Pressure mounts over mining firms as investors raise the bar on tailings dam practices

A group of investors overseeing $25 trillion has decided to take action against mining companies that have not adopted safety environmental standards for the construction and maintenance of tailings dams. 

Tailings dams are structures used in mining to store waste. The investors have demanded that if a mining company doesn’t agree to follow these best practices, they might vote against the company’s leadership at their upcoming annual meetings. 

The launch of the Investor Mining and Tailings Safety Initiative took place in August 2020, as a direct response to the Brumadinho disaster in Brazil, wherein 270 lives were lost due to the collapse of a tailings dam.

Currently, 77 mining companies, including giants like BHP and Rio Tinto, have agreed to follow a stricter code of conduct. 

This code aims to ensure safer practices around tailings dams, which store mining waste. 

However, 126 companies, mostly smaller ones, haven’t committed to these standards yet. This puts their shareholders, insurers, and banks at higher risk, according to Adam Matthews, the chair of the investor group.

“It’s still concerning that you’ve got over 100 companies that … haven’t been responsive to the engagement we’ve been doing,” said Matthews, who is also Chief Responsible Investment Officer for the Church of England Pensions Board, a member of the investor group.

“We will be voting against the chair of the company … and we’ll also consider filing a shareholder resolution as well,” he said. 

He added that other participants in the initiative might take a similar stance but would independently decide how to cast their votes.