Responsible Mining Investment in Africa
Allison Forrest, Responsible Investment Officer

Mining project development across the continent of Africa continues to increase as explorers from around the world compete to discover undeveloped mineral deposits. With this rapid growth comes complex environmental, social and governance (ESG) risks and opportunities that project developers and supporters must identify and manage.

Many mining projects in Africa have positively contributed to local economic growth and sustainable development. However, ESG matters that are not actively managed throughout the life of the project, can affect the success of other critical development activities, especially if governments are ill equipped to properly manage income generated from mineral projects. Other matters such as community health, safety and sustainability, labor, permitting, resource nationalism, corruption, lack of infrastructure, local procurement and impacts on local environments, coupled with scarce natural resources are all major areas of concern for mineral and industrial development in Africa.

RCF is aware of the risks and opportunities associated with mining investment in Africa and applies a specialized approach to understanding the specific ESG matters affecting its investments. RCF’s due diligence process typically includes meeting with community members, government representatives and non-government organizations to get a better understanding of the local ESG concerns that could affect the success of a mining project.

RCF frequently works with experts that possess a deep-understanding of the local dynamics and also references guidance from sources such as the International Finance Corporation, Equator Principles and Australia-Africa Mining Industry Group. Another key component of the due diligence process includes understanding the project team’s capacity for managing on-the-ground ESG matters through examples of proactive stakeholder engagement including programs developed in collaboration with communities and governments to address long-term sustainable development.

RCF believes that failing to consider and actively manage ESG matters can have monumental impacts on a business’ ability to earn and maintain its social license to operate in Africa and all around the world. To help demonstrate transparency regarding its ESG activities, RCF became a signatory to the United Nations-supported Principles for Responsible Investment in 2013.