While acknowledging that it faces serious ESG (environmental, social and governance) challenges, ING Investment Management International (ING IM) ESG specialist Nina Hodzic believes the South African mining industry is committed to raising standards.

Mining is a key industry in South Africa, accounting for around 50% of South Africa's export earnings and more than one million direct and indirect jobs. But it also faces significant exposure to environmental and social issues, including severe environmental damage, health and safety, bribery and violations of local communities and human rights. This was underlined vividly by the unrest in Lonmin’s Marakina mine in August 2012, which resulted in 46 people losing their lives.

During the recent annual UNPRI (United Nations Principles of Responsible Investment) assembly in Cape Town, Hodzic visited the mine to assess how these issues are being addressed.

She says she was encouraged to see how knowledgeable and passionate top management are about mining and to hear that they have worked in the mines themselves during their career.

“Safety is extremely important to the company. This was very clear during the mine visit as there were posters and other educational material hanging everywhere to remind the employees of the importance of adhering to safety rules. Lonmin has received various awards for safety achievements.”

“Interestingly, I have spoken to people in Johannesburg who were rather critical about the government, but were actually quite positive about the mining companies as they provide jobs and invest in local communities, practically taking over the role of the government,” adds Hodzic.

“The mining industry is facing many challenges, but I am positive about its commitment to transformation, community development and improved environmental and social practices.”