Mines R Us

Mines R Us

Report of Risks and Opportunities

Stewardship for Mines R Us will be more than environmental performance. It will include a consideration of human issues and social problems that emanate from its operations in the other regions. The new area of operation is unique because of its indigenous importance and historical heritage. It is important that the specific areas within the new community remain untouched and unpolluted by the consequences of the mining company. As a business, the company uses raw materials directly from the natural environment. Profitability and meeting of shareholder objectives are determined by the management of input costs, ability to maintain production, and remaining competitiveness. The company is also expected to positively influence community relations and its brand perception.

Mines R Us Board of Directors decision to open a new mining operation in an area of significant indigenous importance and heritage would require a show of having an authentic approach to stewardship. To achieve this, responsible management will be required to undo unwarranted environmental situations and human issues through a modification of the company’s management concepts. At present, the company uses a model that focuses on the capitalistic management of resources. The Board must combine responsible management practices with physical stewardship approaches and actions including creation of protected areas for the new location, renovating infrastructure relating to the areas of significant indigenous importance, limiting harvests to a level that does not degrade the heritage areas, reducing and possibly eliminating harmful activities that may lead to loss of value for the heritage areas, ensuring pollution of the environment is limited to levels that do not have a negative impact on the indigenous community, restoration of degraded areas, using sustainable methods, and creating positive value by establishing community gardens. These suggested approaches touch on the three impact areas of climate change, local environment, and local community. Overall, the report recommends that the Board upgrades its management and governance to include sustainability in a firm-wide approach. Specifically, the new mining operation area will need stronger and more active policies and reporting on the same.

Mines R Us previous cases have shed a lot of light on the need for the company to use a responsible business mindset in order to ensure sustainability. At present, the company faces several operational risks including a threat to its license to operate due to perceptions of negative impact to the environment, inconsiderate approaches that contribute negatively to climate change, and a degradation of the local environment. Over-consumption of local resources in other areas means that the organization will have to change tactic in the new area. As such, the main risks include strategic risks, compliance risk, operational risks, reputational risks, and financial risks. The new business plan to include a comprehensive sustainable plan that touches on positive contribution to climate change, the local environment, and the local community. This new approach poses a strategic risk because it may fail to meet shareholder goals of profitability and cost reduction. Compliance risks mean that the laws of the new area of operation may change with time, leading to immense losses. Additional regulations in future relating to the environment, local community, or even the overall climate and others regarding pollution may lead to compliance risks. Operational risks relating to the new sustainable approach in management and corporate culture may lead to internal failure due to poor reception from employees. All of the above risks also lead to financial risks due to lost revenue or extra costs. In the end, the company risks its reputation if it fails to adhere to the expectations of protecting the environment, the local community, and working towards the reduction of its effect on climate change. A damaged reputation leads to outright loss of revenue, in the case of Mines R Us, loss of operational permits and licenses.

An opportunity arises from the above risks and new expectations. First, the company has a fresh chance to implement an organizational-wide strategy that is sustainable both in the production of raw materials and how it relates with the social and human aspects of its operations. There is also an opportunity to redeem its current reputation due to the incidences in Canada leading to loss of natural heritage sites and the devastation of the local community in Peru. The new area gives the company an opportunity to showcase a responsible business mindset and stewardship by implementing the aforementioned suggestions to actively participate in creating positive outcomes for the climate, the local environment, the local community, the people, and the social aspects of the new area. Protecting the areas of indigenous importance and heritage should be top of Mines R Us strategy for the new area, creating a new platform to showcase shared responsibility, corporate social responsibility, stakeholder consideration, and stewardship for the people, the environment, and the local community.