Mines need to ensure a positive social and economic impact in their stakeholder communities

Mining has had a major impact on the economies of host communities and countries – yet this has not always been as positive as it could potentially be. The sustainable development of economies rich in mineral wealth will require stronger linkages with secondary and tertiary sectors in order to ensure that countries thrive long after direct mining activity is exhausted.

This was a key issue explored at a debate of senior mining executives hosted by leading sustainability consultancy, Environmental Resources Management (ERM), at this year’s Mining Indaba which was recently held in Cape Town.

The session entitled “Unlocking Greater Shared Value in the Mining Sector” included Themba Mkhwanazi, CEO for Anglo American Coal South Africa,  Christopher Sheldon,  the Practice Manager of the Energy and Extractive Global Programme for the World Bank Group, and Colin Coleman, MD and Head of the Investment Banking division of Sub-Saharan Africa at Goldman Sachs. The discussion was moderated by ERM’s Mining Practice Lead for Sub-Saharan Africa, Sue Posnik.

Key points of the discussion identified the need for a common vision and then recognition of what needs to be done by each stakeholder, with much emphasis on executing the required changes. A number of constraints were highlighted as currently hampering shared value creation in the mining sector: in particular, the lack of, or unreliable provision of, infrastructure and key inputs such as electricity. This has arguably resulted in many economies missing out on the commodities boom of the last decade. Another key stumbling block is the uncertainty around key mining, environmental, social and tax legislation.

Commenting on the outcomes of the session, Louise Pearce, ERM’s Managing Partner for the Global Mining Sector, stated: “Generating greater shared value from mining-derived revenues could benefit the local communities, the region and possibly an entire country – and secure the future of mining.

“Public-private partnerships for infrastructure and other well considered triggers for secondary economic growth could provide medium term stability and a sustainable future beyond the life of the mine. Given that commodity prices may stay close to current levels for some time to come, miners need solutions for these increased stakeholder expectations, at a time when companies are under acute pressure from investors.”

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