Below, highlighted in bold italics, are the parts of the questions which were omitted when the company read them out. (You can assist Serbian colleagues in urging Rio Tinto to pull out of this project by sending an email to the company’s Chief Executive.)
49. The first question was the question from Eko Put from Bijeljina, Repubika Srpska, Bosnia, but it was attributed to Marija Alimpić (Zaštitimo Jadar & Rađevinu) Serbia.
(i) “Do Rio Tinto shareholders know that Drina is a transboundary international river that flows into a rich marsh ecosystem which is currently in the process of being legally protected, and HOW can Rio Tinto shareholders guarantee that groundwater and surface water pollution will not occur?! It is not a matter of IF the Drina waters will be polluted, but WHEN, and we ask once again how can you prevent it and provide us with firm GUARANTEES?”
(ii) “How do you plan to assure the preservation and cultural and spiritual use of current and future generations of significant archaeological, historical and religious heritage – dozens of sites spanning at least 3,500 years of settlement and history in the area – especially concerning the Bronze Age site within the planned mining area, and the important Church and its graveyard in the projected direct impact zone?”
(iii) “What are your exact plans to protect the rich biodiversity and natural landscapes in the area, as the mine is situated within a key water basin, and close to an area with international and national protected animals and plants?” [The second part of this question was modified. The submitted original read like this: “What are your exact plans to protect the rich biodiversity and natural landscapes in the area, as the mine is situated within a key water basin, and in proximity of Important Bird and Biodiversity Area “Cer” and Landscape of Outstanding Features “Cultural Landscape Tršić-Tronoša” with a vast number of internationally and nationally strictly protected and protected animals and plants?”]
(iv) “Why did you initiate the elaboration of the Spatial Plan to the Serbian Ministry of Construction, Transportation and Infrastructure in December 2016, years before you had the key information about the project: e.g. Ore Reserve Declaration (obtained in January 2021), the planned lifetime of the mine, the water use for the technical process, the exact location and volumes of the Tailing Storage Facilities?”
50. Jakob Stausholm answered, as he had visited the area and Simon Thompson had not. He said that Rio Tinto had discovered the lithium deposit at Jadar in 2004 and spent several hundred million dollars in progressing studies. The company was now progressing a feasibility study and in parallel the environmental impact study (EIS). Full answers were not available yet but would be when the studies were finalised. On the river, he said that there would be no impact in the case of water treated being discharged into the river. This is the full quote of his answer, delivered in a manner which suggested a certain amount of confusion or, at least, uncertainty:
51. “What you can say, first of all, on, on, the river, there will be no, ehm, there will be no, ehm, ehm… there will be no impact to the river that, that, that was mentioned, eh, before… eh, we are, eh, we will dis.. we will discharge, eh, only water-treated water into the Jadar River, and not into the other. Eh, our analysis, eh, indicates there should be no impact, eh, on the River in case of, eh, eh, water, water-treated, eh, disposal into the Jadar River.”
52.[Serbian colleagues point out that, first of all, the River Jadar flows into the River Drina some 20km downstream from the site, it cannot go anywhere else. Whatever happens in the Jadar must have an impact on the Drina. Further, one wonders what ”water-treated water” means? It is supposed to describe ”technical water” used in the ore processing, which will use sulphuric acid, sodium hydroxide and hydrochloric acid; however we have never heard this description.]
53. “We will follow the highest standards when it comes to cultural heritage management and project design to ensure no adverse impact on cultural heritage,” he said. When the company has finalised the EIS it will share it with stakeholders and it will not progress the project unless it can satisfy its high standards. He said he is enthusiastic about the project and encouraged further consultations when “we can provide further information before we sanction the project, which will probably happen late this year.”
54.[The fourth question about the Spatial Plan was not answered. Serbian colleagues note that this issue is central from the human rights perspective since the current land acquisition campaign is essentially running based on this document, which repurposed previously arable land into parcels for industrial use. The company is buying land before an EIA and Feasibility Study have been produced.]
