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Sustainable development a significant challenge faced by miners

4th March 2016

By: Kimberley Smuts

Creamer Media Reporter

  

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Local stakeholders view the mining sector, the way in which it is funded and engages with governments and communities in Africa as fundamentally unsustainable in terms of the future development of the industry.

This is mainly due to a build-up of unrealistic expectations in terms of what mining will and will not provide for local communities.

This was a notable trend that Australian mineral sands miner Base Resources MD Tim Carstens identified during sustainable development discussions at the 2016 Investing in African Mining Indaba last month.

He participated in the Mining Indaba panel discussion, ‘Supporting resilient communities: Creating opportunities for local economic diversification beyond the life of the mine’.

The Cape Town event highlighted that sustainable development had become a key challenge and primary objective in Africa for investors, policymakers and miners, and had resulted in the need to align the expectations of government, communities and companies.

Mining is often expected to completely change a country’s economic outlook; however, this is unrealistic, as it is only a contributing factor, Carstens tells Mining Weekly.

It is, therefore, unwise to expect mining companies to take on the development role that should for the most part be that of government. Regarding planning and advancement across the continent, he notes, “mining companies are often limited by mine lives, yearly budgets and mineral cycles – it is not appro- priate to lean on them so heavily for development purposes where long-term planning and consistency is required”.

As a result of the cyclical nature of commodi- ties and funding, mining jurisdictions need to pay greater attention to long-term planning, whether it be from the perspective of community advancement, government engagement with mining companies or resource development.

Base Resources, whose wholly owned subsi- diary, Base Titanium, operates its Kwale mineral sands project, in Kenya, has attended the Mining Indaba for six consecutive years. The company notes that, compared with last year, attendees of this year’s event expressed greater interest in finding opportunities for investment or mergers and acquisitions, attracting foreign investment and promoting sustainable development of the industry in the current depressed market and in future.

Carstens tells Mining Weekly that, last year, people seemed to lack conviction to take action in this regard, as a result of the downcycle not having “bitten” hard enough, and discussions were limited to what was happening in the market at the time rather than to proactively contri- buting to the sector’s improvement. However, he says this year’s Indaba was encouraging, owing to the eagerness of attendees to actively prepare for the future of the mining sector.

Carstens highlights that the industry must be prepared to explore for decades to replenish the geological inventory to ensure a pipeline of mining projects and long-term sustainability. Without this line-up of viable deposits, a logical development sequence and the predictability this brings, the industry will become increasingly volatile and unable to effectively play its role in sustainable regional development, owing to the current sharp ebb and flow of funding in the mining sector, which is based on short-term commodity price fluctuations.

“Our priority over the next year is to progress our strategic plan, which is geared towards the enhancement of our existing assets and the securing of the next project to which to apply our development capability,” Carstens states.

Edited by Tracy Hancock
Creamer Media Contributing Editor

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