The Natural Resources Podcast

Leadership Matters | Rohitesh Dhawan

July 06, 2021 Highgrade Media
The Natural Resources Podcast
Leadership Matters | Rohitesh Dhawan
Chapters
The Natural Resources Podcast
Leadership Matters | Rohitesh Dhawan
Jul 06, 2021
Highgrade Media

In 2001, the world's largest mining corporations created the International Council on Mining and Metals (ICMM) to improve the industry sustainability credentials.

20 years on, the Council sees change on the horizon and in response it has just appointed  Rohitesh Dhawan as its new CEO. His mandate is to steer the organisation through strong winds of global change. And he’s taking it personally.

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Highgrade is a not-for-profit organisation that produces interviews and documentaries that identify, capture and disseminate analysis and insights in the field of natural resources and social progress.

Our mission is to provide open and free access to specialist knowledge and to disseminate good practice and innovation in this field. See www.highgrade.media for our portfolio of published material.

With support from the German Federal Ministry for Economic Cooperation and Development, through BGR, and the Inter-American Development Bank.

***

Follow us on social media for daily insights and behind the scenes moments:

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Show Notes Transcript

In 2001, the world's largest mining corporations created the International Council on Mining and Metals (ICMM) to improve the industry sustainability credentials.

20 years on, the Council sees change on the horizon and in response it has just appointed  Rohitesh Dhawan as its new CEO. His mandate is to steer the organisation through strong winds of global change. And he’s taking it personally.

***

Highgrade is a not-for-profit organisation that produces interviews and documentaries that identify, capture and disseminate analysis and insights in the field of natural resources and social progress.

Our mission is to provide open and free access to specialist knowledge and to disseminate good practice and innovation in this field. See www.highgrade.media for our portfolio of published material.

With support from the German Federal Ministry for Economic Cooperation and Development, through BGR, and the Inter-American Development Bank.

***

Follow us on social media for daily insights and behind the scenes moments:

Twitter

Åsa Borssén: 
The Greek philosopher Heraclitus supposedly said: there is nothing constant except change itself. And yet, people have often felt that they face unprecedented transformation. I would argue this is the case of the mining industry today. How deep run the changes affecting the industry? And what is it going to do about it? I'm Åsa Borssén and this is Highgrade.

Åsa Borssén: 
Welcome to the Natural Resources Podcast. In 2001, the world's largest mining corporations created the International Council on Mining and Metals, or ICMM, to improve the industry sustainability credentials. 20 years on, the council sees change on the horizon. And in response, it has just appointed Rohitesh Dhawan as its new CEO.

Ro, welcome to Highgrade.

Rohitesh Dhawan:  
Thank you for having me. It's great to be here.

Åsa Borssén: 
First, congratulations on your new job.

Rohitesh Dhawan:  
Thank you very much. I'm into my third month now.

Åsa Borssén:  
Your background is not in mining, though. What attracted you to the ICMM?

Rohitesh Dhawan: 
You know, there are two things that I feel deeply passionately about. One is the health of our planet. And the second is the opportunity for everybody to share in its prosperity. And if you think about it from those two lenses, I think you would struggle to find another sector that has the potential to make a positive contribution on both of those dimensions. And that's why I feel so passionately about mining, because it gives us such a large, long and strong lever that we can pull on to deliver the benefits of growth and environmental sustainability.

If you don't mind, I'd like to tell you a personal story about what connects me to mining, which is as I was growing up, I spent the early years of my life in India, I was born there, I was schooled there. And our family was of relatively modest means. When I say relatively modest means we had a roof over our heads 100% of the time, but enough food on the table, maybe only 50% of the time. Now that's a lot better than many, many people have it. But it's a lot worse than many do as well. And I remember as a young kid receiving a gold medal in school, after I managed to turn my school career around, to be honest, I was quite a terror to begin, and then found myself on a better path. And you know that I remember so distinctly this gold medal in this little plastic case, and it was tiny, the size of a 20 p coin. And every time we would get to half the month and not have enough money left over for groceries and food for the rest of the month, I would just think about this coin thinking I could take this out any minute, go to the pawn shop and get enough money to pay for groceries for the rest of the month. Now fortunately, it never got that bad. We'd never had to do that. But just knowing that I could meant so much to me and my family because it gave us some comfort. And I thought to myself, what is it about this little shiny thing. I mean, I was so young, then I didn't really understand how mining worked. But I just knew that this metal had a particular value. And since then, I had this deep fascination with mining. And I think it's just the greatest privilege in the world to be able to participate in the industry now.

