Without mining, the shift to a green economy won’t be possible. Critical minerals are necessary components for electric vehicle batteries, solar panels, and more. Mining is here to stay and the need to operate more sustainably is more crucial than ever.

Mining companies are shifting away from merely mitigating negative impacts and instead are looking at ways to positively impact the communities in which they work. This is true during operations and as they prepare for closure. 

Mine closure without proper planning and well-thought out social investment can devastate communities and the local economy. This is especially true when a mine that’s been in operation for generations shuts down without building alternative livelihoods for the communities that had both supported and relied on the mine.

But it doesn’t have to be this way.

From our work with mining companies over the past few years, we’ve seen that these scenarios are thankfully becoming less common as mining companies increasingly ramp up investment in their host communities while they’re there. For instance, some mining companies have been the first (and even only) responders when remote and rural communities run into crisis, quickly mobilising funds to purchase personal protection equipment or set up vaccine clinics in hard-to-reach places.

While we saw countless examples of mining companies supporting host communities during the height of the COVID-19 pandemic, these contributions were actually on the smaller side, when compared to the investments such companies normally make in their operating geographies.

Other common examples include allocating money to spend on local procurements that support local business, building infrastructure that serves both the mine and residents, providing scholarships to students in host communities, and co-investing in small business growth to boost job creation outside of the mining value chain. Mining companies have clearly demonstrated their willingness to move beyond compliance and invest in community livelihoods. Now, we’re working with mining companies to move yet one step further, by helping them invest in programs designed to transform communities, even beyond a mine’s operation.

We call this legacy investing.

Working with Gold Fields, a multinational gold producer with eight operating mines in Australia, Peru, South Africa and West Africa and one project in Chile, Palladium developed a pipeline of sustainable development programs designed to leverage capital from partners to address community-identified issues around water, energy, poverty, education, jobs and cultural heritage.

The programs proactively address development problems in the regions in which Gold Fields operates and work at a systems level to create transformative and lasting change. “The communities that host our operations are among Gold Fields most important stakeholder groups – their support underpins our social licence to operate, which in turn impacts our ability to create enduring value,” explains Allison Burger, Gold Fields VP of Community Relations.

For example, in Peru, the programs we designed with the Gold Fields team focus on supporting non-mining livelihoods, improving access to skills and technical training and preserving environmental resources in culturally relevant ways. We worked with Gold Fields to identify community needs and existing investments, and then devise ways to integrate and scale efforts for impact.

While Gold Fields has made significant investments to enhance community access to water and improve dairy production among its host communities, dairy farmers still struggle to produce cheese that meets the quality and hygiene standards necessary to sell in urban supermarkets. “We recognise that dairy farming is our communities past, present, and future livelihood while our mine, which brings job and business benefits to the community, will ultimately close,” adds Burger. “Over the years, we have supported communities’ dairy farming projects, but not to the extent where cheese production can be expanded and sold beyond the local markets. We felt we should support dairy producers to increase their production and sell higher-priced products.”

Together, the Gold Fields and Palladium teams analysed the challenges of the current dairy program and designed ways to connect farmers to expert, technical support as well as regional dairy buyers who can help the farmers improve their production and position their cheeses in higher value markets.

With a strong dairy product and strategic connections to buyers, the program is poised to attract private investment and leverage capital from public programs that invest in agricultural value chain strengthening. In this case, the Gold Fields investment is only the start of a sustainable and productive dairy activity that can help the community support itself during, and more importantly, beyond the mine’s operation.

“Gold Fields, as part of its ESG 2030 commitment to create enduring value for stakeholders, aspires to catalyse investments that positively impact our host communities and environmental resilience beyond the life of our mines,” Burger explains. “The dairy value chain investment is one such program, designed to improve the livelihoods of 800 dairy farming families in the communities around the Peruvian mine.”

Rather than investing in short term programs that only generate impact during the life of the mine, Gold Fields is leading the way, and adjusting its view to think about ways their investments can catalyse positive, knock-on effects for years to come.

As the mining industry is poised to ramp up operations to support the green energy transition, it is of paramount importance that we continue partnering with mining companies to reframe the way they approach their host community investment to transform their contributions from point solutions to catalysts for long term, transformative change.

For more information, contact info@thepalladiumgroup.com.