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Rio Tinto wrangles investors over water contamination claims

Worldwide mining giant Rio Tinto, which sparked outrage after destroying an ancient Native website in Australia in 2020, faces new pressure from socially mindful investors and loan providers, this time on water practices at two of its mines.

A group representing UK pension funds, Local Authority Pension Fund Forum (LAPFF), has actually raised concerns about the business's water management at its Oyu Tolgoi copper mine in Mongolia and an ilmenite mine in Madagascar.

It's a burr in the saddle for CEO Jakob Stausholm, who was brought in to bring back the business's social license after it blew up an Aboriginal rock shelter at Juukan Canyon.

Questions around Rio Tinto's ecological credentials might complicate its efforts to secure federal government approvals to construct a. lithium mine in Serbia and dig a giant copper mine in Arizona,. both tasks long postponed by local protests.

Rio Tinto already has substantial reputational threat. coming from Juukan Canyon, so its water difficulties in. Madagascar and Mongolia (as 2 pressing examples) pose a huge. risk of further reputational damage, LAPFF Chair Doug McMurdo. told .

Given growing occurrences of lawsuits around water. management worldwide and tougher regulations entering place,. these challenges are also a highly financially material concern,. he said.

Rio Tinto stated it identified the value of water to. its host neighborhoods which it was dedicated to driving. efficient water stewardship and enhanced transparency for. stakeholders.

LAPFF, whose members hold more than GPB 350 billion. ($ 445 billion) in UK pension funds, has actually been attempting to develop. assistance for a resolution that would press Rio Tinto to carry out. independent water effect assessments at its mine websites.

There is a sense that companies have been greenwashing and. that they need to face a reckoning. Shareholder resolutions are. an excellent way to bring that numeration, McMurdo stated, speaking. about business in basic. Water practices in the mining. industry were of specific issue, he said.

Rio Tinto was graded an F by environmental advisor CDP for. stopping working to reveal its water data to the group since 2016. Other significant miners, too, have actually been offered fail scores for. non-disclosure.

TAILINGS SEEPAGE

LAPFF distributed an investor instruction late in 2015 that. said Oyu Tolgoi's copper operations have impacted ground water. quality outside the mine lease and questioned whether its. tailings dam was watertight.

Civil society group Responsibility Counsel, which works. with Mongolian herders, told that some animals became. ill and passed away after mine operations began, which herders blame on. getting worse water quality.

Their concerns have actually not been effectively addressed by Rio. Tinto, it said.

Rio Tinto said Oyu Tolgoi has a rigorous water monitoring. program in location and outcomes were consistently shared with. communities, lending institutions, regulators and in public reports. It stated. it is acting to repair the seepage.

The seepage has not affected the water quality of herder. wells or of any users to any extent as verified by tracking. data, Oyu Tolgoi said in a November 2023 report.

was not able to quantify the variety of livestock. impacted or whether they died as a result of bad water quality.

However, the seepage which has actually been continuous because 2018 has. been declared an ecological event by the job's. loan providers, that include the European Bank for Restoration and. Development (EBRD), Oyu Tolgoi said in a report in November.

That requires the Oyu Tolgoi mine to undertake a remedial. action strategy.

To be sure, lending institutions are not likely to pull funding for the $7. billion job, however given the valuable nature of water in the. arid region, EBRD spokesperson Anton Usov said the bank is closely. monitoring Rio's restorative action strategy.

Lenders need to guarantee that OT is held accountable for its. failure to abide by loan providers' social and environmental. structure, stated Julio Castor Achmadi, neighborhoods associate of. Responsibility Counsel.

In Madagascar, a local advocacy group says tailings dam. failures in 2010, 2018 and 2022 at Rio's QIT Madagascar Minerals. ( QMM) ilmenite mine, which produces titanium dioxide for paints,. have worsened water quality, contributed to fish deaths and. spurred conflict in the Anosy area.

The Andrew Lees Trust is pushing for independent audits ... in order to offer the transparency and responsibility needed. to resolve the existing QMM difficulties and fulfill global. requirements.

Rio Tinto stated it had compensated local fisherfolk, that an. independent report it commissioned found no conclusive link. in between its mine activities and observed dead fish, and it has. supported regional leaders and authorities to solve discontent.

INDEPENDENT REPORTS QUESTIONED

In both locations, LAPFF and advocacy groups say Rio. Tinto's water audits don't provide the complete picture of the impact. of its operations.

Critics of Rio's prepared mines in Serbia and Arizona say. they are also stressed over the business's practices, according. to the financier rundown.

The pension fund group chose to hold back filing its. proposed resolution up until April 2025 after Rio Tinto engaged. with it and acknowledged in a December report that it could do. better at its Madagascar website.

In the Madagascar report, Rio Tinto said it recognised. greater openness and equity around its water management was. required.

We should address these issues, Rio Tinto stated.

(source: Reuters)