“This means considerable opportunities for mineral-rich African countries, especially since mining is an important pioneer sector with significant transformative potential,” Vis Reddy, chairman of SRK Consulting South Africa, said in a news release. “But we need to remember that much is expected of the mining industry in today’s climate.”
These expectations – in many regions codified by laws and regulations – have moved beyond simply reducing the negative impacts of mining.
Leading mining players have embraced a responsibility to actively contribute to socio-economic prosperity in host countries and in the mining communities in which mines operate.
“This adds to the complexity of minerals exploration and development,” said Reddy. “It can certainly add to the timeframe from exploration to production, which is often not what project developers want to hear – especially when time is of the essence in meeting the demand curves predicted for the energy transition.”
Dominique Sambwa, chairman of SRK Consulting Congo, pointed out that it could take a decade or more to progress from a mineral discovery to a producing mine – and longer if there are uncertainties in the legal and regulatory framework within a host country.
“There are some African countries where the mining sector could be pioneered almost from scratch,” said Sambwa. “This presents an exciting prospect for the nations concerned, but for investors it implies a number of uncertainties which complicate planning and evaluation.”
The challenges may range from infrastructure deficiencies to a lack of regulatory clarity. The result is that there is a considerable obligation on mineral explorers and mine developers, as they navigate a challenging working environment to facilitate progress.
“Compliance is measured not only in terms of legislation and professional standards in fields from geology to accounting,” he said. “There are also stringent global frameworks adopted by project financiers, such as the Equator Principles and the Mining Principles of the International Council on Mining and Metals. There will also be expectations in terms of the United National Sustainable Development Goals and the Paris Agreement on climate change.”
When looking for funding, listed companies will also face stringent conditions from stock exchanges. Many of these conditions will relate not just to their technical studies and financial projections, but to their ESG commitments and implementation plans.
All these factors point toward the fine line that the mining industry in Africa – and elsewhere – will walk in its efforts to facilitate a lower carbon future. Andrew van Zyl, managing director of SRK Consulting South Africa, highlighted that there are seldom short-cuts when developing a mining project – even when all stakeholders are impatient for success.
“In our experience, the best way to ensure efficacy in mineral projects is to ensure that all aspects are correctly investigated and addressed the first time around,” said Van Zyl. “This is really the only way to avoid unexpected delays, which often arise from insufficient foresight or sub-standard quality of work.”
He emphasised that today’s environment demands a well-informed strategic approach for mineral ventures, from exploration and compliance through to stakeholder engagement and post-closure planning.
“We would argue that to respond responsibly to the global economy’s demand for increased mineral production, industry players need to be technically focused, to achieve the necessary levels of empirical accuracy,” he said. “At the same time, they need to take a broad view of all the impacts that their project will create; this in turn means engaging a wide variety of relevant skill sets, which must be well integrated to have the right result.”
The field of exploration, for example, is not just about geology, he noted. Today more than ever, this work must be conducted alongside engagements with local communities and a range of regulatory authorities. It needs to be preceded by social and environmental baseline studies, which require specialised local knowledge.
Being part of a value chain that links directly with growing ESG concerns, critical mineral producers will be even more closely monitored in both the ethical and technical aspects of their operations.