Environmental
Significant investment is being made in transmission infrastructure in Africa

Mining companies in Africa can look forward to an increased focus on issues of social impact in environmental regulations in 2020 – and also more assertive enforcement by regulators and authorities.

By Darryll Killian, partner and principal environmental consultant, SRK Consulting

Trends emerge to overcome challenges

Regulatory frameworks for environmental management in the mining sector have tended to be quite stable this year, with a few countries modifying their mining frameworks to further enhance the positive social impact of mining operations.

This article first appeared in Mining Review Africa Issue 1, 2020

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The overall message is clear. Governments are seeking better ways of making the most of mining’s benefits when it comes to community development.

The trend to reduce negative impacts of mining also continues – including issues like resettlement and compensation. This trajectory is unsurprising, given the high risk ranking of mines’ social licence to operate.

Indeed, the moves by most African countries to codify social impact requirements in their mining codes or legislation are closely aligned to the best practice guidelines of global financial institutions. These are all positive steps towards a more sustainable future for the sector.

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Regulations alone, however, are not always enough to facilitate moves in the right direction. Enforcement is also vital to ensure compliance and a level playing field across the industry.

While many countries still struggle with administrative capacity, there are ongoing efforts by governments, funders and donors to build muscle behind the laws. Compliance will therefore remain a key imperative for miners across all environmental, social and governance (ESG) issues.

This is not always easy in conditions where mergers and acquisitions occur frequently – as they do among miners in Africa. Such transactions are often disruptive, bleeding out vital institutional memory that understand the daily demands of compliance. At worst, this can put mining rights at risk.

What are the areas, then, where mining companies will be need to be particularly astute about ESG compliance?

With communities increasingly aware of their rights and leverage, the science of engagement is an ever more valuable discipline. Many mines lack the insights and expertise for this, but there is a growing body of experience and knowledge in this field that industry needs to embrace.

A related and equally important area is managing the issue of artisanal small-scale mining – on both closed and operational mining sites. Often ‘stuck in the middle’ between governments and artisanal miners, formal mining companies struggle to navigate this complex and conflict-ridden terrain. It is unclear where solutions will come from, as stakeholders search for new approaches.

Water will continue to be a contested resource, especially in water-scarce countries. It already sparks regular tensions between mines and communities.

National regulations will see tighter control of water quality, and mines need robust systems to monitor and control water discharge. Mines are likely to continue their efforts to implement technologies that will result in improved water efficiency.  Climate change is further complicating these demands on mines, which is exacerbated by variability of rainfall in many areas.

The related risks extend beyond securing enough water for plant processes and other uses; there are design implications for flood defences and tailings dams. As water regulations evolve, governments are asking mines more detailed questions about their strategies and provisioning. Funders continue to raise the bar of best practice, requiring in-depth information about how water-related risks are mitigated on a project basis.

The global climate change focus extends to the rolling out of carbon tax, a step that South Africa has already taken. As significant energy users and carbon emitters, mines will feel the brunt of such taxes. The bottom-line pinch is likely to incentivise mines to adopt alternative technology in their operations in order to reduce their carbon footprint.

So much for the trends that can generally be regarded as challenges. There are other trends of a more positive nature that are worth a mention.

Trends emerge that drive industry positivity

The New Partnership for Africa’s Development (NEPAD), now the official development agency of the African Union, has been pursuing opportunities to strengthen infrastructure around the continent – notably in power supply, roads, ports and rail.

As these roll out, mines will be among the first to benefit, and not just in terms of cost. For those mines that can switch from diesel generators to the national grid, their environmental impact is likely to be considerably reduced and their sustainability improved.

The Southern African Power Pool (SAPP) – comprising the state-owned utilities in the sub-continent – has been ahead of the curve in this process. Upgrades to high-voltage power lines and construction of strategic interconnectors are part of their focus, promising to bring relatively low-cost electricity closer to remote mining locations and ensure a reliable power supply.

In parts of southern Africa, large investments are being made in hydro-power schemes that will link into and strengthen the regional power grid. Plans are also afoot in East Africa for interconnectors that can lower the cost of doing business and improve security of supply.

The continent’s infrastructure efforts are being supported by international development financiers like the World Bank, and there is also considerable investment from countries like China.

The resulting greater security of electricity supply will be a foundation element for new mine development or Brownfield mine expansions alike in much of Africa. By contrast, the constraints related to South Africa’s power utility are likely to negatively impact miners’ development projects.