Kingsrose Mining's 'deliberate, early stage' approach

Article Courtesy of : mining.com.au

Author: Angela East

While the mining industry has come a long way with its environmental, social and governance (ESG) efforts, there is still a large gap between the majors and the juniors. But one small explorer is demonstrating that ESG can be a priority across the whole exploration, development and mining chain.

Kingsrose Mining (ASX:KRM) recently released its maiden sustainability report for the 2024 financial year integrating its sustainability progress and goals into its exploration activities.

The report covers key ESG themes identified through a preliminary double materiality assessment. This includes topics like biodiversity, Indigenous rights, water stewardship, closure and rehabilitation, community engagement, and governance structures such as anti-bribery and safety systems.

Managing Director Fabian Baker says the report communicates the company’s intent, strategy, and accountability.

“For investors, regulators, and local communities, it provides a transparent view of our progress and a roadmap for the future,” Baker tells Mining.com.au.

“It’s a reflection of our belief that long-term exploration success and sustainability performance are intertwined.”

Companies like Institutional Shareholder Services (ISS), MSCI and Sustainalytics provide ESG ratings for several ASX-listed companies.

Research firm ISS says ASX-listed mining companies exhibit relatively low environmental and social performance scores.

Of the companies covered by the ISS ESG Corporate Rating, less than 5% scored above 50 – the level that identifies Prime-rated issuers – for environmental, social and overall ESG performance.

The average ESG performance score for 57 Australia-based explorers and producers averaged 19.7 and 30.3, respectively. The key issues facing these companies are human rights, labour rights, the environment and corruption.

ISS says the difference in average ESG scores between already producing companies and exploration companies based in Australia is notable.

“This difference is due to the limited scope of disclosures by exploration companies, which tend to lack sufficient quantifiable risk data,” the firm says.

While the industry has made big strides in the past decade, according to Kinsgrose, it is predominantly the majors that have introduced full ESG teams, science-based targets and climate risk disclosure.

Baker notes there is still a major gap between large cap operators and the juniors that often operate at the frontiers of a discovery.

“The challenge is that juniors control a significant portion of the global exploration pipeline,” he says. “If we don’t support sustainability at that early stage, we’re missing the opportunity to embed ESG principles from the start.

“So while the majors are doing better, the ecosystem as a whole needs to lift, particularly in greenfields exploration.”

Pioneering ESG at ground level

Baker adds that while sustainability reporting is still uncommon in the junior exploration space, Kingsrose takes a different view.

“As a technically led exploration team across culturally and environmentally sensitive jurisdictions, we believe trust must be earned and earned early, not once a mine is built,” he explains.

“Transparency builds trust, and for us that’s essential to maintaining social licence, reducing permitting risk, and attracting aligned capital partners.

“If we want to explore and ultimately develop mines, we need to be able to clearly demonstrate that our values align with those of our rightsholders and stakeholders.”

Kingsrose has a portfolio of platinum group elements, nickel and copper projects located in Finland and Norway.

Baker says Kingsrose has taken a very deliberate and early stage approach across all three ESG pillars.

To oversee its ESG strategy, the company has appointed a head of sustainability to its senior leadership team.

“Right now, sustainability is tightly integrated into our exploration function and corporate development, which ensures it is not siloed but rather embedded into every major decision,” Baker explains.

“As our stakeholder and rightsholder expectations increase, we will continue to build out the team as necessary.”

Environmentally, Kingsrose is embedding biodiversity baseline assessments, ecological field surveys and water quality sampling into the earliest phases of exploration, long before resource definition.

On the social front, the explorer is “deeply engaged” with the Sámi people in Norway and the wider communities to progress initiatives like co-designed benefit sharing and grievance mechanisms in local languages.

Kingsrose documented over 50 Indigenous engagements in the 2024 financial year and has started quantifying the local economic impact, having spent more than $1.2 million within the local communities in the last financial year.

With respect to governance, the company has implemented policies on anti-bribery and corruption, established corporate and project-specific risk registers, and integrated safety systems across its operations.

To monitor these areas, Kingsrose undertakes daily field hazard assessments, has in place emergency response plans, and has established a dedicated Health and Safety Committee.

“We’re building a strong internal culture of accountability, ethical conduct, and continuous improvement, underpinned by training, policies, and a commitment to transparency,” Baker explains.

From drill bit to climate fit

For small cap explorers to improve on sustainability reporting, Kingsrose notes the three key things needed are capacity, consistency and collaboration.

According to Baker, many juniors lack the internal resources or bandwidth to build a sustainability reporting function.

This could be helped by targeted funding support, templates and technical assistance.

Baker suggests the industry requires a clear and fit-for-purpose reporting framework specifically for explorers.

“Something scalable and not overly burdensome would help companies report in a way that’s both meaningful and achievable,” he says.

Meanwhile, shared knowledge platforms and partnerships with industry groups, majors or cross company working groups can help spread best practice and reduce the cost of entry for smaller players.

Under the Paris Agreement, countries have committed to reaching net-zero emissions by 2050.

While several large mining companies have outlined their policies to help the world reach that target, again it is less common among the smaller explorers.

But again this is where Kingsrose aims to set a precedent with the drafting of a Climate Change Policy and preparations for a greenhouse gas emissions inventory, which covers everything from vehicle emissions to contractor activities.

While Baker believes the 2050 net-zero emissions target is ambitious, he says it is achievable with the right incentives, technology, and accountability.

“The mining sector will play a pivotal role in the energy transition, but that doesn’t exempt us from action. In fact, it demands leadership,” he explains.

“For explorers, our emissions footprint is smaller, but the foundations we lay today, data, policies, procurement choices will determine our ability to scale responsibly in the future.

“Getting our systems in place now is the only way we’ll be able to credibly align with a net-zero pathway later.”