Panguna copper mine, Bougainville
55. The next question was from Dina Rui of Jubilee Australia, proxy for Andy Whitmore: “In 2020, communities in Bougainville filed a human rights complaint against Rio Tinto in Australia about the legacy of the vast amount of mine waste left behind by the company’s Panguna mine, from which Rio Tinto divested in 2016. Communities report that the tailings have blocked parts of the river, causing widespread flooding of their lands, water pollution and destruction of their livelihoods and sacred sites. They have called on the company to fund an independent human rights and environmental assessment to identify risks posed by the mine and contribute to an independent fund to address these impacts on local people and assist with clean up. Given Rio Tinto’s recent commitments to ensure that it leaves a “positive legacy” (Stausholm 23.04.21) and to learn from its mistakes and rebuild trust with indigenous peoples impacted by its operations, will the company now publicly commit to funding an impact assessment of Panguna and addressing these devastating problems left by the mine?”
56. Simon Thompson said, “Thanks for that question, and again, perhaps for the benefit of shareholders who are not familiar with the history of Bougainville, this was a mine which was owned and operated by Bougainville Copper which is a listed company in Australia in which CRA had a 54% shareholding. Production at the mine started in 1972, and it continued until the civil war in Bougainville resulted in the operations being suspended in 1989, and at that point, all BCL staff was evacuated from the site. The civil war then continued for about nine years after the suspension of the mine. So the civil war came to an end in 1998, but even after the war ended the security situation was such that BCL was not able to resume the operations of the mine, so the mine was never closed. The mine was suspended in 1989 – more than 30 years ago, and no Rio Tinto personnel have had access to the mine since then. So to be clear, BCL did not walk away from Bougainville, it was in effect expropriated because of the civil war.
57. “Now the Human Rights Law Centre [in Australia] has made allegations that Rio Tinto is in breach of OECD [Organisation for Economic Co-operation and Development] guidelines and the UN guiding principles on business and human rights. It has filed a complaint with the [OECD’s] Australian National Contact Point [NCP]. We absolutely acknowledge the concerns expressed, and the concerns expressed by you about the human rights and the environmental issues in Bougainville and we take those allegations seriously. We are taking all the necessary steps to assess any involvement that Rio Tinto may have had in these adverse impacts. But what is very clear to us is that any lasting solution to this very complex legacy issue really does require the engagement of all stakeholders, and that obviously must include all of the local communities, the ABG [Autonomous Bougainville Government], the PNG [Papua New Guinea] Government, BCL and others. So we do hope that the Australian NCP will help to clarify this very complex history of Bougainville and we are working with other stakeholders to try and find a mutually agreed and lasting solution, and those discussions are actively ongoing as we speak.”
58. A reflection on the Chairman’s answer can be found on the website of our colleagues at Peace and Conflict Studies Institute Australia. Background to the issue can be found in LMN’s Cut and Run report.
Climate Change and COP26
59. Doug McMurdo, of LAPFF, asked a further question, this time about the company’s involvement on climate issues: “Thank you for the ongoing engagement with the Climate Action 100+ engagement group, which includes the Local Authority Pension Fund Forum. I’d also like to thank you for agreeing to votes at both 2022 AGMs on climate reporting in line with the Taskforce on Climate-related Disclosure. Could you share with us, what your contribution, as a FTSE100 company, is to the anticipated steel and aluminum global value-chain work to be highlighted at COP26 in Glasgow?”
60. Simon Thompson replied that the company is in active contact with the COP26 Champions leadership and engaged in a number of discussions with government and industry associations about how it can constructively participate in discussions in Glasgow. Jakob Stausholm is attending a CEO level meeting with the UK Government in May. Simon Thompson is a commissioner on the Energy Transitions Group and the company is involved with the Net Zero Steel initiative and talking to the Aluminium Stewardship Initiative about how the industry can contribute to COP26. He said he hoped to provide more detail in the coming months.
