Notes and musings from #MI25

I’ve just returned from lovely sunny Cape Town and #MI25 (aka the Investing in African Mining Indaba ), the continent's biggest mining conference, and as I adjust to the near-freezing London temperatures I thought I'd record a few impressions of the event before they merge/fade in my memory or get shuffled to the back of the pack.

Before the event started in earnest, I spent much of my Sunday at the Indaba's Ministerial Symposium - a (very!) long morning of addresses, discussions, and roundtable 'brainstorming' during which African mining and energy ministers and local industry leaders get to engage at close quarters and share opinions and perspectives, whilst updating each other on proposed plans and solutions. I have been privileged to attend this forum for several years now and find it offers some useful insights, not least in allowing me to gauge the ‘mood music’ of Africa’s policy makers on mining, energy, and (to some extent) climate-focused and socio-environmental issues. Whilst I don't wish to dwell upon the negatives, I do think it worth commenting on some repeated positions that struck me as potentially counter-productive - obstacles that might inhibit the mining sector (in Africa and elsewhere) in fulfilling its potential as a creator and distributor of value.

There was much talk of continental self-sufficiency (‘African solutions – for Africans by Africans’ was a phrase I heard more than once). This may be an understandable response to historical and post-colonial challenges, and the overhang from the extractive sector’s troublesome legacy issues... And attempting to build local resilient economies is clearly a laudable aspiration! However, it can also be argued that if countries veer towards nationalism and relative isolationism, they will inevitably limit their opportunities. As others have noted (i.e. the World Economic Forum commenting on very different circumstances a decade ago - and things have hardly improved much since!): “In an interdependent world, isolation is no longer a source of pride; on the contrary, it is a cause for concern.”

We live in global markets, with global supply chains. Identifying growth opportunities (as new markets emerge and evolve) often requires vision and constructive engagement across multiple borders, hopefully leading to mutually rewarding business/trade along each segment of the value chain. Many of the comments I heard from politicians suggested they didn't seem share this view.

Many contributions seemed to assume markets are more driven from the supply side (shaped, at least partially, by the 'power of the state' - another phrase that featured heavily in one notable keynote address), and that an expanding and abundantly young population will, almost inevitably, create a growing internal/African market. This might then allowing countries on the continent to avoid or minimise foreign trade and bothersome overseas investors. Unfortunately, there were few ideas presented that offered any pointers as to what might economically empower and enrich this population sufficiently to allow it drive local consumption and demand. (The discussions around local beneficiation also seemed a little skewed towards a rather optimistic view of the potential local value created by minerals processing.)

Finally, I think there was a major under-estimation by some ministers of the substantial value already created in-country by the industry, at least (as it's the sector I know best) in relation to gold mining. Our (that is, the World Gold Council 's) data repeatedly shows that the majority (roughly, 60-80%) of gold mining expenditure remains in the host country. And that value can catalyse wider socio-economic development. But one of the conditions needed to ensure this value-add is sustained (and can contribute to enhanced local revenues and income levels) over time is stability and consistency in policy frameworks and regulations, alongside a shared recognition between public and private sector players of the conditions needed to drive progress and growth. Furthermore, as several people commented at the Symposium (often citing the role of the EITI (Extractive Industries Transparency Initiative) ), you also need transparency regarding the source and destination of financial flows from mining operations, to enable local people to better understand the nature and value of mining’s economic contributions and impacts.

All this is, of course, nothing new. But it strikes me as a little worrying at this point in history, not least given the scale of new opportunities presented to Africa and its generous endowment of the minerals needed to drive a global economy in transition. (I was also disappointed to note the stubborn reassertion by many African nations of the central role of fossil fuels in their economic prospects, but that's another story...)

That said, many of the discussions - unsurprisingly, there were a lot of them - around 'Critical' and 'Strategic Minerals', and the reinterpretation of those classifications from an African perspective, made a lot more sense to me. Several politicians and mining leaders mentioned that the economic, social and environmental impacts of mining cannot be overlooked by western governments as they seek to shore up their vulnerable supply chains and secure 'remote' metals for national industrial - e.g. clean energy, tech and defence - needs. But precisely what is 'critical' is relative, and all the national/regional lists naming the much-needed metals, reflective of fairly narrow country-specific interests, risk reinforcing schisms between developed and developing nations. They also ignore or deflect from the simple fact - as it relates to Transition Minerals - that a decarbonising economy needs global complementary solutions.