Åsa Borssén: 
And tell me about your career trajectory. What happened before the ICMM?

Rohitesh Dhawan:  
So before the ICMM, Åsa, I spent three years working with Dr. Ian Bremmer, who is a political scientist based in the US, who has for the last 20 years been studying the impact of geopolitics on global business decision making. And I found that so interesting, because you have these big macro trends that are affected by the actions of countries. And then you have companies that are trying to operate in that environment. And so I used to analyze the geopolitics of sustainability. That meant looking at what is driving global ambitions for net zero policy; who are the actors and the kind of political influence they wield, and how do we investors and companies make sense of it all. So I feel like that was a really good training for the kinds of issues that were working on at a global level for the mining sector today.

Åsa Borssén: 
Was it one of those cases where being an outsider actually wasn't good in your job interview for the ICMM?

Rohitesh Dhawan: 
Well, that's what I said. And they seem to accept that. In fact, it's funny you use those words, because my pitch really in the interview process was, I don't know if I'm the right candidate or not. But what I'm convinced about is that the ICMM would do best with somebody who has deep connections outside of mining, based on a simple view that the future of mining today is being shaped by forces outside of the industry, at least as much as it is by forces inside of the industry. And if you believe that, then somebody who has worked in other sectors as I've been fortunate to do, and has connections with groups outside of mining is really helpful.

Åsa Borssén: 
We are going to touch on a number of issues related to the industry today. But I want to start with reflecting on the state of things more generally. There is a sense that the world is undergoing profound change. But then again, every generation feels that way about their moment. How pivotal would you say the times we live in are?

Rohitesh Dhawan: 
On virtually every factor we can measure change through I don't believe that there is reason to believe that our generation or the times we live in are particularly unique. It can feel that way. But you can imagine the same feeling for people that lived through the Industrial Revolution, you can imagine the same feeling for people that lived through the enormous change in society's values through the 1950s, 60s and 70s. So, although today we might be feeling like our world is spinning so fast, we must keep in mind that we don't have the history and context of others who may have gone through equally fast paced changes except for one factor. When I said virtually every factor, there is one I believe that we are truly unique in and that is the impact we are having on the planet. Over the last 3.5 billion years, there have been six incidents of mass extinctions. Mass extinctions are defined as periods of time, where more than 75% of species on Earth are lost. The last mass extinction happened 65 million years ago. And today, we are living through the sixth mass extinction. Since the 1970s, we have lost over 60% of all vertebrate species, and we are on track to lose many more. So unequivocally, objectively, on a fact basis, we are living through an epochal moment in the impact that we are having on the planet. This mass extinction is the first that is being driven by human activity. Now it's not all doom and gloom. What we know is that we can still bring ecosystems back from the brink, but that will require urgent action. And I think there are lots of interesting connections there the mining industry.

Åsa Borssén:  
We can look at the world today in terms of shorter-term issues: COVID, of course, economic recovery, trade tensions you mentioned. But also in terms of more structural long term trends: the gravitational shift towards the east, climate change, global connectivity. What would you say is going to define these times?

Rohitesh Dhawan: 
I package the big trends we're living in now under three categories. The first is what Ian, at Eurasia group who I worked with just before this, calls a ‘geopolitical recession’. We've all heard of economic recessions, with up and down cycles. In fact, what we're living in right now is a geopolitical down cycle, which is where the global order that has defined how things work, how countries interact, the role of business, that has really been stable post World War Two is unraveling. This isn't just about tensions between the US and China, although that is a clear signal of a geopolitical recession. But instead, it is a wider trend of countries acting in their own national interests, and under investing in the global comments. This I believe is the backdrop to every individual piece of trade tension or country to country conflict that we see today. So the first trend is a geopolitical recession.

The second is climate change. Suffice to say that it is the defining environmental challenge of our time. We have had good knowledge about climate change for the last 40 years. But it is really only now that society's values and our politics and our behavior as individuals and companies is catching up to the scale of the challenge. And really what happens in the next decade, fundamentally determines whether we will keep climate change under control or not.

And the third, big trend shaping our world, I believe, is the rise of artificial intelligence. And so much has been written about this, I think of the main trend in artificial intelligence about being: How soon will we get to a point where artificial intelligence not only substitutes for humans, on routine tasks, which already can, but on things that make us uniquely human? Now the test for this is known as the Turing test, which is the point at which a piece of artificial intelligence can replace the uniquely human characteristics in its interactions. Now, there's debate about whether we've already passed that moment or not. If we haven't, we soon will. And that will mean a set of very different choices that we need to make as society once we have this power of AI.

