Living in Peru : your everyday companion

(by Jacqueline Saettone, Partner of Aleteia Capital and Professor of Universidad del Pacifico)


A few years ago, it would have seemed odd to speak about intangible assets in mining - not because the mining industry lacked them - but because in general, companies were not used to thinking about them.

Although mining has traditionally used and created tangible assets, it has also – consciously or unconsciously - used and generated intangible assets in its business: intangibles such as their knowledge of geology, metallurgy or construction. Their capacity to establish joint ventures or to win licensing processes; or the financial and operational models they create. Today, some mining companies are also beginning to view their reputation as an intangible asset that needs to be managed.

Managing a mining company’s reputation is a complex process. However, it is important to do so in order to be able to develop an excellent relationship with the communities, employees, the State and other key audiences.

Achieving this requires:

1. Developing an approach to understand the perceptions, fears and expectations - regarding both the mining industry and the specific mining project involved – that the communities surrounding the mine, its authorities and other audiences have.
2. Performing an internal analysis about what the shareholders and management want to achieve
3. Developing a communications strategy to change erroneous perceptions or communicate plans
4. Aligning what the mining company communicates about itself with what it actually does: Getting the whole organization to work daily to create the desired reputation
5. This means designing and fostering a corporate culture which ensures that geologists, community relations and environmental employees - and anyone else who interacts with the communities - behave according to certain values which allow them to work with the communites as good neighbors would
6. Applying lessons learned from service businesses, thinking of the communities as clients and partners in regional development
7. If all of the above is adquately implemented, an asset which is very valuable for any company or country in general - and which is specially important for mining companies - will be developed, and this is trust. Without it, operating the mine will be very difficult.

Although all of the above may sound simple, it is not easily put into practice. However, it is an approach that allows mining companies to order the chaos that many of them face daily and that sets the basis to establish relationships of trust with the various audiences involved in their exploration and exploitation processes.

We should think about this kind of approach, as an “invisible machinery” that once designed and turned on, will allow us to gain greater control over our destiny. Over the series of daily decisions and behaviors of employees which would otherwise lack a sense of direction - and which could even destroy value for the company, without any of us even realizing it.