The Prospectors and Developers Association of Canada (PDAC) will from 5 to 8 March host its annual mining convention in Toronto, Canada. This comes hot on the heels of the Investing in African Mining Indaba 2023 (more commonly known as “Mining Indaba”). Control Risks was at Mining Indaba and has identified five key trends for those at PDAC to keep an eye out for:
Geopolitics and critical minerals
The conflict in Ukraine hit global commodity markets just as the 2021 boom started to show signs of subsiding. The impact of these events on the mining community was at the forefront for all those gathered in Cape Town, South Africa from 6 to 9 February. Uncertainty is being driven by price fluctuations, supply chain disruptions, and reputational concerns over sourcing and distributing minerals. Crucially, this also includes efforts to secure vital mineral supplies, with the European Union (EU), particularly France and Germany, emphasising its relationship with Africa and seeking to secure future mineral supply lines.
Focus on critical minerals
Trends from previous conventions that saw a swelling of interest in “battery minerals” and “strategic minerals” have given way to a sharper focus on “critical minerals” as businesses and national leaders alike seek commodities required to sustain modern technologies and support the transition to a green economy. Where gold was very much the focus at the height, and in the immediate aftermath of, the global COVID-19 pandemic (given its historic importance as a safe investment) stakeholders at Mining Indaba in 2023 showed a far clearer interest in lithium, nickel, cobalt, copper, graphite, bauxite and manganese.
ESG is here to stay
There has been a tendency in recent years to express cynicism about the prevalence of Environment, Social and Governance issues (ESG), or even to dismiss these concerns as the latest investment fad. This is no longer the case. Participants at Mining Indaba, through both panel discussions and the less formal side-chats that define the gathering, displayed a keen interest in shaping a greener and more socially conscious image for the mining sector as a whole. Topics of the day include the importance of responsible mining, the adoption of greener technology, traceability as a cornerstone of the industry’s future and how best to formalise the artisanal mining sector that many host communities have grown to rely on for their livelihoods.
Frequent power cuts across the host city drew stark attention to the question of the mining community’s role in driving a global energy transition away from traditional fossil fuels and towards renewable generation sources. Host Mineral Resources and Energy Minister Gwede Mantashe was once again at the forefront of these conversations, insisting that Africa will pursue a so-called “just transition” defined by a slower uptake of renewable energy given the continent’s power needs and reliance on coal. Nonetheless, from its growing focus on critical minerals and environmental concerns, to the increasing development by mining companies of their own renewable power generation facilities, the industry appears to be forging ahead with this agenda to position itself as the solution for the emerging green economy.
Risk is growing…
…and so is the appetite to confront it. The commodities boom provided an opportunity for many in the mining community to bolster their financial positions and prepare for the choppier waters ahead. Under pressure from national governments to secure critical supplies and from global stakeholders increasingly concerned about the impact of extractive industries on the environment, mining companies are looking with greater intent at operating responsibly in complex markets. However, the impact of such intent will be subject to increased oversight and scrutiny by all stakeholders, including communities and civil society. As the global green economy develops, investors would be well-advised to pay attention to which players are delivering on their ESG promises and which are leaving themselves open to reputational, regulatory and other risks.