So those three trends, the geopolitical recession, climate change, and the rise of artificial intelligence, I think are going to be the defining trends of this decade.

Åsa Borssén: 
I'm curious, what do you think about the social side of this? What is the effect in people and I'm thinking, in particular, the younger generation growing up now, what is the impact on them?

Rohitesh Dhawan: 

It fundamentally alters the opportunity set that young people thought they had. You remember young people learn from old people, and old people tell young people what their reality is. Now, when you have these three trends, which have largely happened over the last 20 years, or have been accelerated for the last 20 years, it means that the memory bank that the older generations have to pass on to the younger generations, is limited, or missing. And so you might grow up as a young person thinking, I would love to be a doctor, because I like helping people. And I like interacting with patients. Well, lo and behold, thanks to artificial intelligence, you may end up never seeing another patient in real life, because you might be sitting behind a computer conducting surgery. So the reason you wanted to go into medicine in the first place, which is to interact with people, and to help them face to face suddenly isn't your job anymore, you couldn't do it even if you want it. And I use that as a trite example of how quickly the jobs of the future may not be disappearing, I think that's a simplistic way to think about it, but certainly are changing in really fundamental ways. So Oh, how I wish I was young now. But to think about what I would be feeling as a young person today, compared to perhaps what I was 15 or 20 years ago, the opportunity set both positively and negatively looks really, really different.

And if I can just say one other thought on this is that in a world of social media and democratized information, what would have typically been the guardrails or the intermediation between the world of information and how we consume it aren't there. We consume as much news from each other on the likes of Facebook and Twitter as we do through formal news organizations. And in that environment, the guardrails aren't there, the boundaries are not set for society, and they are almost emergent. But in the process of those boundaries emerging, you can understand why young people may feel alienated or astray when it's much harder to make sense of a world that is spinning much faster than before.

Åsa Borssén: 
The only constant in life is change the old Greeks said. But change can be difficult for people. It comes with promise, but also with risk and uncertainty. Are you fundamentally optimistic or cautious about the future?

Rohitesh Dhawan: 
Both. And the reason I say it is because I think given these trends we've just been talking about, we all have to learn to be comfortable holding the tension in our minds, that we now have the potential for infinite good, and for debilitating bad. And how we choose to use that power will determine the outcome. In the past our ability to do really good things or to do really bad things. We're both limited by largely technology. But today, a lot of those limits have been removed. And so whether in 10 years, we're in an age of nuclear disaster, and Planetary destruction, or we're in an age of abundant energy and shared prosperity will be a function largely of not whether we can, but whether we choose to. And that brings me back a little bit to why I am here at ICMM. Because ICMM is a collective organization; it is 28 of the world's largest mining companies that come together voluntarily to push the boundaries of sustainability in mining. That, to me, is a fascinating question. Because it is a collective action question, not an individual action question. And so when you ask me about whether I'm optimistic or pessimistic about the future, my unit of analysis is not what you do, or what I do, or what our parents do, or what our friends do. My unit of analysis is, what do we do collectively. And that is what we ought to be watching if we want to get a sense of whether the future is bright or whether the future is bleak.

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Åsa Borssén: 
Rohitesh Dhawan is the new ICMM boss. The world and the mining industry are in flux. His mandate is to steer the big mining council through strong winds of global change. And he’s taking it personally.

***

Åsa Borssén: 
COVID has in many ways been a crash course in change. What have you learned about change during COVID?

Rohitesh Dhawan:  
Look, the thing about COVID that is interesting to me is that it was not a black swan event. Many would describe it like that. But my understanding, limited as it may be, is that a black swan event is unexpected. Yet, over the last five years, 10 years, we have had repeated warnings from well researched and fact-based sources that a global pandemic was coming. It was not a question of if, it was a question of when. Yet we were grossly underprepared. And so my biggest learning has been that a lot of what might surprise us in the future is actually potentially foreseeable today. Climate change is a very good example of that. If in five years, we are struck by a series of global weather-related disasters, we really ought not to think that those were unexpected, unanticipated things. Because we can tell with reasonable certainty today, that if we don't change our ways, or actually, even if we do, that sort of thing is going to happen. So what COVID has really taught me is to open my eyes to see what is in front of us. But that which we choose to ignore, because the potential ramifications of it are so scary, that it's uncomfortable to face up to

Åsa Borssén:  
Let's consider the mining industry in particular. In your view, what does this time of change mean for mining or put differently, how is mining going to adapt to these global trends?

