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Mining companies and local communities: the balance of give and take

09 november 2020

Most mining companies often clash with the local communities whenever they intend to establish a new mine that leads to their relocation.

Some fights are due to potential environmental challenges such as the contamination of rivers or the suffering of humans and livestock due to the effects of mercury and cyanide.

Some communities are also complaining of air and noise pollution due to mining operations in their areas.

In the United States, Nevada Gold Mines, which operates Long Canyon, clashed with the native people last April who claimed that the company's plans to pump billions of gallons of underground water would disrupt natural flows to Johnson Springs Wetlands Complex, a network of 88 springs, and potentially harm species like the Relict Dace fish.

The natives also said that the mine operator's plan to replenish groundwater by leaching it back from surface ponds is inadequate because the returned water will not be as pure as water that flows naturally from the deep, carbonate aquifer.

"That is the deepest water, way down there," RGJ quoted Rupert Steele, chairman of the Confederate Tribes of the Goshute Reservation as saying.

"That is why it is [really] pure when it comes out from under the mountains, that is where we get our ceremonial water."

It's not the tribe's first clash with the mining company as they opposed the development of Long Canyon's first phase, which opened in 2016.

They said the mining company and Bureau of Land Management had downplayed their concerns in a rush to develop the project.

The tribe said the construction of the mine in the heart of the aboriginal territory destroyed or displaced countless artefacts and ruined a landscape that was important for historical and spiritual reasons.

Last month, four gunmen shot and killed anti-mining activist Fikile Ntshangase in her home in South Africa's KwaZulu-Natal province.

Roving Reporters reported that the murder points to escalating pressure on communities across South Africa to accept environmentally damaging mining operations on their land.

Ntshangase led the Mfolozi Community Environmental Justice Organisation (MCEJO), which is taking legal action to prevent the expansion of an open-cast coal mine at Somkhele, on the southeastern border of the Hluhluwe-iMfolozi game park.

The organization also alleged that the mine's existing operations should be stopped as they are not compliant with environmental and other laws.

However, the mine owners, Tendele Coal Mine, argued that they were operating lawfully, and expansion is necessary to keep the mine viable and protect 1,600 direct jobs and hundreds of indirect jobs in this impoverished part of the country.

A study focused on South Africa, which was launched during the Mining Indaba in Cape Town last February showed that 79% of respondents said they had not benefited from their local mine at all.

In Zimbabwe, thousands of villagers around Marange diamond fields protested the alleged looting of diamond revenue in April 2018.

Human Rights Watch reported that following years of alleged diamond revenue looting by state-owned companies, with no benefits to the local communities, the villagers' patience was wearing thin.

Centre for Natural Resource Governance petitioned the Parliament of Zimbabwe in March 2018 to "ensure diamond mining contributes to the development of the health, educational and road infrastructure of the Marange community, especially areas affected by diamond mining."

Not all gloom and doom

Some companies are operating in perfect harmony with the local communities and this was evident earlier this year as they stepped up to alleviate the challenges brought about by the COVID-19 pandemic in southern Africa.

Diamond giant, De Beers donated $2,5 million to Botswana and Namibia last April to support community leaders, healthcare professionals, and the host governments.

Anglo American and its subsidiary, De Beers also donated $2 million last April to South Africa's Solidarity Fund that exists specifically to help address the impacts of COVID-19. 

"We are continuing to identify additional areas for monetary and in-kind support that we can provide as conditions evolve – building on the $25 million value of our additional COVID-19 global relief donations and in-kind contributions to date across our host jurisdictions in southern Africa, the Americas, Australia, and the UK," said Anglo American chief executive Mark Cutifani at the time.

Namdeb, a joint venture between the Namibian government and De Beers, also unveiled a new testing facility for COVID-19 around its operations in Oranjemund last July.

"Whilst this facility is very important to ensure we manage the COVID-19 risk in our business, we are also honoured to be able to assist our community and the country at large in alleviating some of the pressure to conduct testing," said Namdeb chief executive Riaan Burger at the time.

"We all applaud the heroic and selfless efforts of so many people – within our company and far beyond – to help others in times of [humanitarian] crisis."

Namibia's state-owned diamond trading, Namibia Desert Diamonds (Namdia) allocated N$2 million ($109 000) to support the country's fight against the Covid-19 pandemic last April. 

