The world in which mining must make its way today is a vastly different place to what it was just a few decades ago. It is now operating in a much more regulated and challenging context.
The reasons are not hard to understand. The negative environmental legacy of the mining sector lives on in many countries including South Africa. Globally, this is still a common basis for many communities to oppose mining. The sector’s social impact has also been variable, often leaving little behind it in the way of economic sustainability.
In recent decades, however, the industry’s responsiveness has been generally encouraging – paving the way to generating increasingly positive impacts in mining countries. These extend beyond the more visible benefits of adding to job creation and government revenue, to the frequently unseen effects of promoting good governance and legal frameworks for economic development.
Mining has historically proved to be a powerful pioneer industry in many countries around the world, and is still playing that role around Africa. A key aspect of being an early entrant into an evolving economy is that mining companies require the host country to provide and enforce ‘the rules of the game’. This in turn needs regulatory institutions within the state to make policy and apply laws and regulations.
As mining has entered new regions, it has often provided the necessary pressure for governments to extend and clarify its regulatory frameworks for business to take place. Mining industry bodies have in fact frequently contributed directly to this process. For example, the Extractive Industries Transparency Initiative (EITI) is today the global standard for promoting the open and accountable management of oil, gas and mineral resources.
Guided by the principle that a country’s natural resources belong to its citizens, these efforts help introduce good global industry practice to host countries. Such practice is also promoted by international financial institutions, whose stringent environmental and social requirements raise the bar for responsible corporate behaviour.
Mining’s most positive impact on host countries has often been on stimulating secondary industries through its procurement. In the past, this has tended to be an organic process without much close monitoring or control. More recently, however, local procurement has been harnessed to help spread mining’s benefits within host countries and local communities.
Like all good ideas, of course, the execution of these policies needs the commitment of skilled and well-resourced practitioners. Mining companies are showing considerable commitment in their evolution of strategies and projects to enhance their positive impact – by using their supply chains to nurture local enterprises. Among the tools for progress is the Mining Local Procurement Reporting Mechanism developed by Engineers Without Borders.
In this shift in focus, practitioners highlight the importance of mines’ role in building community resilience, especially as climate change has begun to undermine economic stability and even food security in many regions.
Mining’s new place in the social fabric has therefore come with many demands, but it is responding with determination and a considerable base of expertise that broadens and deepens by the day.
- Vassie Maharaj: Director, Partner and Principal Consultant in Social Risk and Stakeholder Relations Management, SRK Consulting SA
- Darryll Kilian: Partner and Principal Environmental Consultant, SRK Consulting SA