Rohitesh Dhawan:  
See, this is why I also love the mining industry, because it is such an old industry that you can trace how it has reacted to different periods of change. I love thinking about how the oldest known mine was 40,000 years ago, four zero 1000 years ago, in Swaziland. And of course, then the mining was for ocra, which was a material at clay like material that was used either for burials, or indeed for our skin. Thankfully, we don't mine that anymore, especially not for burials. And things have changed. But this industry is really in the DNA of humans. And change has been something that the industry has had to contend with as of course, our lifestyles have changed, too. And I find it fascinating how change can happen very, very slowly. And then very quickly. And you think about some of the advances that we have been able to make on health and safety, which today mining in some operations and regions would be totally unrecognizable. If you took a miner from 50 or 60 years ago and showed them what we do today. Now it's clearly not enough because just this week, we published the data about how many people sadly lost their lives in mine operations amongst our 28 member companies. And that number was 44 in 2020. So it tells us that we have a long way to go to make sure that nobody loses their life when they're at work. But that number is significantly down from many years ago. And I know that the industry will not rest until we get that number down to zero.

And then you think about a different aspects of how we work and how the mining industry has had to change. You know, you think about the role of women in the industry, which even today at something like 15% of the workforce is grossly inadequate, and there is so much work to be done. But you think about the fact that in the UK, women were not allowed to work underground in mines, until 1989. We can all remember 1989. Or at least I can, I'm sure about others. So you think gosh, that was really not that long ago that we had laws preventing women from mining underground, and that will be unimaginable today. And so we're seeing the industry contend with respond to these changes. And I believe the industry has all the conditions in place to not only respond to society's changes, but actually to lead the change in society on some of the big issues of our time. Of course, the most pertinent I think, is how the mining industry’s products in the form of the minerals and metals that it produces are the backbone for a zero carbon economy. So the world now has agreed that we need to get to net zero emissions by 2050. That is our common goal. To do that, we know that we're going to deploy significantly greater amounts of new and renewable energy technologies, like electric vehicles powered by batteries, like solar panels, like wind turbines, and those in turn, are a function of minerals that are produced from the sector. Now what I see happening is not just the company is gearing up to supply those materials but being very conscious that the way we supply them has also got to be sustainable.

Åsa Borssén: 
Is there anything else that you would like to add to the list of key industry trends?

Rohitesh Dhawan: 
I think the wrapper of ESG to capture the key trends in the mining industry is quite useful. You know, I have previously been critical that looking at the sector only through an ESG lens misses an important dimension, because ESG is risk focused. Whereas what you want to be able to say is, how are we managing risks? And how are we making contributions to society. So although ESG has limitations, I think as a framework for thinking about trends in the sector, it is actually very useful. Because what it does is it helps us think through things that I think the industry is always coped with for as long as it's been in existence, but is now having to explicitly commit itself to resolving. And when you look at it through that lens, you get some really clear views. Climate change we've already talked about.

Secondly, I would say the pressures to deliver development for societies through the extraction of minerals, and to avoid negative consequences on populations, particularly indigenous peoples is a rising important issue. And so in one form or another, we all feel like coming out of the COVID pandemic, the issues related to social inclusion and justice are much higher on everybody's agenda that is entirely true for the mining sector too. And then, thirdly, challenges around localized environmental impacts, particularly water and biodiversity are becoming increasingly important. Going back to what we talked about earlier about the sixth mass extinction that we're living through, those three really shine through and the key trends that are affecting the future of the industry.

Åsa Borssén:  
You are the new ICMM boss, what are going to be your priorities?

Rohitesh Dhawan:  
I think I would say I have three priorities as in taking over the leadership of ICMM today. The first is to build bridges between the sector and key parties outside of it, with whom we can work together constructively to find solutions to sustainability challenges. So I call that bringing the inside out on the outside in. The second priority for me is to work across value chains and players in the industry itself to find an unlock solutions. Just a quick example of that, we run a program called the innovation for cleaner, safer vehicles. To solve this really difficult challenge we faced about how to match the demand for zero emission safer vehicles with the supply of them. Now, that can only happen when we bring different parts of the value chain together. And what I'm hoping to do is to apply the same thinking to solve the other sustainability challenges we face. And then finally, my third priority is to help build a healthier, more constructive relationship between mining and society. Now, I think we all don't appreciate how important different sectors are in our lives, we take it for granted, we don't often think about what it takes to produce the laptop or the cell phone, or any other product that we use in our life today. And in the absence of that deep connection, I think the conversation between the mining sector and society has really not achieved its full potential. So what I'm hoping to do is to have a really open a really actively listening conversation, where we can talk about the role that mining plays in society, talk about both the benefits, as well as the costs of mining, and come to a place where we're all comfortable about the role that mining plays. And that we're in a place where we can learn from each other to make sure that the role continues to be constructive.

