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Why junior miners need to invest in social sustainability

By its nature, junior mining, and exploration in particular, is risky business. Not only do junior miners run the risk of not finding valuable enough mineral reserves, but they also risk having their explorative efforts frustrated by ineffective social and environmental management.

Exploration happens in a mine’s infancy, and future production will be impacted by the social and environmental aspects involved right from the start of the exploration process. Therefore, the earlier social and environmental aspects are considered in a project, the greater the chance of success the project has.

Exploration does not exist in a vacuum, it is part of the mining value chain. Tracking performance in all aspects of the exploration phase and generating clear governance reports gives junior miners an edge when it comes to attracting institutional investors and complying with regulatory requirements.

Junior miners must consider investing in technologies that are flexible and can grow with their evolving requirements, and that are as easy to use as possible, as well as being integrated – to release the burden of capturing data across multiple spreadsheets or point solutions.

Investing early in software management information systems can deliver extensive benefits throughout the life of the mine. Keeping auditable records of all community engagements, such as commitments made and grievances logged, as well as all environmental monitoring from day one, helps to safeguard the mine in later years. Social risk is now consistently regarded as one of the top ten risks mining houses face. This investment in technology needs to be weighed against the risk and associated possible opportunity costs of not engaging effectively with the community.

Free pre-informed consent from communities helps junior miners have access to resources. Geological research is incomplete without collaboration and cooperation with the communities because they can and will frustrate production efforts. Communities are the ones who ultimately provide access to the resource, in the form of the social license to operate. While the issue becomes more pressing during production as opposed to exploration, establishing good relationships with communities right from the start makes the path to social cooperation smoother.

Looking after your social and environmental concerns assists in obtaining permits, as well as attracting investors. Institutional investment is concerned with how you manage stakeholders and environmental sustainability. It is much easier for production to begin if the junior minors have already laid the groundwork for cooperation from the community. There have been too many instances of community protest action bringing mining operations to a costly standstill for us not to look at this from the start. You might as well get it right from the beginning, and make yourself that much more attractive to investors.

IsoMetrix is a proud sponsor of The Junior Mining Indaba, held from 5 to 6 June 2018 at the Country Club Johannesburg. Cecilia Jofré will be speaking in Session Six: “Creating a recipe for success: minimizing risks and improving the probability of a profitable junior mining project.”

 

Read more: Paul de Kock on Better Investment for Junior Mining