As numerous members of the mining and associated support services industry head to Cape Town for the first post Covid Mining Indaba it is worth reflecting on how much has changed since the last gathering three years ago.
The turbo charged race to secure critical minerals to support the EV market and help meet zero carbon targets. The impact of supply chain disruption and associated global inflation. The western led sanctions on Russia as it prosecutes its war against Ukraine. The ensuing uneasy standoff with China; Russia’s strategic partner and now unbridled competitor with the west. It’s a lot to take in. Then there is ESG. Seen wrongly by many as simply a focus on carbon emissions or at worse a ‘greenwashing’ effort to appease elements of the investor community.
Some commentators have suggested that ESG will put western, rule following, industry on the back foot in terms of obtaining and maintaining access to critical assets. Presumably the same argument was made when legislation was introduced outlawing the worst excesses of corruption and associated bribery.
As practitioners of above ground risk advisory and support services in Africa we are acutely aware of the rapidly changing nature of investment requirements and social expectations. Sharp increases in the cost of living for people already on or below the bread line often acts as a driver for increased activism or low level, disruptive criminality. The response has to be proportionate and integrated across the broad spectrum of community, Government and supply chain interface.
In a world where the west is rediscovering the fragility and value of a rules based system. Where doing the right thing, such as supporting Ukraine, comes at a cost and some risk. It is reasonable to assume that investors should seek to differentiate between opportunities and gravitate towards those that actively seek to do the right thing. Where partnership sets the tone and a quantifiable ESG plan provides the metrics. In fact it is the firmly held belief of this author that ESG in its fullest form will act as the defining differentiation between competing ideologies in the scramble for Africa’s critical minerals.
Placing a robust and practical Operational ESG strategy at the centre of African mining is an attractive proposition for communities and Governments alike. Done properly it drives a values based approach in every activity from environmental protection, human rights and social development. In short it goes a long way to ensure that the right thing is done within a realistic commercial context. In pure commercial terms it drives long term stability and underscores both the social and political license to operate in some of the world’s most beautiful yet challenging settings.
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Telephone us on: +44 (0)207 730 5446, or email us at: london@hendersonrisk.com
