By Clyde Russel

LAUNCESTON, Australia (Reuters) – Rio Tinto’s decision to release a self-defeating report on its work culture is set to be a watershed moment for a broader mining industry aiming to be seen as the “good guys”, helping to drive the global energy transition.

It was undoubtedly a brave move by Rio, the world’s largest iron ore miner and one of the world’s leading copper producers, to release a report that makes for extremely uncomfortable reading, exposing a culture riddled with sexual harassment. , bullying and racism.

But the big question for Rio and its peers such as BHP Group, Anglo American, Glencore and Vale, is what the industry is doing to solve the problems, and how will it build a future workforce? who considers himself proud to be part of the solution to climate change.

And the problem for the broader commodity markets is that regardless of how miners react, any solution is likely to be costly, eventually fueling the prices of metals such as copper, lithium and nickel, all vital for the renewable energy needed to achieve net zero carbon emissions.

Rio Tinto chief executive Jakob Stausholm called the February 1 report “disturbing” and pledged to implement the 26 recommendations of former Australian sex discrimination commissioner Elizabeth Broderick.

The report showed that nearly half of all employees who responded to the external workplace culture review had experienced bullying, while nearly 30% of women and around 7% of men experienced sexual harassment, with 21 women reporting rape or attempted sexual assault.

Obviously the short-term involvement is going to be an intense focus on improving Rio’s workplace culture, particularly in remote mining sites such as the Pilbara part of the state of Western Australia. , home to the company’s main iron ore mines.

But the longer-term implications are likely to be deeper.

It would be reasonable to assume that the issues raised are not limited to Rio and that the mining industry in general suffers from the same problems.

That means CEOs in Rio’s peers and competitors are likely already scrambling to see how their own homes are breaking down and developing action plans to address their own workplace issues.

The issue is now firmly on investors’ radar screens, with pointed questions likely to crop up at shareholder meetings.

How the industry responds will be vital, and Rio’s report is undoubtedly a hammer blow to its image.

It couldn’t come at a worse time, as mining companies desperately try to lure young people into the industry.

WORK IS THE KEY

A simple internet search for “lack of mining engineering students” yields a plethora of articles, dating back many years, but becoming more prevalent lately.

One such article from the Australian Broadcasting Corporation from August last year highlighted steps mining companies are prepared to take, including offering free bar tabs to students at the School of Mines in Western Australia.

A student said he received six job offers and eventually settled for a position paying more than A$110,000 ($78,100) a year for eight days on and six days off at a gold mining company .

This starting salary compares to the median annual income of AU$83,000 for an Australian with a postgraduate degree in 2020.

In other words, mining companies have to pay handsomely to get the few students available.

Yes, they can invest more money in scholarships and pay even higher salaries, but ultimately young graduates will go to work for companies with a culture and a mission they can relate to.

This is the biggest challenge for mining companies, convincing potential employees that they are employers of choice and an integral part of the march to net-zero global carbon emissions.

A recent report by the International Energy Agency estimated that meeting the goals of the Paris climate agreement will require, over the next two decades, that the share of clean energy in demand of metals reaches more than 40% for copper and rare earths, 60% for 70% for nickel and cobalt, and almost 90% for lithium.

This implies that the mining industry is going to have to scale up significantly in the coming years, and it is likely that labor shortages will climb up the list of top concerns for business leaders.

The questions for industry, and for the wider community driving the energy transition, are what will it cost to attract workers to mining, how can it be done, and what will happen- if industry continues to fail to create workplaces of choice?

(Views expressed here are those of the author, columnist for Reuters.)

(Editing by Clarence Fernandez)