The documentary Gold: A Journey with Idris Elba, tells the fascinating story of how this precious metal enables economies to grow and empowers socio-economic development. Throughout Africa, gold has changed the lives of many. It is for these reasons that TERRY HEYMANN, CFO of the World Gold Council (WGC) believes that gold is a critical metal. GERARD PETER reports.
At this year’s Mining Indaba, there was much talk about critical metals. For the most part, this centered on battery metals required to advance a green economy. However, according to Heymann, the definition of a critical metal varies.
“Right now, critical metals are being framed as those that support the energy transition. This is not an area where gold plays a hugely important role.
“However, the definition is in the eye of the beholder. If you consider ‘critical’ in terms of supporting development in the communities and countries where it is mined, financial inclusion and long-term financial security then gold ticks the box,” Heymann explains.
To illustrate his point, Heymann refers to Barrick’s Kibali gold mine in the Democratic Republic of Congo (DRC). “Before Kibali was established, the community did not have electricity or schools and there was a lack of infrastructure such as roads. Now, the community has been uplifted because of the mine.”
Heymann explains that because many gold mines operate in remote places, it is often the mining companies that build the infrastructure, and their operations bring socio-economic benefit to communities. “These mines provide electricity and water for communities as well as build schools and clinics. All of this results in healthy communities that have access to basic amenities and education.”
Like any other mining activity, gold mining is an extractive business that impacts the environment. Heymann does not dispute this, however, he puts forward the argument: Does the end justify the means? “Firstly, we are getting the metal which is important for several purposes throughout the world. More importantly, it enables economic and social development.
“Mining not only provides jobs at the mine site but also indirect jobs by creating a supply chain. Even though there are payments made to the government through royalties and taxes, reports by the WGC show that the biggest contribution from gold miners is payment to local suppliers. This, in turn, creates an economic flywheel that provides jobs beyond the mine site.
This leads to the generation of a bigger economy and more importantly, creates an economic environment that can outlive the life of a mine.”
Beyond mining
Heymann points out that it should not be forgotten that gold mining is a business and that needs to deliver returns to shareholders. Furthermore, he says that governments should put in place financial incentives to attract investment in gold mining. That said, most WGC members have economic development plans in place and ideas about what infrastructure they can provide and how it can support communities. Heyman adds, “Our members are also looking at long-term planning including postclosure activities such as reclamation.
“Also, it’s important for the administration – including mining ministries – to have proper processes and protocols in place about how post-closure is managed and to hold companies to account on their promises.”
Heymann emphasises that partnerships between all stakeholders are crucial to ensuring that gold mining takes place responsibly and benefits communities. However, he states that this is not always the case in South Africa. “In South Africa, there is less of a partnership-type approach to managing mine sites for the long term and that doesn’t serve anybody well. It is for this reason that there is often tension between mining companies and communities and this does not benefit any party or the environment.”
He adds that while mining companies should be involved in mine rehabilitation and post-closure plans, it cannot be the sole responsibility of such companies to do so. “The way forward is to set up cooperatives and work with environmental protection groups to create a legacy that lasts long after a mine has been closed. For this to happen, it needs a concerted effort from a broader group.”
A partnership approach also creates less reliance on gold miners to provide for community needs. A case in point: the failure of many South African local municipalities to deliver essential services means communities rely heavily on gold miners to provide water, electricity, roads and education in many parts of the country. In this regard, the WGC is working towards achieving the United Nations Sustainable Development Goal 17 which focuses on building effective partnerships.
“Such partnerships should be formed in the early stages when a company identifies a resource and begins feasibility studies. Mining companies must work with the community. This will ensure a return on investment for the company and benefit the community. We have found that gold miners who form partnerships with all stakeholders in the early stages are those that succeed in the long run,” Heymann states.
Such partnerships have proven successful in other parts of the world. “For example, land that is reclaimed has been done in a way that is suitable for agricultural purposes. One such case is Golden Star Resources’ oil palm plantation initiative in Ghana,” Heymann adds.
Gold: Innovation encourages optimisation and sustainability
A key topic at this year’s Mining Indaba was innovation and the adoption of technology to ensure ESG best practices. In this regard, Heymann says, there have been great strides in the gold mining sector. For example, there are mine sites in Africa that are trialling new technology that significantly reduces the amount of cyanide used in gold processing.
In addition, many mines now use renewable energy. One such example is Gold Fields’ solar plant at its South Deep mine in South Africa. Not only has it decreased the company’s reliance on the national grid but it has also reduced carbon emissions at the mine. “Also, gold mining often takes place in remote regions that are not connected to the national power grid. Again, Kibali is a good example where the mine uses hydropower and this also provides electricity for the local community,” Heymann explains.
Technology also helps to create a safer working environment. For example, in an underground operation employees can control vehicles remotely from a control room and there has been an increase in companies using autonomous vehicles in their operations. Not only does this ensure that employees are no longer exposed to possible dangers underground, but it also increases productivity because these machines don’t need to stop for breaks and shift changes.
“We are seeing an increase in the adoption of technology in gold mining. Is there more to come? I’m sure there is, and it is exciting to see where that goes,” Heymann concludes.