The second segment of our Building Shared Value series turns to the operational heart of the industry: sustainability. The report, ‘Building shared value propositions in the mining industries,’ by formerVale Base Metals Chairman Mark Cutifani and Michelle Michot Foss from Rice University’s Baker Institute for Public Policy, together with support from the Future Minerals Forum (FMF) makes clear that shared value cannot be achieved without embedding responsible practices into every stage of mining.
Starting from the premise that “mining operators harvest natural resources for beneficial use and contribute to ‘nation building’ by providing both raw materials and spurring expansions of infrastructure,” the report argues that sustainability must be embedded into this role.
Mining.com.au secured the first joint interview with Cutifani and Foss to unpack the drive behind this report and its key findings. Their insights highlight how embedding sustainability into every stage of mining is not optional, but essential, shaping the frameworks, practices, and innovations that will define the industry’s future development.
The report opens by outlining the ideas of a shared value proposition for the mining industry, which is one that incorporates broad sustainability concepts and the fair allocation of benefits across commercial frameworks.
At its core is the principle that all value begins upstream, and that commercial frameworks must incorporate sustainability. The licence to operate hinges on responsible governance and resilient practices, while commercialisation can go ahead only once resources are shown “to be technically recoverable at prevailing prices”.
The report notes that sustainability is too often narrowed to a sole focus on the environment and emissions, while the social and governance aspects of environmental, social, and governance (ESG) principles are poorly defined and lack clear metrics. It also notes that sustainability must be intertwined with the commercial and financial outcomes of an operation, as these provide the backbone for success. With that in mind, the authors stress that sustainability should be established as an economic concept centred on seven key pillars: safety and health, environmental protection, social performance, talent, sustainable resource and production base, unit operating costs, and strong balance sheets that ensure optionality.
The report underscores that sustainability is not a side metric, but the economic foundation of mining’s shared value proposition. By embedding the seven sustainability pillars into upstream operations, miners can secure licence to operate, align interests across governments and communities, and build resilience against market volatility.
For Cutifani and Foss, the path forward is clear: sustainability must be treated as a commercial framework, not an afterthought, if mining is to deliver lasting value to societies and global supply chains.
Cutifani stresses that the industry has made significant progress in defining key operating standards focused on sustainability and reducing the negative impacts of operations.
“When we talk about responsible mining, in my experience, I’d say that probably 70% of the world’s operators are working in that responsible category with two-thirds of the remaining getting there,” Cutifani says.
It’s one thing to talk about responsible mining, though, and something else to demonstrate to the communities in which you are operating that sustainability is embedded in your company and that there can be value-add for a local community. That value-add, Cutifani argues, essentially boils down to modern society and the ways in which mining underpins life for everyone on Earth.
“The first response from communities is usually ‘not-in-my-backyard’,” Cutifani says.
“For us to build a case and convince local communities that we’re worth working with, we’ve got to demonstrate a value proposition that uplifts and provides communities with something they don’t have.”
Efforts have been hit-and-miss, Cutifani notes, which is why reports such as this are important in telling the broader story of the industry, explaining its societal impacts, and demonstrating the shared value it can deliver into communities across generations.
That said, sustainability cannot exist in isolation. It must be tested against the relentless cost pressures that define the industry.
Cost pressures and the sustainability imperative
While the report frames sustainability as the backbone of mining’s shared value proposition, the reality is that these principles must operate within a sector defined by relentless cost pressures.
Rising input inflation, deeper ore bodies, regulatory demands, and responsible sourcing requirements all shape the economics of mining. To understand why sustainability cannot be treated as a side metric, the authors note that it’s essential to examine how structural pressures can drive the need for innovation, efficiency, and resilience across operations.
Cutifani notes that rising costs require a fresh approach to execution and operations.
“Innovation, change, and improvement are a way of life for us,” Cutifani says.
“Just to keep up, we have to reduce our costs between 7–13% each year. This industry is aggressively competitive, so your ability to innovate is key to actually keeping the lights on.
“We need to be successful for society to be successful.”
Cutifani’s comments underscores the resilience needed to be successful in this industry. Projects can take decades to develop, and with costs rising, innovation is one of the only ways to keep up and ensure a company’s survival.
The authors note that the industry is not asking for sympathy or an easy path forward on cost pressures, saying it is the industry’s job to support society and improve people’s lives. While costs rise, the industry must still play its role in fulfilling its obligations to communities.
