JP Casey (JPC): What risks do mining companies face in exploring for new mineral deposits?
Charles Dumbrille (CD): Current threats in this dynamic world of instant communication [include] country risk, jurisdictional risk, travel management, resource nationalism, corruption, extortion, insider threat, organised crime, illegal mining [and] state-sponsored cyberattacks, all while needing the essential social licence to operate. How to answer these challenges is a big question.
Generally speaking, your first step is to identify the risks and to stop ignoring them. When an incident such as what we have seen this year in Burkina Faso occurs, the industry says the risks have increased. The risks have not increased; they’ve just been ignored. For many years, reliable analysis on Burkina Faso has been providing assessments and security recommendations that have been ignored. To date, there were about 460 attacks that are suspected to have been perpetrated by militants in Burkina Faso in 2019. Out of these, ten attacks targeted established and artisanal mining sites. Additionally, three attacks targeted mining convoys over the course of the year.
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By GlobalDataThe Semafo attack further highlights the important volatility witnessed in Burkina Faso’s Est Region over the past months, where armed bandits and militants operate relatively unhindered due to the shortcomings of the local security apparatus. While a peak in attacks was witnessed in March and April, the situation remains unstable. Despite a curfew in place by the Est Region governor until January 2020, the attack reflects the inefficiency of the measures taken by the authorities.
Martin Taylor (MT): The risks vary, depending what they’re doing and what stage it is they’re doing it at. So from experience, if a company is looking at a new block somewhere for exploration, it’s normally in a less developed country, a country with no infrastructure or the infrastructure is such that they’re just coming out of a time of conflict, and obviously we have ex-militants on the ground and impoverished people.
You’re talking [about] the old-fashioned security around access control: the safety of the staff and the safety of the products, all those things that need to be built in. But then you have the additional security issues which need to be overcome regarding getting your work force in and out of that facility, and that workforce comes in two levels: you have your local workforce who will come in to work on the site, and then you have your expat workforce who are going to come into that facility to manage the processes, and bring the specialist skills in.
You find the local workforce will be bussed in, or moved in from the local village, and the expats have to be moved in by road via the nearest airport and the nearest airport may be three, four, five hours’ drive across a country which may have an armed terrorist, extremist or militia-type risk which needs to be overcome.
People aren’t stupid. They know for a fact that for you to get to that facility, the only way you’re going to do it is either fly everybody in by helicopter, which is very expensive, or they’ll land at this airport, they will drive from point A to point B, and they always swap around their staff. They know that certain times they’re going to move from point A to point B along that road, between these times; that makes them vulnerable, because if you’re predictable in what you’re doing, predictability makes you vulnerable.
JPC: How can miners help minimise and manage these risks?
MT: You have to start thinking about how you manage that risk of that predictability.
There’s always going to be a rub. There’s always going to be a risk, you can never eliminate the risk. What you’re trying to do is bring it down to an acceptable level and manage it. Sometimes you own the risk, and sometimes you can eliminate it, but there’s always going to be a risk; it’s a rub, you have to get people in and out from a facility, or go to explore or build that facility.
People know where you’re coming from and if there are criminal elements who want to do whatever they want to do for their own means, whether that’s financial, political, ideological exposure, they’re going to do it. And that’s where certain activities can become high-risk. And movements are always more risky, which is why you don’t try to move at night and things like that.
One thing I would always encourage if you have one of my security managers at the facility: that the people doing the gates, people doing the perimeter, the people doing the searching – the actual hands-on stuff – is [from] a local provider. So that it’s as much local as possible and all you’re doing is providing the expertise [and] knowledge to manage the facility and manage the process for them.
Start trying to work with people from day one. Start that discussion, start that negotiation, start that engagement, start that working relationship with the local authorities and key individuals. My security managers, when they go into a facility and they operate the facility, on the ground from day one, that’s what they do, and it’s always a good thing to do. It’s hearts and minds, start winning the hearts and minds and start negotiations and start building those working relationships from day one because it makes life easy.
JPC: How do companies interact with these local people and governments, considering many mining majors are based in foreign countries?
CD: You need to identify all the stakeholders involved and learn how they view the project. Local governments are expected to change their role and provide more significant resources to assist in the challenges created by rapid expansion. Companies need to learn about pressing issues or grievances in the community, as they can erupt with community concerns about the mine.
Another example is that companies need to identify the local cartel. You may be just at the start of your project, with little interest in what you are hoping to develop. But, as more equipment, trucks and people arrive, the cartels will be interested in the project and will be seeking a piece of the pie. As you hire locally engaged employees, the cartels may want to have one of their members hired by the mine to keep a close eye on your operations.
A cartel connected employee can quickly start taking profits, whether it’s the refueling truck going around your site to refill vehicles and equipment, but also making stops at their friends and family. Or stealing tons of concentrate after operations managers begin noticing discrepancies in the concentrate levels of samples taken from trucks before they left the mine and the grades they received from their buyer in the port. Companies need to manage complex and sophisticated issues such as this, and monitor them throughout the lifetime of the mine, not just the beginning.
MT: Where that collaborative approach happens is obviously to get the licenses to mine, and once the facilities have been built, there is a massive impact on the local infrastructure. Mining facilities create a lot of by-products, a lot of waste, a lot of stuff that gets moved out, [and] you have locals who go through it and want to find the remains of whatever the original product is there that they can recover.
Locals may not be too pleased that a mining company is there; locals see them as an opportunity for criminal activity, from straightforward robbery to kidnapping, through to local officials, who see them as an opportunity to make money out of them whilst they’re there, with rogue cheques and expecting to be bribed. From the first point of hitting the ground, they have security issues to manage, and those then escalate anywhere.
That works well, sometimes it may not work as well as it should do because of where it is in the world.
