Alfonso Caso
Founding Partner
Anaf Energy
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View from the Top

Building Long-Term Agreements, Avoiding Short-Term Solutions

Mon, 10/22/2018 - 17:10

Q: What role does AOS play in the Mexican mining industry?
A: Community relations must be seen as processes that last the entire lifespan of a mine, from exploration to closure. We strongly believe that an adequate approach to social aspects is a strategic key element for success in the mining industry. It is very important to take into account that, once first contact is made with a community a process is started that needs continuous follow up. Gaps in communication create misunderstandings and foster the possibilities of social conflicts. We developed platforms of social understanding covering each stage from exploration through to a closure plan. As mining companies are focused on production, the social aspects can be easily neglected. We help them with this issue by providing manuals and insight into what the community needs. We also provide support in the social management area through certain strategies of community communication.
Starting 2018, there will be a market for Clean Energy Certificates (CELs), providing companies with certain benefits for buying energy from renewable sources. The new Law of Energy Transition binds miners to consume at least 5 percent of their energy from clean sources. We believe that as this market matures, prices will become more competitive. Our role is to advise mining companies on how to purchase energy under better conditions. It is important to point out that Grupo Bal and Grupo México have created their own energy supply and will benefit from the new market rules.
Q: What key areas must miners consider when planning their CSR programs?
A: The industry is aware of the fragmentation issue: as one company explores, another builds the mine infrastructure and a third carries the operations. The first company will promise certain things to the local community to secure the exploration concession, which it will most likely not fulfill because it leaves after completing its part. As a result, when operations begin, the relationship with the community is already damaged. A social feasibility study, then, is just as important as the studies for ore composition and mineral vein reserves. The best reserves in a location with a social conflict is not a good business. It is worthwhile for companies to know what they are facing in a certain area to build a solution along with the local community from the outset.
In this regard, it is vital to clarify from the beginning the commitments of each party. The problem is that social commitments made by mining companies are rarely documented. When the community starts demanding what was promised to them, operators can argue that they did not make those commitments and are not bound to them.
Q: What aspect of CSR do you think the industry should most implement?
A: Companies often neglect their relationships with local communities. When evaluating whether to pursue a certain project, it is key to have adequate social characteristics. A company must evaluate the dynamics of the community, the local authorities and the experience of neighbors, among other factors. In that case, the social feasibility study becomes strategic. It is very important to define the relationship that the mining companies want to have with local communities, as often this scheme is flawed in that some want to buy short-term solutions instead of aiming to build local agreements. When a company buys its presence in the community it becomes counterproductive because they may be giving money to some but, overall, they lack a deeper agreement.
A company must also nurture social awareness among its personnel. For example, an operator can have the best relationship with the local community, but if one of its workers does not abide by this, local collaboration is jeopardized. Companies must educate their people on how to properly behave and interact with the local community. It is important for the company to really hear what the community wants and needs.