“In the last 10 years, we’ve lifted a billion people out of poverty because a range of industries and players are doing a better job, but there’s still more than a billion people in poverty and a lot more work to be done,” Cutifani says.
“We’re here to help each other make the world a better place, and mining has a critical role here. We, like everyone else, have to be competitive, we have to keep improving or someone’s going to replace us, as they should.”
The authors point to large-scale forums like the FMF, PDAC, Mining Indaba, IMARC, and the World Mining Congress, where there are broad calls to the industry to advance innovation and sustainability in tandem.
Foss notes that she has been involved in the industry since the late 1970s and has noted a significant evolution during that time. While the mining industry is trying its best to embrace pressures on advancement and innovation, there are still segments that need improvement.
“Right now, we’re working to get [the] government and industry on the same page,” Foss says.
This links back to part one of this Building Shared Value series, which highlights the imperative of collaboration across governments, industry, and society to secure mining’s role in our shared, sustainable future.
The authors note that lectures and preaching on the importance of mining do not help to change people’s attitudes about the industry. Demonstrating the shared value through sustainable benefits for communities is where the impacts come to light.
Communication is key and that is what Foss and Cutifani are focused on through both the report and their collaboration with FMF.
Foss notes that these are not always easy conversations to have; there are many different players involved, long timeframes, and changing realities across the life cycle of a project.
“How do you shepherd the economic value that you’ve created as the project was getting off the ground and reaching its potential and make sure that those investments are being used the right way with an eye to future generations and future needs as projects retire,” Foss says.
The rising costs associated with structural inflation and competitive pressures demand constant innovation from the industry, but they also highlight why embedding sustainability into commercial frameworks is essential. By treating sustainability as both an operating standard and an economic foundation, miners can navigate volatility, secure licence to operate, and deliver lasting value to communities and supply chains.
These rising costs make optionality not merely a strategic choice but a mechanism through which miners can adapt to shifting market dynamics.
Building optionality and engaging the next generation
The conversation around sustainability and cost pressures naturally leads to the question of how miners can build resilience and optionality into their strategies.
Cutifani points to the metals value chain as a source of untapped flexibility, noting that margins can be lifted significantly by rethinking mine design, commodity behaviour, processing, and marketing strategies. Digitisation and AI are opening new pathways to optimise across the full value chain, with the potential to generate additional returns from every asset, even those once considered marginal.
Foss adds that governments want to see the most efficient, best-run, and optimised businesses operating in their countries. However, during her time in the mining and oil and gas industries, she has seen too many case studies in which governments have implemented programs or rules that directly counter those goals.
Rising costs drive the need for optionality as the industry adjusts to changing market dynamics. This also underscores the importance of creating investment-friendly commercial frameworks that allow a multitude of players, from early-stage explorers to global majors, to deploy capital efficiently across market cycles.
As Foss notes, mining thrives on diversity. Restricting participation undermines innovation and resilience, while competitive environments should welcome participation from all levels to help drive projects through volatile markets.
“I don’t think that we want to send a message that in our conversations around frameworks, commerciality, optionality, flexibility, and sustainability, that there are dictates around participation,” Foss says.
Still, frameworks alone will not secure the industry’s future. Engaging the next generation of talent is essential to carry innovation and sustainability forward.
Equally critical to that participation drive is engaging the next generation. Cutifani and Foss emphasise that mining is more than shafts and pits; it is an ecosystem spanning investment, technology, and sustainability. Yet, in Western contexts, complacency has dulled student interest.
The basic reality that the world needs more metals should underpin discussions in higher education.
“Everyone needs these materials and that also means capturing those resources and utilising them in the best ways, making good decisions, and using critical thinking about resource use. It also requires a strong technical knowledge base,” Foss says.
“You can’t innovate if you don’t understand the basics.”
In the end, rising costs and structural pressures make clear that mining’s future depends on resilience built through optionality, open investment frameworks, and a new generation of talent.
Taken together, these themes show that sustainability, cost resilience, optionality, investment diversity, and youth engagement are not separate challenges but interconnected pillars of mining’s shared value proposition.
By fostering diverse participation, enabling flexible commercial environments, and instilling purpose and technical excellence in young professionals, the industry can navigate volatility while embedding sustainability at its core. This is how mining secures its licence to operate, delivers shared value, and ensures its role in powering societies for generations to come.
Write to Amy Rotman at Mining.com.au
Images: Mining.com.au
