Community relationships crucial to prosperity of mining - CNBC Africa

Community relationships crucial to prosperity of mining

Mining

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A miner excavating gold at the Gold Fields Ltd Mine near Carltonville, South Africa. PHOTO: Getty Images

“The question is whether a mining company sees itself as a mining company or a transformative agent in society,” said Paul Kapelus, director of Synergy Global Consulting, at a panel discussion at the Investing in Resources and Mining in Africa conference on Wednesday. 

Environmental responsibility and conservation is a recurring topic in the mining industry. While corporate social responsibility makes up the fabric of a number of mining companies. Civil society and international institutions have begun to call for companies to take on a more social development role. 

“The relationship between any company and a community has to be a direct one – there cannot be a middleman,” said Sue Brandt, CEO of Managing Transformation Solutions, who was one of the panel members. 

The panel discussion, chaired by Fasken Martineau partner Andrew Mitchell, also included KPMG global sustainability lead for the mining sector Rohitesh Dhawan. 

Brandt added that too often the goal companies have had in establishing relationships with communities had been selfish and to the detriment of a community or its environment. 

In Gabon, the controversial conflict between Chinese consortium CMEC and a number of civil society leaders is said to indicate a relationship gone wrong. 

Since the discovery of  the Belinga iron ore deposit, a number of activists have challenged CMEC and accused them of exploitation. 

This was after it was discovered that the country would only receive 10 per cent of the profits after the Chinese company provided the necessary infrastructure the country needed  to tap and extract the ore. 

Gabon, like many other African countries, are resource-rich but desperately lack the infrastructure needed to extract and process its resources. 

In some cases, institutions and companies that offer to fund or develop the infrastructure and mining landscape end up pocketing majority of the profits in an unfair exchange for the provision of infrastructure. 

The opportunities of exploitation and unfair exchange bring to question governance and regulation models African governments continue to grapple with, particularly in South Africa. 

Amendments to the Mineral and Petroleum Resources Development bill has been the cause of significant uncertainty within and beyond the country's mining industry. 

“Mines are [no longer] islands, they are exposed to the political economies of their countries,” said Kapelus.

“In South Africa, the model of governance is broken, and it's going to take everybody to re-build that model.”

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