The most interesting thing about the mining industry’s social investment in communities is not so much the money they spend, as the original and innovative ways in which they spend it.
Over some 15 years, and through the design and execution of thousands of different CSR projects, the mines have learned through experience which ones work best from a sustainability point of view.
By keeping an ear to the ground and consulting closely with communities, the mines learn which projects are needed most, and are likely to work best. The mines operate various networking structures and consultative forums, such as regular meetings, feedback sessions and even formal grievance procedures. It’s not unusual for a mine CSR head to spend the better part of a weekend attending traditional ceremonies, officiating at community events and lunching with chiefs. This close contact with the community helps in the design of targeted CSR projects, with an emphasis on sustainability and the long term.
“Ideally, our community initiatives should continue to have an impact long after the mine has ceased to exist,” says Harrington Kanema, Community Relations Superintendent at Barrick Lumwana, echoing a line of thinking which prevails in the CSR departments of all the mines.
Zambia’s mines spend considerably more than their global counterparts on social investment
According to the most recently published independent figures in the latest report from Zeiti (Zambia Extractive Industries Transparency Initiative), just six mines – Mopani, FQM, KCM, CNMC Luanshya, Chibuluma and Barrick Lumwana – invested a total of K248 million in Corporate Social Responsibility payments in 2014. That’s over K1 million every single working day of the year. This spend was realized in the middle of the global mining slowdown and the plummeting copper price. Zambia’s mines spend considerably more than their global counterparts on social investment – from 2% to as much as 16% of pre-tax profits – compared to a global norm of 1% of pre-tax profits.
Unsurprisingly, education is a big recipient of social spend at all the mines, because of its beneficial long-term impact. Barrick Lumwana spends more than $100 000 a year on some 400 tertiary and school scholarships, and has invested more than $1 million in various schools over the past five years – building classrooms, staff houses, libraries and science laboratories.
Since 2007, KCM in Chingola has awarded more than 400 scholarships, at school and university level, to deserving students both from within the company and without. Many are sent to top international universities in Australia, India, South Africa and Namibia.
Since 2005, FQM has invested more than $50 million in education and skills development. Initiatives include early-childhood programmes, scholarships and apprenticeships, teacher training, and the construction of schools and staff housing.
Healthcare is another huge target – in 2012 alone, $30 million was spent just on healthcare by the four main mining companies in Zambia. Initiatives include anti-malaria programmes; the building and funding of clinics and hospitals; the training of doctors and nursing staff to work in them; and the provision of services such as HIV-prevention, malaria-testing and eye-screening. Mopani recently installed high-tech eye-treatment equipment at its two ISO-certified hospitals, Malcolm Watson and Wusakile, at a cost of over $73 000. “The eye clinics at our two hospitals will now be one-stop shops for eye procedures,” says Dr Ronny Cheelo, Mopani’s medical manager. “We will even be doing surgery, which was not possible before.”
Infrastructure is the other big area. This ranges from roadside drainage, market stalls for traders and classrooms in government schools, to big-ticket items such as roads, airports and entire residential towns. The need is most chronic in North-Western province, where FQM and Barrick Lumwana operate, because the area is poor and underdeveloped relative to long-established Copperbelt towns such as Kitwe, Ndola and Chingola.
Depending on what needs to be built, the mines will fund it themselves, or in partnership with government and other private-sector actors. FQM’s Kansanshi and Barrick Lumwana have even set up trust funds to facilitate infrastructural investment in their respective regions. Kansanshi allocates a discretionary budget to its fund every year, while Barrick Lumwana uses its fund to contribute 75% of the cost of a project, with communities contributing the rest.
The price tag of some infrastructure projects runs into millions of dollars. Kansanshi spent $10 million upgrading Solwezi airport and doubling the length of the runway so that it can take big jets such as the Boeing 737. And in order to alleviate the critical shortage of accommodation in Solwezi, Kansanshi built an entire town (Kabitaka) from scratch, at a cost of $100 million.
However, it’s often the less high-profile initiatives which yield the most sustainable benefits, such as building a much-needed road which completely transforms the life of a far-flung village by making it more accessible; running cooking demonstrations in villages to teach young mothers how to make balanced meals so that their children are not malnourished; and teaching farmers how to grow crops more efficiently, allowing them to boost their income several times over.
Ultimately, by accident or design, the mines have ended up sharing the development burden of Zambia with the government. Every kwacha spent in corporate social investment on behalf of ordinary Zambians is a kwacha that the government doesn’t have to spend itself.