The Legacies of Mining
Looking at the bigger picture
During hundreds of years, mining became ingrained in the social and economic fabric of West African countries, but modern mining is still clumsy at defining its role in the economy and the society. Despite the contribution of mining to national GDPs, local employment, FDI, and impact on generating related businesses, the question of whether the benefits of mining outweigh its negative impacts is regarded with some doubt. Acknowledging this predicament, the industry is now more unhesitant and outspoken about its goal: to prove that mining can be sustainable.
Trevali Mining has proclaimed that it intends to become the world’s most sustainable mining company. Its president and CEO, Ricus Grimbeek, believes the industry has not been vocal enough about the positives of mining: “The issue of sustainability is much broader than greenhouse gas or water consumption, extending into the guarantee that people’s health and safety are protected, that communities around us are prospering and we can build a respectful and trustful relationship. We should look at society’s needs in the next 100 years and think of ways to obtain resources sustainably, rather than denying that metals are a necessary component of life. Ultimately, it is not about money-making, nor ticking climate targets in a greenwashing exercise, but looking at mining differently.”
“Poverty remains one of the greatest challenges facing the world today and in Africa gold miners can make a significant contribution towards the economic development of their host countries (…) This should go well beyond the payment of taxes and royalties and the creation of employment.”
Mark Bristow, Barrick Gold, President and CEO
During the difficult months of the pandemic, mining companies showed immediate support to host governments in West Africa. Barrick donated US$1.5 million to the Malian government; IAMGOLD donated over US$1 million across Senegal, Burkina Faso, Mali and Guinea, while Endeavour gave over CA$6 million to help the region combat the pandemic, and these are only a few examples. The fact that local communities can make use of testing facilities established by miners for their own employees is an example of the spin-off benefits of miners’ presence in a region. These examples extend beyond the pandemic: Gold Fields runs explicit “legacy projects” through the Gold Fields Foundation; one of these was the construction of a road between Tarkwa and Damang, the localities of its two mines, and the road can be equally used by the host community. The same applies to other investments in hospitals and, most recently, towards building the first airport in Tarkwa. Together with supporting infrastructure development, the mining industry has a broader socio-economic impact through creating jobs and business opportunities for related services. In Burkina Faso, more than 14,000 people are directly employed in mining, and there are 1,000 supporting businesses related to mining activity. Since mining offers well-paid employment that helps sustain extended families, the industry enjoys good levels of acceptability and positive community relations in West Africa. Most companies in the region hire over 90% of their employees locally. However, the discussion around how well-balanced the benefits of mining are spread between operators and their stakeholders is an ongoing one.
Fair tradeoffs
Led by reforms in Ghana, but also inspired by regulations in the oil and gas industry, local content laws are expected to become stricter across the region: in Burkina Faso, for instance, Emmanuel Yonli, lawyer at the SCPA KAM & SOME legal practice, explained what the current requirements stipulate: “Currently, mining companies are asked to hire locally where possible, and where the skills are available, rather than importing these skills from abroad. Also, mining companies are asked to procure local services and goods, to help the development of related businesses. In other words, they are encouraged to employ locals, but not demanded by law.”
In Ivory Coast, we find a particularly relaxed framework, also due to change: “At the moment, there is no minimum capital quota, except for the more general requirement to employ local people, but the Ministry has begun a review of the mining code which will be updated in due course, and local content will be brought to the table,” shared Eric Kondo, managing partner of MS&C consultancy in Abidjan.
Jane Banks, global mining recruiter at Stratum International, emphasizes there is little data to attest to the effectiveness of local content policies in actually generating employment and skills-transfer: “There is no one universal one-size-fits-all formula for promoting direct local employment, and the capabilities and level of development of each host government will be crucial in determining such outcomes. Local content requires a joint effort between governments and private entities to create an employment-ready workforce to match the demand with the supply- simply regulating demand is counter-productive without an adequate supply of people.”
People
Lockdowns, remote work, job disruptions, and the growing reliance on technologies are having a deep impact on the people at the heart of the mining industry and on who these will be in the future- young or middle-aged, local or foreign, working on-site or remotely. Our sources indicate that, in West Africa, top roles are typically occupied by white men aged over fifty, yet operations are run mostly by locals, at a ratio of 20 locals to one expat. However, the pandemic has created new concerns about the safety of travelling; concerns which may put off the prototypical executive from working in the region. Will Coetzer, managing partner of Stratum International, believes West Africa may face a great challenge in attracting the workforce it needs: “Some people were stranded for months on-site in West Africa, making significant personal sacrifices during the pandemic. When the situation stabilizes, I expect they may reassess their risk-taking. (…) West Africa is a very expat-driven, fly-in, fly-out market, with no readily self-sufficient labor.”
On the other hand, Africa’s population is the youngest in the world, more fit to deal with the health hazards of the pandemic, and more inclined to see mining as a preferred career choice at a time when the global appeal of this industry has been fading. Coetzer believes the technological transformation the industry experiences will be the main incentive for young people to take up mining. The African Development Bank’s Regional Economic Outlook also identifies Africa’s youth as a central pillar in the post-Covid-19 recovery, but the question remains, how prepared is the local labor for such endeavors, especially considering that the nature of jobs is changed by digitalization.
