The report, published by research organisation Trucost, studied the financial and environmental reporting of thirteen of the largest metal miners looking for discussion and disclosure of environmental issues in order to establish whether superior environmental performance was being rewarded by shareholder value, and whether more transparent reporting would reduce risk for companies and investors alike.

It comes in the wake of recent allegations of mercury and arsenic pollution against Newmont Mining Corp in Buyat Bay, Indonesia. Five Newmont employees were imprisoned in Indonesia for over a month while independent studies were conducted.

Despite the case, Newmont s share price was largely unaffected as the company announced a 33% increase in reserves in Ghana outweighing the environmental issue in the minds of many investors.

Trucost s study asks whether more transparent reporting would reduce risk for investors and companies and whether Newmont s managers could have been spared imprisonment if studies of the heavy metal load had been conducted and published as a matter of course.

Its key findings were:

  • Relative company valuations are not well correlated with environmental disclosure and performance levels;

  • Conversely, there is no evidence to substantiate the fear that transparency leads to equity discount;

  • Investors are not adequately informed about key risk areas, particularly heavy metal emissions and the management of tailings dams.

    It recommends the establishment of an industry wide standard for the management and monitoring of tailings dams as this would benefit the most responsible operators.

    It says investors are missing an opportunity to use the level of environmental disclosure as an additional indicator of overall management performance and therefore providing few incentives for mining companies to be more transparent about their environmental performance.

    An online library for all those working to improve the sustainable development performance of the mining and metals sector has also been launched by the International Council on Mining and Metals in partnership with the UK s DFID, UNCTAD and the UNEP.

    It will provide information on a range of topics including regulation, metals use, human rights and risk management and will be particularly useful for designers, operators and regulators of mining and metals facilities.

    By David Hopkins

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