The environmental impact of small cap mineral exploration companies : a review of African activities and legislation

Abstract

In recent decades, the extractive minerals industry’s impact on the environment has, for numerous reasons, been the object of intense scrutiny. Operating mines are under constant pressure to reduce the impact their operations have on the environment. Consequently, they are compelled to conduct their operations with environmentally and socio-economically sustainable approaches. Countries that have a history of mining are frequently faced with issues relating to environmental degradation. The level of degradation they face is difficult to mitigate and near impossible to restore to its former state. Current research, focussing on operating and closed, defunct or abandoned mines, attempts to address these issues. However, this research addresses the potential impact caused by neglectful exploration practices that are not covered by current environmental research and legislation. Moreover, research on the extractive minerals industry’s current practices, specifically regarding the impact on the environment, focusses very little on the initial stages of mineral exploration which may, or may not, lead to new mining operations. Anecdotal evidence from the industry and role players suggests that mineral exploration activities have a limited impact on the environment, both in terms of duration of exploration activities and of the severity that exploration activities have on the environment. The aim of this research was to investigate the impact of mineral exploration activities on the environment. By utilising literature reviews, questionnaires and site visits, this study reviewed these activities’ impact on the environment. The focus was on small capitalised (or junior) exploration companies that conduct exploration activities for solid minerals on the African continent. Due to the mineral potential of the African continent, this study reviewed the reason(s) why exploration companies conduct business on the continent, as well as some of the risks they face. In order to better understand these companies’ practices, the study also reviewed the impact that the global macro-economy has on the extractive minerals industry. This review was necessitated by the cyclical nature of the extractive minerals industry, which have various impacts on small cap exploration companies’ funding and staffing. This aforementioned impact on funding and staffing, ultimately affects how these companies approach decisions regarding environmental matters. Mineral and environmental legislation is an additional aspect that influences, or should influence, these companies’ approaches to environmental matters. Therefore, selected legislation was reviewed in terms of effectiveness regarding environmental concerns and, subsequently, selected companies’ compliance or non-compliance to the legislation was reviewed. The literature review showed that limited research has been conducted on the environmental impact of exploration activities. Furthermore, quantitative and qualitative data about the environmental impacts, if any, are unknown or limited. Certain responses from the questionnaires were in line with information obtained from the literature reviews. As was expected, however, other responses indicated areas of shortcomings that were not forthcoming from the literature. The observations made during the site visits indicated various exploration activities’ impacts on the environment, along with some varied responses and attempts made by selected companies to mitigate the impact on the environment. The study concludes with a summative overview of exploration companies’ impact on the environment and then proceeds to make recommendations regarding the impact of mineral exploration activities on the environment