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S&P Releases ESG Industry Report on Metals and Mining Industry

 

 

By Melanie Burton

February 12, 2020 - S&P Global ratings on Wednesday released its first scorecard for metals and mining companies that rates them on their environmental, social and governance (ESG) credentials, an area of increasing focus for investors.

Coal mining is the most heavily exposed subsector, as global demand for coal is expected to peak in coming years with more adverse policies expected for coal-fired power, which emits roughly twice as much greenhouse gas as all gasoline burned. 

The mining industry has "well-above-average" exposure to environmental risks, resulting from land use, waste, pollution and water usage. Techniques such as heap leaching or the use of toxic fluids like cyanide and sulphuric acid can be devastating if there are leaks. Low probability events like tailings dam failures as seen in Brazil also have a severe impact. 

Metals production also has "well-above average environmental exposure" for example high green house gas emitting blast furnaces used by the steel industry. 

Main social tensions arise from safety and local labour relations and from the impact on communities of pollution, water or land usage conflicts and economic or landscape impacts.  

    

Selected global miners and S&P's ESG ratings*

   * Ratings below BBB- are regarded as non-investment grade

 BHP Group                                     A/Stable/A-1

 Rio Tinto PLC                                 A/Stable/A-1

 Codelco                                          A+/Negative/--

 Glencore PLC                                 BBB+/Stable/A-2

 South 32                                         BBB+/Stable/A-2

 Newcrest Mining                            BBB/Stable/--

 Anglo American                              BBB/Stable/A-2

 Barrick Gold Corp.                         BBB/Stable/A-2

 Teck Resources Ltd                        BBB-/Stable/--

 Aluminum Corp of China (Chalco)  BBB-/Stable/--

 Zijin Mining Group Co                     BBB-/WatchNeg/--

 Alcoa Corp                                      BB+/Stable/--

 Alliance Resource Partners            BB+/Stable/--

 Fortescue Metals Group                 BB+/Stable/--

 Freeport-McMoRan                        BB/Stable/--

 PT Vale Indonesia                          BB/Stable/--

 Yanzhou Coal Mining                     BB/Stable/--

 Arch Coal                                       BB-/Stable/--

 Peabody Energy                            B+/Stable/--

 China Hongqiao Group                  B+/Positive/--

 PT Bumi Resources                      CCC+/Stable/--