Economic interests are set to play an increasingly important role in shaping development in the Arctic. Yet prominent members of the mining industry, familiar with the economic and reputational perils of impatient investment, remain cautious. They can – and should – play a pivotal role in guiding responsible industrial activity in the region.
Corporate development of the Arctic appears to be a foregone conclusion and this is reflected by the development of major transnational agreements. For example, with Arctic shipping projected to increase massively in the coming years, the UN Maritime Safety Committee (MSC) will adopt the Polar Code, international guidelines for the safety of ships operating in polar waters.
On the back of such recognition, countries are making longer term economic commitments. China, for instance, has just agreed to purchase oil and gas from the Russian Arctic over the next decades, while at the same time having secured stakes in Russian oil platforms in the region.
The Arctic is rich in oil, gas, and metals such as nickel, copper, gold, uranium, or tungsten. It even has large diamond reserves. Rapidly shrinking sea ice exposes new shipping routes through the Arctic Ocean that will save time and money for companies moving goods from Asia to Europe, while also providing new opportunities for tourism and fishing.
Strong leadership
Mining companies have a big opportunity here, and some of the planet’s northernmost mines are already making an impact. Alaska’s Red Dog mine is one of the world’s biggest producers of zinc and lead, whereas Greenland’s Ilimaussaq complex is estimated to meet a quarter of global demand for rare earth elements, critical components in a wide range of electronic devices, over the next 50 years. With Arctic mining in its infancy, many non-Arctic states, including China and the UK, are lining up to invest in future projects.
In spite of these riches, mining companies, particularly the mega-multinationals such as BHP Billiton or Rio Tinto, remain cautious about the Arctic. This is partly because mining companies have had their fingers burnt by high-profile environmental accidents, such as the 2006 lead poisoning of the Australian town of Esperance or the discharge of over two billion tons of untreated mine waste, over nearly three decades, into the Ok Tedi river in Papua New Guinea.
Mining accidents have also killed or disabled workers. For example, around 170 miners are killed each year in the South American gold industry. Expensive mining projects built in a hurry have hit the industry’s reputation.
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