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18 May 2018 00:00
Shared value in the mining industry should result in the creation of a multilayered economy that supersedes the value of a mining operation. This economic vibrancy should not occur during the period of mine closure but rather should be a licensing requirement of a mining operation at its inception.
Mining companies by their very nature must have the underlying ability to attract investors and raise capital.
What if these capabilities are used to deliver economic opportunities that could include a range of profitable enterprises from multiple sources, that ultimately offset the risks innate in the mining investment itself?
This would require a transformation from companies securing a social licence to operate to a social investment to operate.
A social investment to operate is the mindset that expands the way investors envision the area where a mining resource exists. What if a potential mining operation developed an investment portfolio with multi horizon opportunities? Opportunities that include mitigating mining-related challenges across the areas of dependency, security, safety, unemployment, water and food security and energy and health?
Shared value requires the skill and willingness to navigate the perspectives of those who may wish to share in the outcomes of a future that is chartered together.
From my experience of working in the mining industry, this will require embracing new ways of understanding value. Value is often the construct for which resource allocation is prioritised. A social investment to operate may be possible if industry leadership creates an organisational environment that allows for the letting go of the positional power that comes with wealth.
How do companies create the environment that allows risk to be embraced as an opportunity for the creation of new enterprise? Enterprise that lifts communities in mining areas from development beneficiaries to those who participate in an economy that serves their current and future needs?
Generally, rural communities live in spaces where there is some water availability, although scant, and have some activities that provide an income, albeit subsistence. Mining companies that generally move into these spaces approach these communities as development opportunities, and uplift the quality of lives of communities through various initiatives.
Experience has shown that if there is a management change in the company, a change in the regulatory environment, or a drop in the commodity price, those development projects are impacted.
So, the variability of lifestyle changes in mining communities are generally out of the control of those communities.
A social investment to operate changes that reality. The hypothesis is that different investors in any new enterprise: agriculture, water, security, manufacturing, traditional medicine, bird watching, solar energy, ecotourism, writing expeditions, food processing — these investors change the ability of communities to navigate a shared development of their destiny.
The concept of shared value requires a sincere investment in exploring ways of embracing new forms of power. This means that people living in mining areas and regulators need to create an environment that is conducive for a vibrant and creative economic conversation. Companies also need to see potential beyond resource extraction and development to allow for the realisation of economic potential in other areas. For this to happen, companies must use their network to bring different investors and disruptors to the table. What if mining became an impact investment?
Prishani Satyapal is a chief inspiration officer in sustainability truthing and is a doctoral researcher
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