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Mining industry deliberates role in shaping climate and community resilience

LOOMING LARGE The futureproofing of mining is essential for continued technological and economic development, and the topics of climate change resilience, social licence to operate and critical minerals extraction key to global development

24th January 2025

By: Nadine James

Features Deputy Editor

     

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The Investing in African Mining Indaba 2025 is adopting a forward-thinking approach by actively exploring new audience sectors to enhance the event, while embracing the “universal truth” of a shared responsibility to safeguard the planet for future generations, notes Mining Indaba organiser Hyve Group content and strategic partnership head Laura Nicholson.

This approach – much like the Indaba’s 2025 theme, ‘Future-Proofing African Mining, Today!’ – seeks to embed a degree of resilience by incorporating an array of experts and decision-makers, both to expand the event’s audience and to incorporate new expertise that will aid African mining’s long-term prosperity.

Importantly, the event’s evolution mirrors the transformation of the industry, with Minerals Council South Africa social performance head Alex Khumalo stating that “modern mining is so much more than just digging minerals and metals out of the ground. There is scope for a broad range of disciplines and skills as mining companies focus on economics, and the environmental, social and governance aspects of responsible, sustainable operations”.

He comments that mining will continue to play a pivotal role in economic and social development, pointing out that mined commodities are catalysts for development, wealth creation, sovereign stability and direct and indirect job creation.

Consequently, “the futureproofing of mining is essential for continued technological and economic development”, says Khumalo, with Hyve noting that a key objective of Indaba 2025 is to help “fortify the planet by fortifying the mining industry”.

Indaba 2025’s four pillars – Industrialising Africa; Futureproofing Communities; Delivering Effective Net Zero & Just Energy Transition Strategies; and Maximising Africa’s Critical Metals Endowment – will hopefully “ignite conversations that forge pathways toward a greener, more equitable future”.

Clear & Present Danger

The mining sector’s ability to adapt to climate change is crucial to ensuring the long-term sustainability of individual operations as well as the broader industry, says Nicholson.

Land access and resettlement consultancy Steyn Reddy Associates founder Gerry Reddy notes that “climate change is going to affect every facet of the mining industry, including access to land, water and other resources, as well as impact on the lives and livelihoods of mine-affected communities”.

Further, he avers that any discussion regarding futureproofing mining and climate adaptation must consider the future of mine- affected communities.

“Communities will likely be facing multiple cumulative impacts arising from climate change, such as influx and migration, water stress, disease, extreme weather events and agricultural impacts. Mines must consider how their plans or operations will contribute to these impacts, and where ‘tipping points’ may occur. This requires real partnerships with mine communities, not just in developing mitigation and adaptation measures, but in examining what the impacts are and what the triggers for displacement and resettlement might be.”

Reddy notes that mines and communities must be able to identify and respond appropriately to emerging hazards by, for example, encouraging livelihood diversification, implementing soil and water conservation measures, and aiding sustainable agricultural practices.

“Mines’ social and land management teams can work with communities to assess their adaptive capacity and the degree to which they are likely to be able to manage climate risk. Capacity building can be provided to help them absorb shocks to their livelihoods and living conditions.”

He comments that the costs associated with these additional measures can normally be accommodated within existing social performance budgets, assuming these meet industry standard, and provided it is a professionally planned and implemented process.

“What is clear is these costs will be dwarfed by those that could be incurred without embedding climate-change considerations into mine planning. For example, the costs of tailings storage facilities’ failures are already well known.”

Moreover, Khumalo notes that appropriate mitigation and adaptation strategies can “contribute to the overall reduction of the economic, social and environmental costs of mining”.

He explains that such strategies can lead to improved stakeholder relations, create new business opportunities, enhance business continuity planning, and ensure the sustainability of communities and ecosystems.

However, regardless of the scale of their involvement in improving community resilience, miners cannot afford to ignore the climate change issue. First, because it can and will affect employees and operations, and second, because it has already influenced community expectations.

“As an external driver, climate change is increasingly making it more difficult for the mining industry to earn and retain its social licence to operate. This gradual shift in expectations calls upon the mining industry to not only improve socioeconomic development outcomes through current social and labour plan (SLP) commitments, but to make meaningful contributions towards community resilience,” says Khumalo.

Nicholson suggests that futureproofing the mining industry in this context requires that mines embrace sustainability in both operations and long-term vision.

“Climate-conscious practices – such as renewable-energy integration, carbon- reduction initiatives, and sustainable water management – are key steps toward making operations and communities more resilient.”