Åsa Borssén:
 
As you mentioned, ICMM brings together 28 of the largest mining companies around the world. To what extent can the council really influence their behavior?

Rohitesh Dhawan: 
I think it influences their behavior in more ways that then that can be seen. Now we're not a sanctioning body. We're not a regulatory body. So someone might look upon that and say, Well, do you really have teeth? What can you really do if a member decides not to conform with something? Or if members are not living up to the commitment? Well, we have the ability to expel members who do not conform to the standards we expect of each other. But that's not what drives, I believe the CEOs who are represented at the Council to be there, and to continue to participate, what drives it is being egged on by your peers to say, come on, we can do better. Come on, this can be done. Let's do it together.

Åsa Borssén: 
So good old peer pressure?

Rohitesh Dhawan:  
Good old peer pressure, that's right. And let me not be too Pollyanna-ish about it, not pretend like it's all smooth, sailing and easygoing, and all the conversations are easy. They're not. But the reality is, and I come back to this, nobody is forced to be there. People choose to be there. Because it is an environment in which you learn. It is an environment in which you can debate freely with your peers. And it is an environment that is pre-competitive. You might think well, aren't these companies competing with each other and on some of these issues of sustainability, competitive? Of course they are. But what we are managing to do is carve out spaces that are pre-competitive, where we can come together to solve challenges that not just benefit the whole industry that's very good, but also benefit broader society.

Åsa Borssén: 
Before we end, I'd like to explore your thoughts on some of today's key industry issues. Each of them is a podcast in and of itself, but I'll ask you for short and sharp answers instead. Are you up for it?

Rohitesh Dhawan: 
Very much up for it.

Åsa Borssén: 
Okay. First one is tailings dams.

Rohitesh Dhawan: 
The mining equivalent of a recycling bin, except not everything can be recycled and needs careful management,

Åsa Borssén: 
Gender.

Rohitesh Dhawan: 
Long seen as binary, increasingly seen as non-binary and fluid. And I think it ultimately represents an equality of opportunity,

Åsa Borssén: 
Climate change.

Rohitesh Dhawan: 
The greatest collective action problem of our time,

Åsa Borssén: 
Coal.

Rohitesh Dhawan: 
The heat source for 40% of all electricity generated globally, and the raw material for the majority of steel produced in the world

Åsa Borssén: 
Automation.

Rohitesh Dhawan: 
Mechanize the tasks where human ingenuity is wasted, or lives are unnecessarily put at risk.

Åsa Borssén: 
And final one, mining and economic development,

Rohitesh Dhawan: 
A symbiotic relationship, but with the caveat that more is not always better

Åsa Borssén: 
When we do your ICMM exit interview, hopefully many years from now, what will the organization look like?

Rohitesh Dhawan:  
I hope that in some years time, when I'm leaving, we will think about the mining sector in the same way as we think about other leading sectors on sustainability. So if you think, right, which group of companies does the most and best on sustainability, mining will be in that list of top three, and individual mining companies will be seen as the sustainability leaders that perhaps other maybe fashion or food companies today are.

Åsa Borssén: 
Ro, it's been a pleasure, and we look forward to following your and ICMMs journey.

Rohitesh Dhawan: 
Åsa, thank you very much. It's been a pleasure.

***

Åsa Borssén:  
And thank you for tuning in. 

Today, we've discussed geopolitical shifts, COVID, economic recovery, climate change and artificial intelligence. And the mining industry is both influencing and being influenced by these global trends. Rohitesh Dhawan has taken on the leadership of the ICMM - an industry outsider by background he has a clear vision to turn the industry into a global sustainability leader. A daunting task, but he is a determined man. Will he succeed?

Next episode, we will discuss macro trends in the industry, this time from the vantage point of Highgrade’s editorial team. As always, thank you to our sponsors, the German Federal Ministry for Economic Cooperation and Development, through BGR, and the Inter-American Development Bank. Make sure to subscribe to our channel on whichever podcast platform you are using. Until next time, so long