Namdia chief executive Kennedy Hamutenya said in a statement at the time that N$1 million of the donated funds will go to the government's National Disaster Fund. 

The balance was distributed to the Public Enterprises CEO's Forum, City of Windhoek, fuel supply for ambulance services; water provision to the vulnerable communities, sanitiser bottles to a Windhoek clinic and food parcels to vulnerable communities.

In 2018, De Beers Canada provided more than $37,000 toward Christmas community events, hampers for families in need and other holiday programmes in the First Nations partner communities in the NWT. 

The company workers collected cases of water for homeless people.

Russia's Norilsk Nickel (Nornickel), the world's largest producer of palladium and high-grade nickel and a major producer of platinum and copper, recently signed cooperation agreements with three organisations representing the indigenous peoples of the Taimyr Peninsula.

The three organisations represent more than 90% of the indigenous population living in the north of Russia.

The parties developed a comprehensive five-year support programme totalling 2 billion roubles.

The initiatives already included into the roadmap include the construction of workshops for reindeer and fish processing, purchase of refrigeration units, construction of an ethnical complex with workshops for fur processing, subsidies of helicopter transportation, targeted training for professions in demand at Nornickel, and publishing of textbooks in indigenous languages and many other ad hoc and complex initiatives. The presentation with more details is available here.

"We have jointly defined new systemic initiatives aiming at the support of indigenous peoples living in the Taimyr Penimsula, which have now been consolidated in an agreement," said Andrey Grachev, Vice President, Federal and Regional Programmes, of Nornickel.

"This is a 2 billion roubles programme comprising over 40 initiatives in the next five years. Firstly, it is aimed at stimulating the economic activity of the indigenous peoples and facilitating the use of renewable resources – the basis of their traditional lifestyle."

He said Nornickel had a long history of close cooperation with organisations representing the interests of indigenous communities in the regions where it has operations, ensuring transparency in decision-making.

First Quantum Minerals (FQM) said last June that it supports a call from civil society for local communities in mining areas to benefit more directly from the tax revenue paid by the industry.

The company said it paid more than $533-million in taxes to the Zambian government in 2018, with an additional $10-million spent on community and infrastructure projects.

Last July, Baffinland Iron Mines Corporation reported that it had signed a new agreement with the Qikiqtani Inuit Association for Inuit oversight of the Mary River Mine.

The agreement is focused on environmental protection and lays out mechanisms for making sure Inuit have a say in environmental monitoring.

"(The agreement) provides us with a roadmap to resolve a lot of our outstanding issues. The concerns that we've heard in terms of the communities saying that their voices need to have weight, need to be able to influence what they are experiencing," said Qikiqtani Inuit Association president PJ Akeeagok.

An Inuit stewardship programme will expand to other communities impacted by the mine.

"These are unprecedented advancements for any Indigenous organisation to obtain in terms of oversight and the level of engagement. It puts Inuit in the forefront in terms of Inuit-led independent monitoring," said Akeeagok.

The Nauttiqsuqtiit Inuit Stewards will monitor the land and water and report when something goes wrong.

Rio Tinto, which has 60 projects and operations in 36 countries across the globe, has communities and social performance (CSP) standard that defines the way the company engages communities.

The CSP also outlines the steps Rio Tinto takes to identify and manage social, economic, environmental, cultural and human rights impacts throughout the life cycle of its projects, from exploration, to project development, to operation and closure.

Apart from the taxes and royalties the company pays, it contributed to communities last year in a variety of ways:

  • $147 million in payments to landowners, which are non-discretionary compensation payments made by the company under land access, mine development, native title, impact benefit and other legally binding compensation agreements.

  • $36 million in community investments, which comprise voluntary financial commitments, including in-kind donations of assets and employee time to address identified community needs or social risks.

  • $13 million in development contributions, defined as non-discretionary financial commitments, including in-kind donations of assets and employee time that aim to deliver social, economic and/or environmental benefits and which we are mandated to make by law (including under a legally-binding agreement) or regulation.

The year of 2020 is turning into a serious test for the relationship between mining companies and indigenous peoples. Both miners and locals have been put under the pressure of the COVID-19 pandemic. But some companies, due to their commercialism and short-sightedness, may start “writing off” losses at the expense of local residents, whereas other companies, on the contrary, having given support to local communities in difficult times, will be able to develop long-lasting cooperation with them being conscious of the long-term prospects of their business.

Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished