Progress in Sustainable Mining

There are signs that sustainable mining is finally being properly understood by the extractive sector. Practical solutions are being put in place, at last, in collaborative projects with national governments.

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Feb 21, 2019
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A dictionary definition of 'sustainable' is frequently something along the lines of 'causing little or no damage to the environment and therefore able to continue for a long time'.

Mines involve disruptive techniques to exploit wasting assets, so, on the face of it, are an unlikely candidate for the sustainable nomenclature. Accordingly, the extractive sector has different requirements for a project to be considered sustainable. Perhaps the best known criteria are those of the Mining Association of Canada (MAC), which has a set of tools and indicators to ensure its members' operations are managed responsibly.

MAC established the 'Towards Sustainable Mining' programme in 2004 with the main objective being to enable mining companies to meet society's needs for minerals, metals and energy products in the most socially, economically and environmentally responsible way. MAC says its members demonstrate leadership by engaging with communities, driving world-leading environmental practices, and committing to the safety and health of employees and surrounding communities.

However defined, for more than a decade mining operations have been asked to:

  • Involve communities at an early stage in the design and implementation of operations.
  • Proactively seek, engage and support dialogue regarding the project.
  • Conduct business with excellence, transparency and accountability.
  • Protect the health and safety of employees, contractors and communities.
  • Minimise the impact of the operation on the environment.

Unfortunately, the implementation of these aspirations has been less than overwhelming. Criticism has been particularly sharp in Africa. In South Africa, for example, the chair of Gold Fields Ltd, Cheryl Carolus, has said "Globally, the extractive sector can do better", and she recently criticised mining companies for their "adversarial mood". The country's Minister of Mineral Resources, Gwede Mantashe, agrees, and has argued that "mining is not about rocks, it is about people", and that mining "must be seen to be benefitting local society".

Ghana's President, Nana Akufo-Addo noted at the recent Indaba conference in Cape Town that the history of mining in Africa has "not always been a happy one", and pointed out the irony that "the continent with the richest resources has amongst the world's poorest people". He accepted that Africa is handicapped by unstable governments, corruption and incompetence but said there have been "big changes", and "we will not tolerate the past practices".

Africans are realistic, said President Akufo-Addo, "we know companies need to make a profit" but added "we want fair deals". Minerals are a public resource, he told Indaba delegates, and called for "transparency, and contracts in a language that doesn't need to be translated".

President Akufo-Addo added that there are also "riches on the surface in the form of a young and dynamic workforce". He called for mining companies to be "part of the transformation", saying it is "time to make Africa prosperous … the people of Africa do not need to be poor for others to be rich".

The CEO of Anglo American Plc, Mark Cutifani, is a long-standing critic of the performance of his peer companies. Mr Cutifani has claimed that mining needs to be "reimagined", and we must "work together to create a new mining industry". This will start, Mr Cutifani said, with safety and health, and incorporate environmental and social improvements.

Not for the first time, Mr Cutifani argued for the need to create sustainable jobs/opportunities in the communities around mines, perhaps by providing access to mine infrastructure. We must, he said, "turn mines from being a negative to being a positive experience".

Peter Leon, the co-chair of Herbert Smith Freehills' Africa Practice, has said that resource nationalism is a problem as governments do not think they are getting a 'fair share'. He noted that metals-price cycles are a contributing problem, and stressed the need to ensure agreements that are fair to both sides.

At Indaba, Botswana's Minister for Mineral Resources, Green Technology and Energy Security, Eric Molale, stressed the necessity of sharing the wealth derived from natural resources (and his inter-departmental responsibilities reflect the connected issues). On the same panel, Nicole Bieske of Transparency International added "resources must benefit people, and issues arise because of lack of transparency and corruption".

The head of the UN Economic Commission's Natural Resources Division for Africa, Kojo Busia, underlined that mining can have a "catalytic impact" on local economies.

There are encouraging signs from West Africa. Guinea has established 'Resource Corridors' that will involve multi-user access to rail and ports, non-mining transport and local procurement. The government is seeking mining firms with a "long-term investment horizon" and a willingness to invest in 'spatial planning' to "unlock the potential of other sectors".

In an initiative with the UK's Department for International Trade (DIT) and the Rudolf Wolff Commonwealth Infrastructure Fund, bauxite explorer Anglo African Minerals Plc signed a Central Corridor agreement in June 2018 with the country's Minister of Mines and Geology, Abdoulaye Magassouba.

The Central Corridor project will create an economic corridor in central Guinea based on a multi-user rail and port. This will not only help the exploitation of Guinea's mineral resources within this region, but will contribute to the development of other sectors.

The DIT helped bring the partners together, and Catherine Inglehearn, the UK's Ambassador to Guinea, described the initiative as a "leap of faith by the UK Government" but it saw this as an "opportunity to use mining as an economic catalyst". It was, she told a seminar at Indaba, "unusual for government to support project of this size", i.e. junior, but that it was an "opportunity to do things properly from the start".

Minister Magassouba stressed that, in Africa, "agriculture is the real engine for growth in GDP and employment". Hal Hemmerich, the CEO Leaderstar Solutions, noted that the proposed partnerships and multi-discipline investment helped mitigate the risk, and it was especially important to be working with the agriculture sector. Jon White, the CEO of Impact Agri, stressed the importance of linking mining to agriculture, but commented that there were few examples of success stories. There is, he said, a "need to think big" and such projects "need the right type of funding", and patient investors.

During the past two years there have been tangible signs that mining companies have finally got the 'sustainable' message. No-longer an oxymoron, the signals for sustainable mining in Africa are encouraging. 

Sustainable Mining will be a key focus at IMARC 2019 and the Africa Focus Day will delve deeper into many of these topics. 

Find out more about IMARC 2019.

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Chris Hinde

Chief Commentator, Mining Beacon

Previously editorial director of Mining Journal, and more recently head of S&P Global Market Intelligence's metals and mining team, Chris is now Mining Beacon's editor-in-chief and lead commentator. He posts two blogs every week, one on Monday reviewing market conditions over the prior week, and a second on Thursday looking at issues on the global mining scene. There is also a quarterly blog on business opportunities in the sector.

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