The cost - and value - of ESG in mining
Environmental and social commitments have become controversial amid a backlash from some conservative political groups in Europe and especially the US, but many companies are still committed to delivering more than just profit.
The mining industry has a reputation. And international mining operations in Africa especially. In terms of environmental impact, worker exploitation and the distribution of benefits, resource extraction or exploitation has become a byword for malpractice.
Changing that is complicated and, most of all, expensive. But for an increasing number of companies, Environmental, Social and Governance issues (ESG) are a business imperative.
“You have to be responsible miners. The local legislation demands it. The first thing that investors ask is the want to know what we're doing on the ESG front. So it just makes total business sense,” Peter Geleta of Trinity Metals told Global South World.
He acknowledges the cost in financial terms: the measures needed to neutralise the environmental impact of heavy industry; training and supporting a workforce which is severely under-educated; developing communities in isolated areas.
From Colonial to Corporate
Trinity Metals was born two years ago, picking up operations that began almost 75 years ago in the then Belgian colony that is now Rwanda. It mines tin, tungsten and tantalum - metals critical for technological transformation.
However, a legacy of underinvestment, exacerbated by the impact of the pandemic, had stripped down operations with a significant cost for workers and the surrounding area.
With programmes for building and maintaining roads, investing in healthcare and education as well as cleaning up decades of waste, Trinity hopes to establish itself as a company that can meet the highest US and European standards for investment.
Even after the initial work is done, the costs of maintaining ESG commitments will still be in the region of $5,000 per ton of tin extracted, Geleta estimates. With market prices riding high around $33,000, that nevertheless remains a significant slice of profits.
But the company’s work so far has already been endorsed by the US International Development Finance Corporation with a $3.9 million grant to accelerate skills building, environmental impact assessments and remedial work.
As part of employee wellbeing, safety is front of mind.
The Lost Time Injury Frequency rate calculates the number of injuries per million hours worked that resulted in a worker having to miss a shift. Two years ago, when Trinity Metals was established the mines’ rate was around 3.5. Today it stands at 0.6, against a global industry benchmark of 0.5.
Gender equality
One of the major challenges miners have faced are attempts to create a more diversified workforce in the face of longstanding stereotypes.
Vale Base Metals CEO Deshnee Naidoo warned in a recent interview that a renewed ‘anti-woke’ agenda is undermining attempts to remedy the decades-long problem of female underrepresentation in the mining industry,
Generally, Rwanda has been a pioneer in equality, boasting a higher proportion of female politicians than any other nation. Trinity is still lagging behind that kind of performance. But Geleta is looking to narrow the gap. From 17% currently, as the biggest private employer in the country, he’s aiming to reach 30% female representation in the workforce as soon as 2027.
