Junior and emerging mining companies in South Africa face a range of complex social and regulatory challenges that add significant financial and operational barriers to growing their operations, a range of junior miners, industry experts and regulators highlighted during a webinar hosted by Minerals Council South Africa on March 31.

To apply for mining rights, companies must engage in meaningful consultations with communities, stakeholders and affected and interested persons, which will inform their social and labour plans that are required for the granting of mining rights, confirmed Department of Mineral Resources and Energy (DMRE) mine communities and stakeholder engagement director Nkosinathi Zweni.

However, junior miners do not always have the resources to fulfil this obligation to the extent required under regulations and the expectations of the communities, partly owing to only having access to limited funding and/or risk financing capital in addition to often not yet producing or selling product, said black-owned junior miner Lethabo Exploration CEO Mandy Malebe and junior exploration and mine development company Orion Minerals commercial and business support manager Marcus Birch.

This consultation process is further complicated by political challenges, including that community leadership structures may not include the entire community or represent the mine host community.

Additionally, the municipal integrated development plans have a significant element of political influence, which may dictate development goals that are separate from the needs of host communities, said Minerals Council South Africa Social Performance Desk head Alex Khumalo.

Further, even following engagements with communities and agreement on local economic development plans, other formations that are either parallel or separate community leadership or civil groupings may contend that they had not been consulted, Mpumalanga exploration company White River Exploration executive director Refilwe Monageng said.

These challenges are further complicated by the presence of "selfish or criminal formations" that impose themselves on these projects. This often leads to the developmental needs of the communities being neglected or subsumed to benefit a narrow group of beneficiaries instead of the intended beneficiaries, he added.

"Unfortunately, South Africa's socioeconomic development challenges are dumped at the door of mining companies. The solution is building relationships between mining companies, municipalities and stakeholders, as well as youth and women groups.

"In dealing with municipalities and stakeholders, it is often best practice for mining companies to proactively develop these relationships to get input, although it can be daunting to gain consensus. While the community and stakeholder engagement process should start with assistance from the DMRE, the mining industry cannot wait for the DMRE and must be proactive in addressing the development needs and sustainability of initiatives through such mechanisms," he said.

The approach White River Exploration has adopted is to highlight risks and present mitigating factors or interventions that address these risks and/or community concerns and present solutions to the risks and challenges to the community and the regulatory authority the DMRE, said Monageng.

DEVELOPMENT FRAMEWORK
"We need to consider the challenges we face as emerging miners versus the expectations placed on us in terms of social performance and community development. The question is how we can protect community development projects to receive social performance licensing permissions and not compromise the sustainability of the mining group?" said Malebe.

The biggest challenges Lethabo Exploration faces are finance and human resources, especially as the company has not started selling products yet and is not receiving an income, she added.

"Without an income, how will we be able to provide adequate social performance, address external challenges, meet the expectations of communities and the Mineral And Petroleum Resources Development Act? Even before we start community engagements and consultation, we make promises in terms of jobs creation and contributions to improving the current socioeconomic status of the community," highlighted Malebe.

Lethabo Exploration has also been confronted with illegal mining taking place within its rights areas. Following exploration and prospecting, which identify and verify the presence of minerals, illegal mining follows.

"We were fortunate that the community came to protect the minerals and our stockpiles from illegal miners. We are now in a position that we need to reward the community for its honesty, but how do we do this if we cannot yet access markets?" she added.

The question that needs to be asked of the DMRE is whether it is fair that emerging miners be expected to provide social performance to the same levels as major mines. Making a grace period available to junior and emerging miners prior to the projects generating income without neglecting their responsibilities could be a potential solution, Malebe said.

Meanwhile, even in areas without a history of mining, such as Saldanha Bay, in the Western Cape, where rock phosphate exploration, mining and processing company Kropz is commissioning a phosphate mining operation, there remains a general lack of trust between communities and mining companies, said Kropz Elandsfontein COO Michelle Lawrence.

"Some of the lessons we learned over a seven- to eight-year period engaging with mining communities, especially in an area without a history of mining, is that we have to distil and communicate what we intend to do in terms of mining activities and the objectives of local economic development as our relationships with communities unfold.

"We have overcome the trust issues, which were dealt with through time and a lot of patience and engaging frequently with the community, including bringing them to site, as well as hosting workshops and doing a lot of education about our mining activities and what we will be doing in the area," she said.