Indaba

Mining Indaba puts ESG in the spotlight

Indaba in Southern African terminology is used to describe a gathering or meeting, but the term comes from a Zulu language word meaning “business”.

That origin meaning is to the fore this week as 6,000 people, including senior executives from more than 350 mining companies, investors, advisors and government representatives from 94 countries gather in Cape Town, South Africa.

The 25th annual Investing in African Mining Indaba is, in its own words, “Where the world connects with African Mining”, and Hudson Sandler’s market-leading natural resources practice is, naturally, attending.

Hudson Sandler’s Charlie Jack and Katerina Parker will be regularly tweeting the stories, personalities and highlights from Mining Indaba.

But what to expect from this year’s gathering? Like all big industry events, there will be a flurry of news issued in the opening few days. The sector and the African continent have been firmly in the spotlight with Barrick’s land grab of Acacia and Endeavour’s failed tilt for Centamin. Could Cape Town be the setting for further consolidation?

It might be Mining Indaba’s silver anniversary, but it is likely to be gold that shines brightest at the meeting. Investors will be looking closely at a wider array of gold projects than ever before on the back of higher gold prices driven by geopolitical tensions and a nervous equity market. Likewise, in a world that is aggressively transitioning its energy resources, the EV battery market is proving a real boon for junior and established rare earth producers. We are sure both communities will be kept very busy during the conference.

One issue is not in doubt: ESG – where the metals and mining sector has long been on the naughty step. S&P’s 2019 global rating report for environmental and social risk gave it the joint highest score alongside the Oil and Gas sector (even ahead of the power generation sector).

Cynical mining executives will say that good ESG performance is simply a cost of doing business, and a means to continued access to affordable equity and debt capital. Take this view at your peril. A quick look at the conference themes will tell you why. With approximately 30% of the sessions scheduled having an ESG focus, it is clear the message is sinking in that ESG is for the mindset of every department within a mining company. Session titles include “The role of new regulations and standards on sustainability improvements”, “A zero harm approach”, “Sustainable Technology”, “Harmonising Extraction and Environment” and one that addresses arguably the most ESG savvy communities of all “How should mining companies position themselves to attract millennial investors”.

20 years ago if businesses were not digitally enabled, many perceived they had no future. This proved to be correct. If Indaba is the voice of the mining sector, it is saying the same about ESG.

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