Markus Weimer, Senior Analyst| 26 June 2013

African Mining: Risks and Rewards

We enable our clients to succeed in complex environments

Control Risks is a global, independent risk consultancy specialising in political, integrity and security risk

Since 1975 we have worked in over 150 countries for more than 5,300 clients

Trusted advisor to more than 80% of the Fortune 500

34 offices on 5 continents

Ethical and independent

Our worldview

Great rewards possible

But key risks:

• Political

• Social

They are interlinked.

Why are these risks central?

• Complex – require on-going engagement, analysis and readiness to act;

• Incalculable – not necessarily affecting the bottom line immediately;

• Wide-reaching – potentially all operations are exposed to these;

• Devastating – if things go wrong they can potentially go very wrong;

• Knock-on effects – e.g. project execution, cost of operations, supporting infrastructure, etc.

Setting the scene

Perceptions

• Expectations vs Reality

• Jobs, growth, basic services;

• Poverty, inequality, lack of human security, fragility;

Political Actors

• Government(s) – local, regional, national;

• Civil society organisations – local , national, international, global;

• Citizens – tax-payers, opposition party members, media consumers;

• Donor governments;

• Investors!

Wider context

• Media – local, national, international, global social networks;

• Local, national, international and global governance institutions;

Governments

Local, regional, national;

Key questions:

• Who to talk to? Will this change in the future?

• Is there policy coherence amongst various levels?

• Is there capacity locally?

• Legitimacy?

• How does government fit into wider social and political dynamics?

• How do short and long term priorities play out at the various levels?

Civil Society

Local, national, global;

Key questions:

• What are the issues?

• Who are the actors?

• Who sets the agenda?

• What are the perceptions vis-à-vis investors?

• How to engage?

Citizens

• Voters;

• Taxpayers – emerging consciousness as citizens;

• Consumers and producers of information – media, social networks;

• Increasingly young (peri-)urbanites with some degree of education;

Key questions:

• How do citizen dynamics change the context? (locally, nationally?)

• How to engage with citizens effectively? (employment, CSR, civil society?)

Donors

• Traditionally influential for better or for worse;

• Economic crises – reduced budgets;

• Shift from pure development and aid to more trade and other state interests;

• Often influential international players – EU institutions, G8, UN, Bretton Woods, and global governance institutions;

• Emergence of new players – BRICS;

Key questions:

• How does the changing landscape affect traditional donors and the context?

• How will the emergence of new donors change the scene?

• What does a greater focus on trade imply?

Investors

The Investor Effect:

Investments impact the context in which they are made;

• Even if unintended or unaware;

Key:

• Understand the context from the initial stages of investment;

• Monitor the context continuously;

• Develop and maintain an on-going understanding of investment impact (including perceptions);

• Design and implement mitigating measures;

Mitigating measures

For example:

• On-going analysis of context (local ,national, international, global);

• Stakeholder maps;

• Engagement strategies – who, how, where, how often, etc.;

• Communication strategies for on-going operations;

• Communication strategy for crises;

• Due diligence;

• Targeted CSR;

• Early adoption of mitigating measures

Thank you!

markus.weimer@controlrisks.com