Mining companies and regulators are placing a greater focus on not merely rehabilitating land post-closure but leaving behind sustainable industries and prosperous communities, write Webber Wentzel partners Jonathan Veeran, Garyn Rapson and Bruce Dickinson.
Sustainable development is not a new theme in mining. It first raised its head in the mid 1990s.
In the early years, many companies merely published lengthy statements asserting their commitments without any concrete proposals for implementing them.
Today, companies are moving away from declaring high-minded goals and towards demonstrating a targeted focus on projects that will create sustainable communities and employment, post-mine closure.
Taking sustainability seriously
This is clear from the increasing number of miners who have voluntarily signed global compacts such as the International Council of Mining and Metals’ 10 Principles on Sustainable Development, the UN Global Compact, Paris Pledge for Action and the Global Reporting Initiative’s Sustainability Reporting Guidelines. All these treaties focus on deriving better long term, sustainable benefit from a nation's natural resources through the creation of a social compact between government, labour, business and communities.
Mining companies are making a serious effort to implement the circular economy, since the mining industry is experiencing pushback to re-use or reduce waste. Re-use and more efficient use of minerals presents a problem of shrinking demand but miners that can prove they are extracting ore in the most responsible way and actively participating in the circular economy will encourage use of their product over that of their competitors’.
In South Africa, Mining Charter III contains provisions that emphasise the necessity of creating sustainable communities long after the mine shaft has closed. Recently, new draft regulations on social and labour plans were published. Proposed amendments to the National Environmental Management Act (Nema) financial provisioning laws should allow mines to use rehabilitation funding to help create sustainable communities, moving away from merely returning land to its pre-mining state and rather ensuring that affected communities can flourish, post-closure. Local law is following global trends in Germany, Australia and China, where mine land and infrastructure is being seen as an economic opportunity, not a cost. Environmentalists are concerned that this will make environmental restitution a secondary consideration. But, in South Africa, the intention of draft amendments to Nema is to ensure that environmental damage is addressed before the land can make the transition to a new economic use.
To meet their own needs, mining companies build roads, water pipes and power supply. Post-closure, this infrastructure can easily be adapted for other industrial uses, such as agriculture, agri-processing, tourism or power generation.
A more holistic approach for the future
In fulfilling their various obligations for corporate social investment, social and labour plans and mine rehabilitation, mining companies have spent millions of rands on projects that are often duplicated by other mining companies in the same region.
Webber Wentzel, in partnership with MineCare Evolution, has devised a new approach, based on an Economic Development Plan (EDP). An EDP sets out how a mining company will establish, manage and fund its long-term sustainable development projects, in a co-ordinated manner. This provides the opportunity for developing more projects, organising projects around a “hub” approach and participating more holistically in Municipal Integrated Development Programmes.
An EDP can use independent funding models, which reduce the burden on the mining company and provide the potential to access funds set aside for rehabilitation. Mining Charter III allows communities to develop their own projects, showing a realisation that entrepreneurship needs to be encouraged in local communities. Over the years, mining companies have established a number of community trusts, which could be a source of finance in the short term.
An EDP can be shaped around opportunities arising from recent regulatory developments, such as beneficiation offsets, and achieve compliance with both the Mining Charter and the company’s own social and labour plan. It can also be designed to implement the UN’s sustainable development goals.
Each mine and community requires an individually-tailored EDP, based on the funds available and the environmental situation. A full EDP involves an initial assessment, development of a plan and advice on implementing it, covering all aspects including legal compliance, communication and monitoring.
Jonathan Veeran, Garyn Rapson and Bruce Dickinson are partners in Webber Wentzel’s Johannesburg office.
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