61. A written question from Felicia Olney noted that there had been “lots of grovelling apologies for the Juukan Gorge debacle but I still don’t understand how you allowed it to happen.”
62. Simon Thompson referred Felicia to the Board Review on the company website, about 18 or so pages long, which he said goes through all of the root causes of the “tragic events” at Juukan. But “rather than talking about the causes, we should focus on what we are doing about it and the steps we are taking to make sure it never happens again.” Simon Thompson would be visiting the PKKP people again in three weeks to discuss the remedy process. There is a moratorium on mining around Juukan Gorge. The company is working with the PKKP to monitor what is going on around the site, allow safe access to site and re-vegetate it. Artefacts recovered from the shelters have been transferred to a purpose built facility for storage and the company is in discussion with the PKKP about a permanent keeping centre for those artefacts. Rio Tinto is in discussion with the PKKP and others about modernising its agreements, especially removing gag clauses and any limits on heritage protection, and the company is happy to make those agreements public if traditional owners want that.
63. Rio Tinto has moved responsibility for relations with communities to the Product Group, he said, so they have the primary responsibility for all this, and frontline personnel are being trained to ensure they have all the skills they need for good decision-making. The Integrated Management plan has led to the sterilisation of 54 million tonnes of ore. Rio Tinto has invested 50 million dollars to accelerate the career development of Aboriginal Australians and to give Aboriginal Australians a louder voice in leadership and operations. The Aboriginal Advisory Group provides coaches and mentors for senior management to help them navigate their way through the renegotiation of agreements. “If our actions on the ground are not consistent with policies, they will pick this up,” he said.
64. Independent Director Megan Clark, Chair of Rio Tinto’s Sustainability Committee, said she would explain how the company is improving governance and oversight and how it is going to check it has the right behaviour on the ground. She said that management of this now mirrors the company’s safety model, which is working well. Standards and guidance are the foundation, she said, but are not enough, as they must be applied consistently on the ground. The Sustainability Committee conduct ‘deep dives’ [what?] to ensure policies are being implemented. Heritage considerations are being integrated into mining planning. The primary responsibility for relations with traditional owners sits with managers of the company’s assets, as Aboriginal people have said they want contact with operational managers. New experts are being brought in to improve the company’s social expertise. The Sustainability Committee will check periodically. The Internal Audit Team will make sure standards are being applied. Independent audits will also be brought in. “How do we make sure those changes are effective on the ground?” she asked. “We will at all meetings make sure that we have effective management and controls over community risks.” The Sustainability Committee is revising the progress of the implementation of the recommendations from the parliamentary inquiry and checking on the progress of reform with the company’s Iron Ore department. The Committee is setting up an audit of global performance risks. The plan allows immediate escalation of approvals to the CEO or even Board level where necessary. So far this has not been necessary after a review of over 1000 heritage sites. She said that as Chair of the Sustainability Committee she would be returning to Pilbara to check on progress. Jakob Stausholm would be part of some of these visits. An Indigenous Advisory Group was being put together. Management are looking at what has been recommended in the parliamentary inquiry and will implement a plan across the whole company and an audit of global risk. The company will report on progress when it reports financial results.
How many of us are here? And are people safe?
65. The final written question was from Philip Clark. He asked how many shareholders had joined this virtual meeting. How does it compare with a normal meeting? What can Rio Tinto do to improve safety even more? Can it share its experience with the industry more widely?
66. Simon Thompson said that currently 35 shareholders were on the line and typically at a physical AGM there would be 150 to 200 present. It may be that others were listening in but this was the number of shareholders.
67. Jakob Stausholm said that he was proud of what Rio Tinto had delivered in its safety performance. What is the reason for the strong performance? In Rio Tinto, safety is deeply in the values, hearts and minds of the staff. The leadership team is committed to doing better, working on safety maturity models. Rio Tinto wants to be very transparent about it. It is learning from other industries.