Taking a holistic view in mining reviews and audits

During 2009, SRK took on several compliance audits for project funders. Through this work, SRK witnessed mines move from merely aiming for compliance with in-country environmental legislation to adopting good practice as outlined in the Equator Principles and other guidelines. Mining companies and financial organisations are working to achieve international best practices. Several projects have focussed on refurbishing mining and processing activities in Zambia and the DRC, where new players address complex environmental and social legacy issues.

Financial and legislative drivers are advocating environmental and social management over the life of an operation. However, while many mines are simultaneously in the development, operations and closure stages, attention is largely focussed on new development projects. Attention to legislative compliance is imperative, but the development stage cannot be considered in isolation from other stages. The ramifications of this neglect include:

• Limited attention to existing liabilities. By focussing resources only on new developments, existing liabilities often increase and opportunities for progressive rehabilitation and clean up are missed, even though they would reduce the final costs at closure. Particularly for refurbishment projects, neglect or poor practice can significantly degrade the environment
• Management systems focus on new developments. When existing operations at a site are not included, serious pollution incidents can result in significant non-compliance, jeopardising project funding and licence to operate
• Social uncertainties around possible closure. In one case several operations were geographically dispersed and at different stages in the life of mine. With the focus on new development, limited closure planning was evident at the site of the possible closure resulting in socio-economic uncertainty which manifested in community threats, action, and dissatisfaction. Lack of attention to these issues can damage reputations and perpetuate poor community relations and difficulty in obtaining funding
• Turnover of difficult assets. As assets become less financially viable to one company, others may see an opportunity to invest. Affected communities can be exposed to several mining companies over a few years that should manage the assets, but the turnover often results in delayed or incomplete implementation of commitments. Unrealistic commitments made in the past can result in strained community relationships and a difficult operational environment

In many of these reviews, SRK has the opportunity to consider the operations in their entirety. SRK concludes that operations simultaneously meet legislative requirements in some areas of the operations yet are non-compliant in other areas. The former areas of compliance tend to correspond with new developments.

The holistic review allows SRK to assist clients in identifying areas that need attention, to bring the full spectrum of the operations to compliance level, minimising or avoiding risks.

Briony Liber: bliber@srk.co.za
Dr Henrietta Salter: hsalter@srk.co.za
James Lake: jlake@srk.co.za

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