Modern Mining January 2023

electric vehicles is to be welcomed, less thought has been given to the security and sustainability of the required raw material supply.’ It is therefore surprise that the theme for the 2023 Mining Indaba is Unlocking African Mining Investment: Stability, Security and Supply . Below, I advance the argument that taking Environmental, Social and Governance (ESG) perfor mance seriously is key to securing a truly sustainable supply of critical raw materials required for the energy transition. First, metals such as copper, cobalt, chrome, man ganese, lithium and platinum group metals (PGMs) are clearly critical for the transition, but they are increasingly found in politically fragile jurisdictions that score poorly on investment attractiveness. In other words, the resource curse – the paradoxical relationship between resource wealth and underde velopment – is prevalent. If the resource curse is to be overcome across resource-wealthy African econ omies, then transparency and accountability are key steps towards that end. The ’G‘ of ESG simply means that companies become increasingly open to scrutiny, less inclined to pay bribes (as Glencore has recently been found guilty of doing in the DRC) and more dedicated to sourcing minerals cleanly and without political interference to gain prefer ential treatment. At the same time, the onus is on governments to ensure that exploration and produc tion rights allocation processes are proper in every respect. There is no reason, for instance, why a func tional cadastre system should not be implemented immediately in every African jurisdiction. A cadastre simply means that everyone can see which company is applying for which concession and where the pro cess is at any given moment. South Africa’s system now allows individual companies to access applica tion forms online, but there is no transparent map of which companies own which concessions at present. Second, while ethical sourcing is crucial to clean ing up supply chains, it is important to be aware that some well-intentioned schemes can end up inadvertently destroying the livelihoods of legiti mate artisanal and small-scale (ASM) miners. The key here is for companies themselves to ensure that they engage with local communities sincerely and procure only from legitimate sources. The ’S‘ part of ESG is about mainstreaming social perfor mance. Doing right by host communities cannot be treated as a tick-box exercise. In my current work as director of research at Good Governance Africa, I still see too many examples of companies striking deals with the local chief, conducting one meeting with ‘community stakeholders’, currying favour with the incumbent politician and their family and con tinuing as if the community will now be completely onboard with the proposed extraction. It doesn’t work like that – relationship-building and communi cation take time, and the social licence to operate

should never be a ‘catch-phrase’; it is something that every company should take seriously lest they have to resort to paying private militia to protect their assets from aggrieved community members ten years from now (by which time the current CEO will have long since retired). Social and Labour Plans, as required by South African mining law, are too oner ous and deter companies from contributing to the broader institutional framework that would enhance social development (such as education) in their host communities. Third, the ‘E’ is probably the most promising element of the current ESG milieu, in that mining companies increasingly have access to technologies which will help them to extract minerals and metals with a minimal environmental impact. Environmental performance is also typically easier to measure and report on than the social dimensions, which are a lot more qualitative. Lowering one’s environmental foot print makes good business sense in the long run for two reasons. It increasingly allows you to leave more of the ore body available, extending the life-of-mine. It also reduces the human cost of sending people to

Metals such as copper, cobalt, chrome, manganese, lithium and PGMs are clearly critical for the energy transition.

Progress towards clean, renewable energy and electric vehicles is to be welcomed.

January 2023  MODERN MINING  59