The Department for International Trade (DIT) has booked a prime spot as a “platinum sponsor” of the world’s biggest mining investment conference in South Africa this week — showcasing the UK government’s support for the extractive sector.
The sponsorship enables the DIT to host a UK pavilion at the Investing in African Mining Indaba annual conference in Cape Town, attended by thousands of delegates representing more than 220 mining companies and 350 investors, according to the organisers.
The DIT’s large-scale presence at the conference comes after Prime Minister Theresa May claimed the UK would be a global green leader as she announced the launch of the government’s 25 year environment plan.
While the Prime Minister is keen to bolster her party's green agenda at home, the DIT has encouraged UK companies to ramp up their operations in Africa’s mining sectors where environmental regulations are known to operate on lower standards than in the UK.
Speaking to DeSmog UK, Richard Solly, the co-ordinator of the London Mining Network, an alliance of NGOs working with communities affected by the activities of mining companies based in or funded from London, called the government’s promotion of “destructive British mining investment” at the conference in Africa “an outrage”.
Mining activities can have damaging impacts on the environment including the loss of biodiversity and deforestation, erosion and the contamination of surface water, groundwater and soil from leakage of chemicals.
Some of the mining activities discussed during the conference include the extraction of gold, copper, iron ore, cobalt, lithium, uranium, diamonds and coal — the dirtiest form of fossil fuel.
The mining industry has come under the spotlight for its social impacts and crackdowns on those opposing its activities. According to a recent report by human rights NGO Global Witness, mining (alongside agribusiness) was the deadliest industry for activists to oppose, with 36 deaths recorded across the world in 2017.
“For communities living on mineral-rich lands these deals often mean displacement, destruction and death” - Richard Solly, London Mining Network
Promoting the event on its website, the DIT pointed out that as the global demand for natural resources increases, “Africa is seeing greater interest from developers in a continent estimated to contain approximately 40 percent of the world’s natural resources”.
The DIT also encouraged UK-based mining companies to “take advantage of the opportunity” and promised senior mining executives access to the industry’s “key decision makers” through its pavilion.
Besides “huge potential” for UK mining and infrastructure supply chains, the DIT also promoted the event as providing “enormous potential” for investments in Africa’s extractive sector — upholding London’s role as a key player in financing the mining industry.
A Department for International Trade (DIT) spokesman said that as a result of the department’s support to the conference over the last two years, an additional £312 million worth of exports to the African mining sector have been secured.
UK Pavilion: A Lobbying Space
Check out the UK Pavilion at the @MiningIndaba @AfricaTradeUK #UKAfricaTrade #MiningIndaba18 pic.twitter.com/gla9K3oGb1— Ludene Brown (@LudeneBrown) February 5, 2018
The DIT said its team was available “to facilitate new opportunities”, “connect [executives] with potential business partners” and provide “personalised pre, onsite and post event support”.
This is not the first time the DIT has played a facilitating role between UK-based extractive companies operating abroad and foreign government officials in a bid to boost UK exports ahead of Brexit.
Another investigation in the DIT's activities in India showed that while the UK government pledged millions of pounds to the country’s clean energy mix, annual reports from the government’s export credit agency — which falls under the DIT’s remit — show the government underwrote loans of almost £194 million to help Reliance Industries, a key player in India’s oil and gas sector, buy goods and services from UK companies between April 2015 and April 2017.
AIM market: The “Wild West” for Junior Mining Companies
London is the leading financial capital for the global mining industry because of the strength of the London Stock Exchange’s main market and the concentration of financial services experts in the City. Some of the world’s biggest mining companies such as Rio Tinto, Anglo American and Vedanta Resources have set-up their headquarters there.
The city has been given top billing at the Cape Town-based conference. One of the events, for instance, discussed the “profile and prestige of a London [stock exchange] listing” for junior mining companies.
According to the conference’s agenda, the panel of speakers included Tom Attenborough, the London Stock Exchange’s head of international business development and primary markets, and Nick Davis, the CEO of Memery Crystal, a London-based firm specialised in natural resources law which boasts the slogan “when it comes to natural resources we drill deeper”.
Some of the questions intended to focus the panel discussion included how a London listing helped to generate cash by “tapping into [London’s] diverse global investor base” and exploring the difference between the stock exchange’s main market and junior market, also known as the Alternative Investment Market (AIM).
AIM is a sub-market of the London Stock Exchange that allows smaller and often less-viable companies to float shares in order to raise funds. Described as “the wild west” and “a casino”, AIM has a more flexible regulatory system than the main market. This “light touch” regulation has been blamed for enabling a number of financial frauds cases and corruption scandals to take place.
The AIM market is popular with junior mining companies seeking to raise funds quickly without the burden of the main market’s more rigid regulatory environment. A total of 100 junior mining companies from all around the world are currently listed on AIM, according to its registry.
Following a slump in commodity prices, London’s financiers’ appetite to invest in the mining sector could be back on the table, according to a Deloitte report into the health of mining finance.
UK Investors on the Front Line
Dozens of investors — including some of the world’s largest funds — are confirmed to attend the Indaba mining conference, according to the event’s website.
Evy Hambro, co-manager of UK-based BlackRock World Mining Trust and the chief investment officer of the asset management firm’s natural resources team, is one of the conference’s key speakers.
Many UK-based asset management companies are also registered to attend the conference, with at least 36 of the 120 registered investment firms based in the UK.
Some of the perks promised to investors by the conference’s organisers included one-to-one meetings with CEOs and management teams, potential direct access to African mining ministers, full access to a VIP investor lounge for private meeting spaces and access to an online investor portal filtering the mining companies attending the event.
Richard Solly, of the London Mining Network, denounced the fact 'London money' was facilitating destructive mining activities around the world and impacting local communities.
“As a leading centre of mining finance, London sucks in money from mining sites all around the world while local residents are left to deal with the industry's destructive impacts,” he said.
“For all the industry’s efforts to present mining as sustainable, responsible and a driver of development, for communities living on mineral-rich lands these deals often mean displacement, destruction and death,” he added.
Responding to DeSmog UK's request for comment on the department's sponsorship of the event, a DIT spokesman said:
“The UK is a world leader in promoting international best practice approaches to sustainable mining developments, placing an emphasis on preserving human and natural environments in areas around a mine, while developing vital infrastructure.”
Image Credit: Fifty/ Wikimedia Commons/ CC BY-SA 4.0