The Hunt for a Social Licence

Nicholson says that, nowadays, securing and maintaining a social licence to operate is not just a strategic advantage – “it’s an absolute necessity for mining companies”.

Consequently, Mining Indaba 2025 will, for the first time, recognise some of the African mining sector’s most important stakeholder groups – mining communities, civil society and indigenous people.

“This landmark recognition will introduce dedicated sessions across various agendas, with the ultimate goal of building a transformed, inclusive, and sustainable industry together,” she affirms.

Khumalo notes that, since the introduction of the term “social licence to operate” in 1997, expectations from mining communities, including those in jurisdictions where legal licence obligations have been placed on mining operations, have changed.

“In the South African context, complying with legal obligations as contained in SLPs no longer meets expectations. Focus has shifted from legal compliance to social performance outcomes that include addressing issues such as food insecurity and the reduction of poverty.”

He stresses that right holders must ensure that they can continuously earn and retain their social licence to operate, as failure to do so has led to stakeholders “expressing their dissatisfaction”, including through protest action “that has had deleterious short-term impacts on operations”.

Khumalo says that, while many existing frameworks have delivered “much-needed social good”, indicators such as the GINI coefficient and the multidimensional poverty index suggest that more needs to be done to sustainably uplift and empower mining communities.

As an example, he cites the Minerals Council and its members’ roles in Business Unity South Africa-led structures in Presidential committees to ensure energy stability, functional logistics, and reduced crime and corruption.

The Nexus of Key Trends

In keeping with mining’s long-standing tradition of supplying the commodities needed to drive progress, one of the key objectives of today’s mining industry is to support the transition to a low-carbon economy, says Nicholson.

She notes that, as the world shifts to more sustainable energy solutions, the need for critical minerals will increase. “These materials are vital for the production of batteries, electric vehicles (EVs) and solar panels, and their extraction is central to the energy transition.”

However, Critical Minerals Africa Group (CMAG) chief strategy officer Olimpia Pilch cautions that most discussions about critical minerals demand are “led by ideological climate goals and targets, rather than industry realities”, adding that the implementation that will eventually drive demand will take time.

“The disconnect between policy ambitions and the private sector has become too large for policymakers and global organisations to ignore. Slowly, we have seen those initial astronomical projections reduce in size, although they still do not reflect market reality.”

Pilch notes that the pace of the energy transition is further complicated by China’s economic statecraft and consistent undercutting of more responsible operations that cannot compete with Chinese projects that are powered by cheap coal and benefit from direct and indirect subsidies.

She stresses, however, that “energy solutions” are only one of the end-uses for critical minerals, which also have agricultural, medical, technological and defence applications.

In the short term, she notes that “any critical mineral policies are unlikely to have a large-scale impact on global markets as those are so heavily dominated by China”. She comments that new US President Donald Trump’s policies are likely to focus on domestic extraction, processing and refining, as well as aligning allies to its cause of diversifying supply chains and breaking the existing Chinese monopoly.

“This is strategically important for many African nations as we will likely see continued support for projects to produce concentrates on the continent, to be shipped to the US for refining.”

Pilch points out that Chinese operations also face the challenge of meeting Carbon Border Adjustment Mechanism and battery passport regulations in the EU, and Foreign Entity of Concern rules and tariffs in the US.

“China needs to sell its goods to maintain employment and growth on the mainland – if those doors are shut, a desperate China, in need of maintaining employment and GDP growth, will likely result in increased market flooding. This can have profound impacts on critical minerals prices. In such a scenario, without government support and long-term offtake contracts with floor pricing, many ex-China critical minerals projects will fail.”

Consequently, a key CMAG objective is to advocate for practical solutions to create enabling business environments to produce critical mineral concentrates on the continent.

“Key challenges that must be overcome include lack of cheap and reliable power, poor rail infrastructure and grid networks, lack of regional interconnectivity, and limited transparency and legal and policy frameworks,” notes Pilch.

She explains that modern, cost-effective beneficiation models focus on locating refineries as close to the customer as possible, in locations where there is plenty of reliable and cheap power, with co-location of chemicals industries and access to deep-water ports being seen as favourable. “Special economic zones are advantageous”, while access to skills and expertise is a “must”.

Pilch points out that, while there are exceptions, sub-Saharan Africa lacks almost all the key ingredients to enable successful ore- to-metal capability.

Further, African leaders have not been able to provide a concrete offering or value proposition. “Sub-Saharan Africa is yet to industrialise and create robust downstream industries, particularly as the solid foundation of cheap and reliable energy, as well as associated infrastructure, is largely missing.”

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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