SA’s mining industry 'nowhere close' to dealing with climate change

While there is consensus that there is a need for mining companies to evolve to ensure they are futureproofed as businesses focus on sustainability amid risks brought on by climate change, industry experts and activists admit the sector is nowhere close to where it should be.

ANC president Cyril Ramaphosa at the party's Eastern Cape elective conference on 9 May 2022. Picture: Abigail Javier/EWN

CAPE TOWN - While there is consensus that there is a need for mining companies to evolve to ensure they are futureproofed as businesses focus on sustainability amid risks brought on by climate change, industry experts and activists admit the sector is nowhere close to where it should be.

Thousands of delegates from across the world attended the Invest in Africa Mining Indaba this week in Cape Town where a variety of subjects centred on investing in the energy transition, economies, and environmental, social, and corporate governance.

The gathering took place in person for the first time in two years due to COVID-19 lockdowns, but it appeared other factors in the global economy made this year’s event somewhat of a novelty.

High-ranking US government officials were among international dignitaries who were in attendance, with some experts saying the Russia-Ukraine war has edged countries most affected to look in Africa’s direction. There were also Japanese and Chinese businesses and officials in attendance.

However, albeit that South Africa has expressed an aching hunger for investment in the mining sector, the hurdles which prevent this from happening were also in the spotlight.

When he addressed the indaba on Tuesday, President Cyril Ramaphosa told delegates that the government was committed to mobilising the necessary resources and providing incentives for a new wave of exploration, more so for minerals required for the global energy transition. “The recently-released Exploration Strategy and Implementation Plan lays out South Africa’s plans to move to future strategic metals such as copper, nickel, cobalt, and rare earth,” he said.

He promised that red tape would be cut as he quoted the Minerals Council of South Africa’s data that should the regulatory burdens be resolved, the industry would be prepared to increase its investments by 84% over the next five years.

Law firm, Webber Wentzel’s mining division was concerned that while Ramaphosa’s message to investors hit the right notes, there were also points where he fell short of what is required from South Africa at this juncture. The company said his endorsement of oil and gas exploration in Africa during his address does not correspond with the country’s commitment to helping address global warming.

South Africa is among other countries in the world which have vowed to work on solutions to achieve net-zero emissions by 2050. The company also objected to other sentiments: “he omitted to address the challenge of unlawful protests which disrupt mining operations. He also did not clarify exactly who would be responsible for improving the living conditions of host communities, although the government is responsible for the provision of services such as education, water, infrastructure, and health services,” it said.

With ESG the main focus at the indaba, activists were also curious to hear how the sector planned to undo years of damage to the environment and communities where they operate. NGO, Just Share’s Executive Director Tracy Davis told Eyewitness News on the side-lines of the indaba that while companies decry regulatory burdens which hamper operations, she noted how they were silent on the devastating impact of mining on people and the environment. She accused the industry of being outspoken about sustainability and social protections for expediency. “Did anyone at this entire indaba mention the fact that a high court judgment recently said the air quality in Mpumalanga is a breach of our constitutional rights? no one mentioned that. So don’t tell me that you care about people and the environment in the same breath that you are talking about cutting red tape for the mining industry”.

Mark Bristow, CEO of Barrick Gold, the world’s second-largest gold producer who was among the first industry leaders to address the gathering said: “the mining industry has been at ESG for a while, it’s that some investors have just discovered it”. He quipped about how many who are against mining would not toss their iPhones in the bin (in protest).

With the indaba done and dusted, local mining companies and government will now have to turn their attention to the implications of the country’s dismal ranking by the Fraser Institute.

South Africa was ranked 75th out of 84 countries included in its investment attractiveness index, dropping down by 10 places.

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