TORONTO (miningweekly.com) – As the bear market endures, cash-strapped companies might be forgiven for reducing their corporate social responsibility (CSR) plans and curtailing the level of their community engagement. For others, more must simply be done with less.

Some might say this is unglamorous work, while the misguided few might complain it is a waste of time. But in Canada, even during the tough times, CSR, consultation and sustainability programmes are essential for success. Companies that fail to engage with these principles risk a project’s later failure. 

BAR RAISING

One company aiming to raise the bar with its CSR programmes, community engagement and environmental sustainability is Avalon Rare Metals, which is developing the Nechalacho rare earth elements project, located at Thor Lake, abound 100 km south-east of Yellowknife, in the Northwest Territories.

Effective August 2013, Nechalacho had measured and indicated resources for the Basal Zone at 61.9-million tonnes, grading 1.64% total rare earth oxides and 0.35% heavy rare earth oxides. 

Working and consulting with local First Nations has been a priority for Avalon. “We started engaging with the communities before we even started doing any physical work,” Avalon president and CEO Donald Bubar told Mining Weekly Online. “Engaging early is important because it takes some time to develop a relationship.”

“[Indeed,] the main mistake companies make is not starting early enough,” he said. “They wait until told by the government that they need to engage with the aboriginal communities. If you do that, then it’s typically too late. The reaction from a First Nations community will be: ‘well why didn’t you come and see us two years ago?’”

“You should get to know the local leadership and community at a grassroots level,” he added. “Explain what you are trying to do and demonstrate goodwill by participating in and supporting community events wherever you can. Essentially, your aim is to become part of the community.”

Being part of the community also means generating chances for work. “We’ve tried to create employment opportunities at the site as early as possible. For example, half the people on site during the exploration stage were aboriginal,” Bubar said.

“Avalon now has a plan to initiate training programmes in partnership with the government. We aim to create as many employment opportunities as possible for the local aboriginal communities once the project is operational,” he added.

In addition, the company has laid the foundations for aboriginal communities to obtain an equity participation in the project.

“The model we’ve tried to deploy from the start is one of equity participation in the project,” Bubar said. “There are three communities in particular that have the most traditional use of the land and we’re working closely with them. The three groups can take a collective 10% equity stake in the asset and then share it among themselves.”

“However, an agreement must be [separately] sought with each of these communities and they each have their own approach and ideas,” he explained. “One of the three communities has now committed itself to the accommodation agreement that contemplates the participation arrangement.”

“We’re still trying to get to the finish line with the other two communities and complete similar agreements with them,” he said. “Of course they don’t have to agree if they don’t want to. But we think it’s in their best interest as it creates a real asset that can then be leveraged by the First Nation to participate in other mineral ventures happening in the area.”

“It also affords more opportunity to participate in the project’s long-term upside as it grows in size and creates more value for the equity owners,” he added.

Bubar believes that equity participation agreements with aboriginal communities will become increasingly important and increasingly common in Canada.

“These participation agreements between companies and communities are going to evolve over the longer term [and it’s a model] that’s starting to get looked at in other parts of the country,” he said. “I believe it’s the future of the industry.”

RESPONSIBLE AND SUSTAINED

Avalon passed a major milestone last year, achieving approval at the environmental assessment stage.

“The environmental assessment is complete. We received the report of assessment from the regulatory body, the Mackenzie environmental impact review board, last July and they recommended approval by the responsible Ministers. We obtained that approval in November,” Bubar said.

“This has allowed us to proceed with formal permit applications that are in motion now,” he said. “With the environmental assessment in place, our timelines are better defined. At present, we should be able to get the permits we need in place by mid-2014.”

A central platform for Avalon in relation to the environment has been the importance of sustainability in both its planning and operations. “From day one, we realised that a business seeking to produce material for clean technology must [recognise] the importance of doing things in a socially- and environmentally responsible way,” Bubar said.

“We realised that it was to our long-term benefit to demonstrate this by producing a GRI- [Global Reporting Initiative-] compliant sustainability report,” he added. “[The report] demonstrates our commitment to developing this operation in a responsible and sustainable way.”

“[In addition,] customers want to make sure the raw materials are being produced in a sustainable way and that the mining company operates to the same standards and principles they do when it comes to social and environmental responsibility,” he said.

“[Avalon’s sustainability programme] has meant a lot of outreach to the public, educating people on what rare earths are and what the risks and opportunities are,” he explained. “It’s also about engaging government and academia to [facilitate] research in this area and how Canada can take more advantage of its natural resource endowment, particularly in these commodities.”