Gold Mining ESG Factors in The Value-Creation Lifecycle
Value creation in the mining industry has moved from purely being able to supply gold, to having sustainable, ethical, and environmentally cognizant operations. In the past year alone (2020) Pan African Resources has reinforced its Environmental, Sustainability, and Financial pillars as a business.
As a firmament for the future growth of ethical mining, underlying business considerations still have to be accounted for. In this respect, PAR revenue for 2020 stands at $273.7million, while the total amount of gold sold was 173,864 oz. These business considerations are the catalysts for the three pillars mentioned above.
With the amount of gold sold and revenue made, the mine can investigate ways to make operations ever more sustainable. Sustainability feeds directly into the environmental impact pillar, whereby limited environmental degradation is the goal.
Finally, the finance pillar is the one which ensures that operations themselves continue; surrounding communities have means of employment; and all stakeholders across various strata are accommodated.
Gold Mine Sustainability Starts From The Ground-Up
One thing to be noted about any actions taken by an ethically responsible gold mine is that none of these actions exist in isolation. By making sure that community members are thoroughly engaged and listened to, the mine ensures that its larger Environmental, Social, and Corporate Governance (ESG) goals are met.
In 2020 and previous years, the mine has actively engaged community members through meetings and forums, liaisons with community officers, media (print and radio), and CSI initiatives.
Through these, key community concerns emerged:
- Job creation
- Environmental conservation/protection
- Local procurement opportunities
- Local supplier development
Mining Sustainability as an Odyssey Not a Destination
Truly transformative gold mining requires understanding that profitable mining and environmentally conscious processing are not mutually exclusive. The PAR Biological Oxidation (BIOX®) plant at Barberton Mines is an efficient gold-extraction process which is aimed at environmental sustainability.
A mine’s lifecycle is relatively long at 10 to 30 years, with some mines projected at longer than 30 years. However, considered with the lifecycle of a community and its people or the natural environment in which the mine operates, one could consider this a negligible amount.
Sustainable mining not only aims to keep the mine profitable over a longer span of its projected lifecycle, but to do so with stakeholders and the environment in mind.
This requires constant research and analysis (R&A), targeted at the understanding the comprehensive implications of gold mining in the years to come. Political, socio-cultural, and economic volatility may play a role in defining operating criteria, but a grounded approach is key.
The scope of sustainable mining requires this R&A in such a manner that the mine itself is left intact throughout instabilities, while maintaining the core proficiencies of its purpose. What this means is that any good gold mine should produce gold first and foremost, built within an infrastructure of ethical and capable governance.
Hence, the sustainability journey of a gold mine is an odyssey of iterative approaches over an extended lifecycle aimed not at a destination but the experiences throughout.
Keeping Finances Secure For All Stakeholders
An unprofitable gold mine is not a good mine. An unprofitable gold mine cannot grow or scale its operations to meet the needs of its stakeholders in terms of fair remuneration and rewards, adequate job creation, dividends, or continually maintained and high-calibre operations.
With a market capitalisation of $477.1 million as of 2020, PAR has implemented a number of projects to strengthen the financial stability of the company. These include:
- Commencement of production at Evander Mines’ 8 Shaft Pillar project.
- Completing the mining feasibility study on Evander Mines’ Egoli project.
- Completing a bankable feasibility study on a 10MW solar photovoltaic plant at Evander Mines and approval of the project for construction.
- Approval funding for the first phase of the 45ha blueberries project at Barberton Mines.
- Establishment of an American Depository Receipt (ADR) programme through the Bank of New York Mellon to access the United States.
Ultimately, the combined ESG factors of any gold mine means that it has to operate in a manner conducive to healthy growth. In order to comprehend the scope of its influence, a successful gold mine has to invest time and resources into aligning these factors into an economically practical infrastructure.
The continual focus on environmental, sustainability, and finance goals allows for better critical engagement with operational constraints and liberties.