Company Corporate Social Responsibility - Spotlight on African Mining Companies
Mining Company Corporate Social Responsibility – Shedding Light on African Mining Companies
Ethics and Ethical business practices are still key drivers of commitment to community relations and sustainability, but our survey turned up an increasing number of other practical reasons for work in this area.
Sovereign risk, loss of title, nationalisation, and local discontent: all these are principle risks to the value of an asset. The last ten years have turned up numerous examples of culture clashes or ignorance that have undermined projects, sometimes fatally. Investors and offtake companies need to see that companies are able to become a genuinely useful part of their host region, and able to offer long-term incentives to retain the status quo.
Mines, by their nature, are also often located in remote regional locations: as a result, good community work is often easy to overlook or to ignore for opponents of a project located a few hundred miles away in a country’s urban capital. To counter this, resources companies need to be able to manage sovereign risk by having a visible ‘tail’ of proven, best-practice local projects; a current programme; and clear future commitments.
The negative stereotype of voracious resources companies being held to account for a percentage of their revenues by autocratic governments benefits no-one in the long run. With increasingly expensive debt and difficult equity markets, companies and regions need to present united fronts in demonstrating good citizenship combined with solid, pragmatic legislative mining codes.
This whitepaper from Mowbrai highlights the importance relevant, consistent community programmes which sit alongside best practice environmental procedures and bring enormous benefit for natural resources companies. From ethical investing to the ability to sell assets, a clean bill of health with regard to good citizenship is a precious asset that adds real value. It is a sign that management understands the importance of managing sovereign risk to the wider investment community, debt provider or offtake partner.
Mowbrai believes the commodities marketplace is rapidly evolving and the need for resource companies to deliver focused operational programmes that build asset worth has only increased in difficult equity and debt markets.