Compiled by Moses Chege Kasaija.

Recently, the mining industry has been experiencing a spate of accidents, intense social conflicts and political debate, in both developed and developing countries which have focussed attention not only on the mining industry but on its financiers, investors, lenders and insurers as the costs of mitigating the environmental and social damage can be enormous.

In a report, drafted and initiated by UNEP, the World Bank, and the Mining Minerals & Sustainable Development (MMSD) initiative, investigating the role of financial institutions in improving the environment and social performance of the mining sector, nothing brings change to company behaviour quite as swiftly as financial gain (or loss).

The spate of these mining insecurities has started to impact the financial performance of some mining projects unexpectedly. Governments, multilateral agencies, and civil society including labour, indigenous groups, local and international NGO’s are demanding higher standards for economic, environmental and social performance of mining projects. These demands mean that some mining companies sometimes experience delays in project implementation resulting in difficulties to recover invested funds. Such complications are noticed by the financial industry as portfolio and reputational risks are assessed, influencing access to capital and shareholder value.

The World Commission on Environment and Development defines sustainable development as development that meets the needs of the present without compromising the ability of future generations to meet their own needs, and to borrow from the Golder Associates website, across the globe, companies and governments are creating the world of tomorrow. They are building vital infrastructure, developing projects, restoring landscapes and renewing their economies with sustainability in mind.

Sustainable mining is not just about ticking the right boxes; it is about having a clear conscience to make profits without negatively impacting the rights of humanity and the environment. The trick to sustainable mining is to find a common-ground where there are no losers.

In his recent article titled, ”Financially Sustainable Mines”, Kerron Johnstone, Mining Services lead at global consulting firm Golder Associates, was of the opinion that strides made in recent years have put the South Africa’s mines on a path to sustainability. However, prudent financial management is required across the board to ensure all other facets of sustainability be realised in the long term. Financial wellbeing is therefore the first of three prongs that needs to be upheld along with equally important environmental and social sustainability issues. Johnstone, referred to the traditional three-legged pot with its valuable contents teetering precariously over the ashes. If any leg fails, the spoils land up in the fire and all is lost.

South African mining companies are keenly aware of this and most mining houses are striving towards complete sustainability. They want to do the right thing and have gone far beyond just ticking the legislated boxes to do so. In most cases when things go wrong it is as a result of mines, or even the industry as a whole, finding itself in unfamiliar territory, he said.Take for example the unrest in the Platinum Belt of Rustenburg. The mines thought that they were talking to the relevant unions, only to find that a newcomer had emerged and thrown the cat among the pigeons. These were unforeseen occurrences and as a result the system has become unbalanced.”


He wrote that financially viable solutions will need to be found for these and similar situations in future. Rising wage costs may force marginal operations to be shut down and everyone loses. Likewise, the cost of environmentally responsible mining might be too high a burden for others to carry. These cases test the wisdom of mining these operations in the first place and can only ever be dealt with on an individual case-for-case basis.

In general however, South Africa is blessed with a wealth of mineable riches. As a percentage the amount of mines that aren’t financially viable is a relative drop in the ocean. Profitable mines make up the bulk of the industry which contributes a significant 10-15% of the country’s overall GDP. As a percentage of exports the figure is far greater at about 35% and is the country’s single most important measure to balance trade deficits.

These figures underscore the importance of getting it right in the mining sector and all stakeholders need to become keenly aware of actions that they take today, which will have consequences in future. To a large extent existing mines need to manage the operations according to the three principles of sustainability i.e. financial, environmental and social.

Future mines have the benefit of hindsight and should use it to carefully plan for sustainability. As long as all factors are carefully considered and plans are made to address each leg of sustainability, then the mine has the likelihood of creating wealth without polluting the environment or causing social ills, he advised.


Furthermore, future mines be designed from the beginning with sustainability in mind, Johnstone emphasised, owners will need to look at the availability of resources and gauge long-term demand for their commodities. Pricing issues need to be examined as do capital costs and running expenses. Thorough investigation must be carried out to verify deposits and independent assessments and valuations must be carried out to determine both the quality and quantity of mineable assets.

Environmental consideration need to include feasibility of mining without irreversibly impacting natural ecosystems. Long term rehabilitation costs need to be carefully calculated and surrounding communities and government authorities need to be engaged to not only ensure social acceptance of the mine, but also to obtain buy in from the future labour force as well as government to provide the correct infrastructure to sustain communities. Long term closure plans need to be put in place even before the mine is opened and a positive legacy should be planned.

If expenditure on the project outweighs profits then the venture is doomed to fail in the format proposed and stakeholders should go back to the drawing board. If, by contrast the exploration and investigation team can tick and exceed these requirements, the mine is sustainable and will attract the right kind of investment to proceed and succeed in future.

When experienced experts such as Kerron Johnstone from Golder dedicate their time to inform, educate, predict, advice and provide solutions about or to issues that can lead to sustainability in the mining sector as a whole, governments, financial institutions, communities and labour unions ought to take a listen.

As a global, employee-owned organisation with over 50 years of experience, Golder is driven by the purpose to engineer earth’s development while preserving earth’s integrity. They deliver solutions that help clients achieve their sustainable development goals by providing a wide range of independent consulting, design and construction services in specialist areas of earth, environment and energy.