Focus on sustainability

Focus on sustainability offers fresh investment prospects in the mining sector

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A sharper focus on sustainability at this year’s Investing in African Mining Indaba in Cape Town a few weeks ago has started to translate into a different way of looking at mining, and with it, more opportunities for investment. 

Investors and partners are upbeat about the opportunities in mining in Africa, and are starting to see an increasing number of prospects in renewable energy in and around mines and within mining communities. 

“They range from power to heating, air conditioning and cooling, transport and associated green tech like waste-energy and water purification,” said Gareth Pollit, Director, Africa Advisory for international and consulting network, Moore Stephens.  

“Energy audits and energy management are increasingly of interest to companies that are delivering against sustainability metrics,” said Pollit.  

Moore Stephens has been making inroads in the renewable energy space.  One of its projects includes advising a large mining client in West Africa in assessing potential opportunities for a much more wide-ranging use of renewable energy in its operations. This would involve complementing its existing energy supply with solar power and battery storage. 

Improved battery storage solutions could be applied in everything from site offices to setting up solar power hubs in mining communities, believes Pollit. 

Community sustainability had far more focus at the Investing in African Mining Indaba this year. 

“Planning from the early stages to involve key stakeholders, including community leaders, is getting a lot more attention and companies are now appreciating the need to get it right from the get-go,” said David Tomasi, Global Sector Leader for Energy, Mining and Renewables (EMR) for Moore Stephens.  

Apart from traditionally strong mineral-rich countries, there is also investment potential in Kenya, which has minerals and thermal energy. Mauritius is also becoming attractive as a gateway for investing in the African mining sector, as it offers a low tax regime and various agreements to protect investor rights. 

The Investing in African Mining Indaba 2019, held in the first week of February, is expected to lead to many deals and partnerships in countries across Africa this year.  The bumper 25thIndaba brought together 7,000 participants, including the Presidents of South Africa and Ghana, 35 government ministers, the CEOs of global mining and exploration companies, international investors, investment banks, mining equipment companies and mining service providers. 

Tomasi said the Mining Indaba had acknowledged the importance of building trust through partnerships, especially in light of changes to mining charters and legislation in African countries. He called for incentives from governments to encourage mining companies and service providers to get involved in new projects and in furthering existing ones.  

Olivier Barbeau, Managing Partner, Moore Stephens Johannesburg, said that while the investment climate was changing with a revised Mining Charter in South Africa, more policy certainty was needed. 

“Policy certainty and the rule of law is critical to getting mining projects off the ground,” said Barbeau. He also cautioned that currency fluctuations had a huge impact on international deals and that stability was key to delivering successful investments.  

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