"An inevitable challenge West Africa will face is its ability to attract the qualified workforce it needs: As people start reflecting on their lives, they may feel less enticed to travel and instead choose opportunities in their back garden.”
Will Coetzer, Managing Partner, Stratum International
Technology
The pandemic has speeded digitalization from the basic use of digital platforms for communications, to re-instating the importance of tech solutions in replacing people to reduce risks. West Africa is known to be slow on the uptake of technology, but that has not discouraged services and equipment providers from advancing their R&D agendas, motivated, first and foremost, by improving safety standards. Equipment providers, in particular, have been taking the lead with automated processes that minimize human contact and increase precision. Saudequip, for example, uses telematic systems through which it monitors the position and consumption data of its machines, and now the Caterpillar distributor is working on a new project to use drones for urgent delivery of parts of up to 10 kg in remote destinations.
Also making use of drones, exploration services company SEMS Exploration has introduced helidrones for specialist topographic and orthophoto surveys to generate data in exploration prospects; moreover, it has also found solutions to process some of the data faster: “The exploration industry in West Africa can be conservative in terms of adopting new technologies, but we see some of these innovations as real game-changers for the sector. For instance, we make use of an in-field geo-analysis lab, which includes a portable XRF unit, a mobile crusher, a pulverizing mill, and a hydraulic press, all very compact tools enabling us to complete repeatable, multi-element XRF analysis in-country and to reliable standards, saving us both time and money,” said Simon Meadows Smith, managing director.
Security is also approached from a tech perspective. MS Risk, a risk consultancy based in London, has developed a database of security incidents, called D-Risk, through which it maps instances of kidnapping, confirmed terrorist activity, violent crime, and public disorder: “D-Risk contains over 17,000 security incidents plotted. These have been inputted from a massive open-source monitoring system, fed by our analysts, our internal sources on the ground, and other private sources shared with us. (This helps) companies in the Sahel to understand the environment they are present in,” said CEO Liam Morrissey.
Portability, independent applications, and more control are other key variables pursued by technological innovations. DHL, the creator of the track and trace system, has taken the concept further by providing more interactive platforms that connect customers to the GPS location of their shipment. But another driving force of tech innovations are environmental considerations; for example, Mincon’s latest R&D project is a green hammer system, currently in the late phases of development.
Maxam also introduced this year a new concept called X-Energy, an explosives technology that integrates selective energy application with rock properties, such as density adjustment, in an automated process specific to each project. This technology is not only predilected on customization for the sake of increasing efficiency, but it also has an environmental component: “The technology is based on the idea that each mine operates within an external environment, not only geological but also natural and societal. Modular technologies ensure we are perfectly matching the specifications of each environment,” explained Bernard Kaninda, Africa Regional Director.
Environment
Rather than falling to the back of the priorities list in 2020, environmental concerns are becoming more central in light of the pandemic. The current crisis has brought closer to home the potential imminence of other crises, be they natural or man-made. For miners, ESG and safety requirements have consistently become more comprehensive; the challenge is to implement these evenly across the world. For years, NGOs like Transparency International have been watchdogs for accountable mining, especially in countries with high levels of corruption, but there are also clearer and stronger international guidelines. The launch of the Global Industry Standard on Tailings in August this year is a prime example in this regard.
“The Global Tailings Standard has been looked at from every different angle: governance, technical requirements, disclosure and transparency requirement, initial impact assessments, and the full range of environmental, social, and technical aspects. It will ultimately be supported by implementation protocols that will provide detailed guidance for certification, or assurance as applicable, and for equivalence with other standards.”
Tom Butler, CEO, International Council on Mining and Metals (ICMM)
The most crucial point on the environmental agenda is the transition to renewable energy. Mining is an energy-intensive business, and electricity costs are particularly high in West Africa, though even more expensive is building the infrastructure for renewables. However, the bigger miners are already looking at renewable alternatives: IAMGOLD is commissioning the world’s largest hybrid (solar and thermal) plant at its Essakane mine in Burkina Faso, in partnership with One Drop Foundation. From a cost perspective, the plant is a breakeven project, but the company sees the advantage of insulating against volatility in oil prices. Gold Fields is also seeking to replicate the success of its impressive hybrid renewable project in Australia to their Ghanaian operations, where part of the mine is powered with solar sources. In Ghana, the government has required that all miners source a minimum of 10% of their electricity supply from renewable sources by 2030. Miners alone are limited in driving environmental changes; all actors in the value chain needing to align with the same goal. The largest players are the first to come on board; for example, DHL plans to curb pollution and have zero CO2 emissions by 2050: “DHL will be neutralizing the carbon emissions of all less-than-container load (LCL) ocean freight shipments from January 1, 2021. The CO2 compensation for all LCL shipments will be achieved by using maritime biofuels, and the costs will be absorbed by DHL for the environment,” said Serigne Ndanck Mbaye, CEO West Africa and country head Ghana.
Images courtesy of Roxgold