Turning to gold, clearly it is not critical in the prevailing (some might say, 'Western') sense; its supply isn't threatened, and it is not used in bulk (although it is present) in clean tech and infrastructure. But that is only a partial view which ignores the African perspective, where gold is frequently a vital component of local and national economies, and gold mining is often the first mover in bringing renewable energy to emerging economies and remote locations. In many instances, gold mining has taken a leading role in both decarbonising its operations and building local climate resilience; without it, we'd still be waiting for governments or local authorities to act, when they may not have the resources (and/or political will) to do so. It was therefore gratifying for me, having banged on for so long about gold's role as a catalyst of change in this context, to hear others echo or align with my arguments.

I also found additional causes for optimism...

In several comments and ministerial contributions, there was evidence of progress on key technical issues and processes that may promise greater accountability and efficiency in the development of mining projects in some key African jurisdictions (alongside firm indications that a higher degree of socio-environmental awareness is now a core part of industry thinking). There was also wide acknowledgement that transparency, data sharing, and the use of technology in supporting progress on responsible sourcing issues is a both key challenge and a substantial opportunity for players across minerals supply chains.

I also glimpsed hints that the often insular and sometimes blinkered mining industry increasingly grasps that it needs to find additional ways to build trust beyond its immediate stakeholder groups, a theme that we at the WGC and our friends at the ICMM have been seeking to address for some time.

I was also pleased to note that one of the buzzwords of the conference was 'Collaboration'. Even if used in many different ways and contexts, I took this as signalling a greater acceptance of the need for risk sharing and relationship building across borders and industry segments and siloes. We might hope that, ultimately, this spirit - of alignment, convergence, and agreement on collective goals - will prevail and propel the industry forward (as isolationist and fragmentary tendencies fail and fade).

Possibly reflecting that greater interest in pulling the industry together to address common objectives (and stakeholder and societal expectations), I noticed the discussions around the Consolidated Mining Standard Initiative (CMSI) appeared to be well received by diverse audiences. Sitting in on a few of these sessions, I thought the motivations behind - and potential advantages of - a harmonised standard, defining responsible and sustainable practices for the whole mining sector, were explained clearly, but there was also an honest consideration of the challenges and obstacles to progress. I know that, from the WGC's perspective (but am confident this would be recognised by nearly all the CSMI's members and advisory participants), this hugely complex endeavour has already produced 'adjacent' benefits - not least in helping to build trust and shared understanding across a wide range of industry groups and stakeholders.

Finally, and with both negative and positive connotations, I have never witnessed the issue of Artisanal and Small-scale Mining (#ASM) given so prominent an airing at an Indaba. My colleagues at the WGC focused a lot of time and effort at/around the conference to progress our different projects striving to identify and support potential scalable solutions to advance the formalisation of responsible ASM. These are built on collaborative partnerships with several of our Members and, for example, 世界银行 . At the same time, we remain eager to identify and reinforce practices, rules and boundaries that might isolate the nefarious (and often dangerous and destructive) actors that dominate many informal, ASM operations and mineral flows. Many of the factors which shape the nature and growth in ASM activity - extreme poverty and lack of alternative livelihoods, minimal local government support or capacity, absence of the rule of lew, etc. - are far greater challenges than any one industry or set of market actors can address. But at least there is now a far more widespread acknowledgement - across government and industry - of the problem and the need for shared solutions which might create positive development opportunities whilst reducing the dreadful negative impacts.

I left #MI25 and South Africa pondering the tremendous challenges facing the mining industry (and minerals supply chains), but also buoyed by the prospect of an industry in transition that, if properly directed, can make a major potential difference in many lives and economies (in Africa and beyond). In coming together, to shape responsible mining with an eye on creating value and delivering positive impact, we can find reasons to be cheerful, in addition to the blue skies, sunshine, and many charms of the Cape.