3 months ago

Journal of African Business Issue 5

  • Text
  • Infrastructure
  • Sectors
  • Energy
  • Continental
  • Technology
  • Finance
  • Trade
  • Invest
  • Business
  • Africa
  • Countries
  • Tourism
  • Continent
  • Solutions
  • Global
  • Projects
  • Mining
  • African
Welcome to The Journal of African Business - a unique guide to business and investment in Africa. Every edition carries editorial copy covering the following general topics, with a wide range of subjects within each broader economic sector: energy; mining and exploration; trade; finance; technology and tourism. In addition to this, special features on topical matters will be published periodically, along with country profiles. In this edition, the in-depth interview with Aggreko Head of Sales, Southern East Africa, Max Schiff, makes clear how important captive power is for the future viability of a wide variety of projects in Africa. As Schiff points out, the extractives industry has long been a leader in the application of captive power, given the remote location of many mining operations, but the flexibility and ESG advantages that captive power using renewables offers is making it an ever-more attractive option for many different sectors.


AFRICAN MINING IN THE ESG ERA FTI Consulting has done a deep-dive into the challenges facing the African mining sector in the era of enhanced environmental, social and governance reporting (ESG). What follows is a summary of the main points of the 14-page study, “Evolution in African Mining. Investing in the Energy transition, ESG, and the Economies”. Credit: Pixabay Sara Powell, Managing Director, Sustainability and ESG at FTI Consulting United Kingdom TThe demand side of global energy places immense pressure on the mining sector, which is perceived to make a significant contribution to CO2 emissions. Now, mining companies with extensive social and environmental footprints are coming under greater scrutiny by investors, civil society and governments. In Africa, the ESG challenge is the legacy of environmental damage and irresponsible mining practices, therefore there is a need to create guidelines for the continent. In “Evolution in African Mining: Investing in the Energy Transition, ESG and the Economies”, FTI Consulting addresses the questions and possible responses on growth, costs, risks, capabilities and licences to operate that confront the mining sector in Africa and globally today. Based on research gathered through the FTI Consulting Resilience Barometer 2022, the mining sector seems to be under the most pressure from the current focus on ESG concerns. In fact, nearly half of the companies polled reported that they are under increased pressure, and one-third said that they are falling short on ESG reporting. As a result, while recognising international decarbonisation goals, mining and metals companies understand that their own ESG goals are now under ever-closer scrutiny. “The ESG shift does not mean discarding possible down-side risks. Instead, it is seen as having a business strategy that seeks new opportunities from the transition to sustainability that is underway, understanding that there will be disruptions and unknown risks to manage within this,” says Petrus Marais, Head of FTI Consulting South Africa practice. These factors will impact the sector across four major areas of concern. STAKEHOLDER ENGAGEMENT While one in five companies in the extractives sector stated they were under pressure to strengthen external stakeholder relationships, one in two chief risk officers felt “extreme pressure” to improve external stakeholder relationships. Greater 10

ESG IN MINING collaboration with external stakeholders, including customers and the supply chain, will be essential in embedding the demands of a circular economy in the mining lifecycle to reduce its carbon footprint and ensure improved materials footprints.. ESG The mining sector finds itself at a complex juncture requiring transition management strategies that acknowledge the increased demand for raw materials driven by the mineralintensive clean energy technology and a more aggressive stance on curbing their environmental impact. The global strategy along the decarbonisation and ESG compliance route is complex and multifaceted and it will alter the mining sector, while also providing opportunities and challenges. CIRCULAR ECONOMY The mining sector is aware of the complex environmental risks – primarily from mining waste – that accompany its operations, and the option of displacing those from one environment to another is no longer tenable. Implementing circular economy thinking, such as focusing “on getting more from less” and adhering to waste-reducing principles – reduce, reuse, recycle – will improve the sector’s sustainability and long-term profits. Such practices would go a long way towards satisfying stakeholder concerns around ESG compliance. SOCIETAL IMPACT OF MINING There is far more at stake in the mining sector than increasing exploration costs. The cost of ignoring the S in ESG can be massive. The complex ESG environment means businesses are under the scrutiny of social activists, shareholders, regulators, consumers and the media. Crucial to this success will be the management and monitoring of carbon and wider materials footprint by accurately quantifying, measuring and communicating the data collection. Research shows that 90% of the mining sector sees the need to align business strategy to social purposes. In addition, 90% also saw the transition to a more sustainable business model opening the doors to new opportunities. As Sara Powell, Managing Director, Sustainability and ESG at FTI Consulting United Kingdom, says, “Organisations – across every industry – that ignore the acceleration towards net-zero will not only be highly vulnerable to climate risks but will also be ill-prepared to capture far greater stakeholder value by acting on transition-led opportunities.” The full report can be seen at: About FTI Consulting FTI Consulting, Inc. is a global business advisory firm dedicated to helping organisations manage change, mitigate risk and resolve disputes: financial, legal, operational, political and regulatory, reputational and transactional. With more than 6 900 employees located in 30 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges and make the most of opportunities. The company generated .78-billion in revenues during fiscal year 2021. In certain jurisdictions, FTI Consulting’s services are provided through distinct legal entities that are separately capitalised and independently managed. For more information, visit and connect on Twitter (@FTIConsulting), Facebook and LinkedIn. Reporting in the mining sector is becoming ever-more complex. Credit: Thungela Resources 11

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