In his presentation, Rio Tinto head of procurement John McGagh said the concept of sustainable development was defined as development that meets the needs of the present without compromising the ability of future generations to meet their own needs.
"Sustainable development is not a cost/cost, it's a cost/plus," he said.
"It's reacting to society's expectations and it is good for the international mining community to react to this."
Speaking at Perth's Burswood Entertainment Complex, McGagh said while there were costs associated with adopting sustainable development techniques, the benefits more than outweighed the costs.
"The first real benefit of sustainable development is reputation," he said. "The extractive industry is particularly sensitive to reputation.
"The second is access to resources … which is enhanced by a clear track record in sustainable development.
"By engaging closely with our global communities, we get a better understanding of their legitimate needs and that also enhances our position and national governance … we become the miners of choice."
McGagh also highlighted the sustainable development benefits of securing further talent to the mining industry, enhancing relationships with local communities and reducing the risk of business disruption.
According to him, the mining industry had to reposition itself after its reputation was tarnished during the latter part of the last century, and thus was forced to adopt these new principles of sustainable development.
"If we go back to the 60s, Australia in the case of mining … the miners were regarded as nation builders," he said.
"In the 1970s, that started to change. Mining companies were seen by some, and I am quoting now from records of that era, as destroyers of the environment and a threat to indigenous people.
"That was not because in general the mining companies had changed; [instead] society's expectations changed and society's expectations will continue to change as they relate to us."
McGagh said the repositioning included stakeholders seeking to address legitimate concerns and Rio Tinto having to adapt its approach to reflect more explicitly the balance that needed to be achieved between society, the environment and social performance.
One instance whereby Rio Tinto adapted to societal change was in the global miner's public support of Native Title in Australia, a move seen to be out of step with the resources industry during the early 1990s.
According to McGagh, Rio Tinto Procurement's contribution to sustainable development takes place through the term "sustainable supply", which fosters sustainable industry development and sustainable service development in and around areas the company can influence.
"These industries that we are attaching ourselves to in the local communities need to be able to stand on their own," he said.
"That means [these industries] need to be competitive over the long term.
"This is not easy because you need to balance societal expectations with the rightful expectations of the shareholders, so the best way to describe the sustainable development is one of a journey."
In applying the concept of sustainable development, Rio Tinto uses a sustainable supply playbook, which incorporates the three factors of time, opportunity and location.
"The playbook is developed through the application of looking at distance from operations, how the supply base can be fostered, looking at time and how over time we can generate more sophisticated suppliers in and around our operations and opportunity," McGagh said.
He emphasised that this was not a short journey for Rio Tinto, with the longevity of the company's operations requiring the miner to stay in touch with the changing expectations of the community and to adjust its approach where necessary.
During his talk, McGagh used Rio Tinto's Resolution copper prospect in the historic pioneer mining district outside of Superior, Arizona, as an example where the local community was willing to embrace the development of a new mine and rebuild the local supply base following the closure of mines in the area.
"This was an alliance between state, local government and education institutions, which is critical, as that alliance is demonstrating strong support and they are actively working together with Rio Tinto to achieve the development and kick-start the local supply base that will support this community going forward, and we turn the project, hopefully, into a successful long-term operation," he said.
In conclusion, McGagh said issues relating to sustainable development were not something miners could tackle on their own.
"This is something that we are inviting our whole supply community to come and join with the discussion to look for the opportunities, to create the local momentum that we are unable to do without our suppliers coming on board," he said.
"We have got to do it through engagement with all stakeholders and suppliers are critical stakeholders.
"This is something the mining industry will need to tackle in the years to come … society expects it of us."
Rio Tinto established its Rio Tinto Procurement division in 1996, which manages the entire buying function for business units and incorporates strategic sourcing, purchasing automation and supply chain management.
