Journal of African Business Issue 5
Welcome to The Journal of African Business - a unique guide to business and investment in Africa. Every edition carries editorial copy covering the following general topics, with a wide range of subjects within each broader economic sector: energy; mining and exploration; trade; finance; technology and tourism. In addition to this, special features on topical matters will be published periodically, along with country profiles. In this edition, the in-depth interview with Aggreko Head of Sales, Southern East Africa, Max Schiff, makes clear how important captive power is for the future viability of a wide variety of projects in Africa. As Schiff points out, the extractives industry has long been a leader in the application of captive power, given the remote location of many mining operations, but the flexibility and ESG advantages that captive power using renewables offers is making it an ever-more attractive option for many different sectors.
Welcome to The Journal of African Business - a unique guide to business and investment in Africa.
Every edition carries editorial copy covering the following general topics, with a wide range of subjects within each broader economic sector: energy; mining and exploration; trade; finance; technology and tourism.
In addition to this, special features on topical matters will be published periodically, along with country profiles.
In this edition, the in-depth interview with Aggreko Head of Sales, Southern East Africa, Max Schiff, makes clear how important captive power is for the future viability of a wide variety of projects in Africa. As Schiff points out, the extractives industry has long been a leader in the application of captive power, given the remote location of many mining operations, but the flexibility and ESG advantages that captive power using renewables offers is making it an ever-more attractive option for many different sectors.
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AFRICAN MINING IN THE ESG ERA<br />
FTI Consulting has done a deep-dive into the challenges facing the <strong>African</strong> mining sector in the era <strong>of</strong> enhanced<br />
environmental, social and governance reporting (ESG). What follows is a summary <strong>of</strong> the main points <strong>of</strong> the<br />
14-page study, “Evolution in <strong>African</strong> Mining. Investing in the Energy transition, ESG, and the Economies”.<br />
Credit: Pixabay<br />
Sara Powell, Managing Director,<br />
Sustainability and ESG at FTI<br />
Consulting United Kingdom<br />
TThe demand side <strong>of</strong> global energy places immense pressure on<br />
the mining sector, which is perceived to make a significant<br />
contribution to CO2 emissions. Now, mining companies with<br />
extensive social and environmental footprints are coming under<br />
greater scrutiny by investors, civil society and governments. In<br />
Africa, the ESG challenge is the legacy <strong>of</strong> environmental damage<br />
and irresponsible mining practices, therefore there is a need to<br />
create guidelines for the continent.<br />
In “Evolution in <strong>African</strong> Mining: Investing in the Energy<br />
Transition, ESG and the Economies”, FTI Consulting addresses<br />
the questions and possible responses on growth, costs, risks,<br />
capabilities and licences to operate that confront the mining sector<br />
in Africa and globally today.<br />
Based on research gathered through the FTI Consulting<br />
Resilience Barometer 2022, the mining sector seems to be under<br />
the most pressure from the current focus on ESG concerns. In fact,<br />
nearly half <strong>of</strong> the companies polled reported that they are under<br />
increased pressure, and one-third said that they are falling short<br />
on ESG reporting. As a result, while recognising international<br />
decarbonisation goals, mining and metals companies understand<br />
that their own ESG goals are now under ever-closer scrutiny.<br />
“The ESG shift does not mean discarding possible down-side<br />
risks. Instead, it is seen as having a business strategy that seeks new<br />
opportunities from the transition to sustainability that is underway,<br />
understanding that there will be disruptions and unknown risks to<br />
manage within this,” says Petrus Marais, Head <strong>of</strong> FTI Consulting<br />
South Africa practice.<br />
These factors will impact the sector across four major areas<br />
<strong>of</strong> concern.<br />
STAKEHOLDER ENGAGEMENT<br />
While one in five companies in the extractives sector stated<br />
they were under pressure to strengthen external stakeholder<br />
relationships, one in two chief risk <strong>of</strong>ficers felt “extreme<br />
pressure” to improve external stakeholder relationships. Greater<br />
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