Mozambique Mining Sector’s path to sustainable growth requires bold steps to meet expectations on ESG aspects

The mining industry is a significant contributor to global economic growth and development. From the extraction of valuable minerals to the creation of jobs and investment opportunities, mining impacts a wide range of sectors and communities worldwide. However, mining also poses significant challenges to safety, human rights, and environmental sustainability that must be addressed to foster sustainable growth. As such, mining companies and stakeholders must collaborate to maximise the sector’s economic benefits while mitigating its negative impact.

With its abundant mineral resources, including coal, graphite, lithium, copper and iron, Mozambique enjoys an ever-increasing demand for these resources, therefore it is imperative that the mining sector prioritises compliance to quality control and the management of environmental, social and governance (ESG) risks and impacts that meet regulatory and international standard requirements. These measures, contribute to improve performances while mitigating some risks from short to long term. Those risks can affect the reputation, finances, social acceptability, costs, valuation, etc. of companies.

In the current paradigm shift to reconcile economic development with environmental and social balance, pressures are increasing for all industries to integrate sustainability into strategies and missions. Regulatory requirements are strengthening around ESG challenges, consumers are demanding more and more transparency throughout value chains and investors are directing more funds to support ESG best practices. Therefore, companies that have a holistic approach to ESG and demonstrate a Corporate Social Responsibility (CSR) embedded into their strategies are getting ahead.”

However, implementing a CSR strategy and a sound management of ESG issues can require extensive resources and skills that not necessarily companies have. This approach will for example require to perform environmental and social impact assessment prior projects or a materiality assessment, collaborate with different stakeholders, such as the employees, surrounding communities, regulatory bodies, shareholders, etc. to identify their interests and needs before defining the main ESG priorities and action plans. The operationalization of the strategy can require several departments or functions within the company to work together. Moreover, to improve ESG performances, companies will need to assess their progress through collection and analyses of data and more and more stakeholders are expecting companies to communicate in a transparent manner on those progress.

Mining industry companies can also play a key role in achieving carbon neutrality in the country they operate. Indeed, climate change is becoming a real threat for our global economy and also a risk for companies’ operations with the increase in temperatures and other climatic disturbances. Mozambique is signatory of the Paris Agreement and has a commitment to reduce emissions at the country level. An increasing number of companies in the mining sector understand the key role they have to play in the energy transition, the fight against climate change and they are looking to limit their greenhouse gas (GHG) emissions. However, measurement and management of Greenhouse Gas emissions will also require technical skills, knowledge and serious long-term effort to achieve net-zero. While there are many routes to reducing direct and indirect emissions from the mining industry, it is likely that companies will need a project-specific approach.

In conclusion, Mozambique’s mining sector has the potential to contribute significantly to its economic growth and development. However, to achieve sustainable growth, it is crucial that mining companies prioritize compliance with quality control and management of ESG risks and impacts. This will require collaboration with stakeholders and the implementation of a CSR strategy that is embedded in their operations. Mining companies can also play a key role in achieving carbon neutrality in the country. As the world shifts towards a more sustainable future, it is imperative for the mining industry to integrate sustainability into its strategies and missions, and companies that do so will be ahead of the curve. While achieving net-zero emissions may require extensive resources and skills, project-specific approaches can help reduce direct and indirect emissions from the mining industry. Overall, bold steps are needed to meet regulator and stakeholder expectations on ESG aspects, thus creating a brighter future for Mozambique’s mining sector.