AXCENTIUM Zimbabwe managing partner Charity Mtwazi says international buyers are increasingly purchasing from companies that demonstrate responsible practices, especially for capital-intensive businesses like mining.
The mining industry is facing a crucial moment, where international mineral buyers are opting to deal with miners that incorporate environmental, social and governance (ESG) reporting principles into their operations.
The country’s record in sustainable mining and social protections remains poor, which experts warn is a threat to investments into capital intensive sectors such as mining.
Speaking at a panel discussion at the Swedish-Zimbabwean Sustainability in Mining Expo in Harare on Friday last week, Mtwazi said miners needed to adopt ESG principles in their operations.
“Globally, there is a drive to buy from sustainable operations. We have observed that this trend is also emerging in agriculture, where businesses prefer to engage with sustainable operations. They seek assurance of longevity in these operations,” she said.
Mtwazi noted that this trend was providing a competitive advantage to businesses that could substantiate their sustainability credentials.
“Buyers want to see responsible mining practices. This trend opens up more markets for companies, prompting them to consider which markets they want to access and the specific restrictions, laws and regulations in those areas,” she said.
“The availability of green finance globally is substantial and businesses are increasingly evaluating their operations to determine if they meet sustainability criteria. This financing often comes at very low costs.”
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Mtwazi said businesses that prioritise sustainability not only attracted conscientious clientele but also gained access to financial incentives.
“Ultimately, everyone is in business for profit, regardless of the means to achieve it,” she said.
“Mining operations that embrace sustainability are witnessing a reduction in operational costs, which positively impacts their bottom line.”
Mtwazi noted the rise in green finance, which had created an environment where businesses with sustainable practices could secure loans at lower interest rates.
“The reality is that sustainable operations consider how mining and ore extraction is conducted, including power utilisation, which has a direct impact on profitability,” she said.
Mtwazi said businesses that did this were achieving profitability much sooner.
Zimbabwe Investment and Development Agency chief executive officer Tafadzwa Chinamo said “there are markets where to export, the food produced must be sustainable now or within two years” .
“This requirement applies to both agriculture and, in some cases, mining. It is something we actively promote,” he said.
This requirement is becoming non-negotiable for many buyers, Chinamo added.
However, he acknowledged that not all businesses were currently equipped to meet these standards.
“Some companies are still on the sidelines. We have our Environmental Management Agency working across all sectors,” Chinamo said.
“Most major projects receive certification confirming their environmental sustainability.”
He said the pressure for sustainability was not only from consumers but also from regulatory bodies.
“Governments are implementing stricter regulations that require companies to adhere to environmental standards, often accompanied by penalties for non-compliance,” Chinamo said.
“These legislative measures are compelling businesses to adopt sustainable practices or risk losing market access.”
