Mining companies are some of the biggest landowners and economic contributors in Africa. As such, they have a unique opportunity, and responsibility, to develop economic diversification strategies based on the sustainable use of land and water resources. Agriculture should be a core component of this strategy, where the needs of mining and agriculture in rural areas overlap in many ways and at all stages in the life of a mine.
ImpactAgri is working with the mining industry in Africa, and increasingly elsewhere, to help mining companies contribute to and benefit from the economic, social and environmental impacts of sustainable agriculture. ImpactAgri’s work plays a key role in the development of responsible mining strategies for many companies.
ImpactAgri Founder & CEO, Jon White, had 20 years of experience working in agriculture when he recognised the need to find a new way to improve logistics, access-to-market and financing for emerging agribusinesses in Africa. He believes agriculture can be the catalyst to deliver socio-economic development while caring for nature. “The best way to create real jobs in Africa and reduce the impact on the environment is through well-designed farming systems done in a socially conscious way,” says White, who notes the challenge in breaking the cycle of ‘slash-and-burn’. “Much of the deforestation occurring is due to slash-and-burn, where soils become poor after a few years of use, so they move to the next hectare, burn it down, plant, stay there a year, then move to the next hectare…”
Sustainably and economically viable approaches to farming can create long-term agri-employment and environmental benefits, explains White. “A mine can be a great employer for 20 years or more but when it closes there’s nothing,” he warns. “If you can create high-value agri-processing that’s inclusive and maintains employment levels then those jobs can last forever.” It’s the creation of a genuine long-term footprint that drives White and his team; the opportunity to help mining companies co-create sustainable self-standing agribusinesses, driving a shift from subsistence farming towards revenue-generating enterprises and greater employment.
Governments across Africa are increasingly wanting to issue licences to mining companies capable of supporting the population around the mine. “It's OK replanting trees when you leave a mine site, but what happens to the many people employed there when it closes?” questions White, who argues that new mines, often in environmentally sensitive areas, need attractive alternative employment opportunities to deal with the inevitable migration of workers. “You can actually create a hub of agriculture away from the mine to stop that drift, and people will go there rather than to the mine gate,” he reasons. “In sensitive areas, like Guinea and Cameroon, to have a strategy that creates a hub away from the mine, but coherent with its situation and, to a degree, supported by the mine, is a positive thing to do for all concerned.”
ImpactAgri’s other Founder and Director, David Hampton, is keen to see agriculture projects working alongside mining and other industries, both taking advantage of and spurring on the development of key infrastructure vital for the life of an industrial project and its local community. He advises that addressing key questions can help companies benefit from the agriculture sector. “Can agriculture provide sustainable jobs alongside this industrial activity? Can it contribute to the social license to operate by building community relations? Can it provide solutions for post-mine planning that deliver more than trees and dry grassland with poor biodiversity? How can agricultural technologies help rehabilitate land, stabilise tailing ponds and help remove heavy metals? All the way through the value chain, there is a crossover between agriculture and the different stages mines and other industrial businesses pass through when utilising the land. The opportunities are there.”
In Guinea, ImpactAgri is working with Anglo African Minerals to support development of their corridor and bauxite mine. White hopes the proposal will limit migration and create thousands of agriculture jobs. Working with Vedanta in Zambia, ImpactAgri is developing a large-scale horticultural operation utilising the water that is already being extracted from the mine. The goal is for the agribusiness to employ more people than the mine itself within a few years and create a significant source of fruit and vegetables for the region. Longer term development will create high-value tree crops such as nuts and citrus for export. Elsewhere, ImpactAgri is working with other companies to identify the potential for agricultural solutions to remediate land and add value to legacy assets.
White explains that sustainable intensification on ex-mining sites can also be hugely positive: “In Zambia, ImpactAgri is working with local partners to plant specific tree types on used and spent copper tailings. It looks like the moon, but by replanting the right type of crops, you can create biofuels. In turn, those biofuels can be a shared crop for our food crops.” He stresses that it’s important to value the natural capital with efficient use of water, understand the value of soil health and manage the impact on natural ecosystems.
Once these agribusinesses are given the opportunity to flourish, it’s vital to secure access-to-market by building the value chain, asserts White. “Sadly, there are many examples in Africa – whether a cassava plant for flour or a tomato factory – where the whole value chain hasn’t been addressed. Whether it’s the upstream, where they are going to sell, or the logistics to move the products, an integrated and holistic view of the requirements at each stage of the value chain are essential.”
New technologies and innovative approaches are key. White is excited about a couple of projects in development that will mix solar PV with agribusiness. “Mines need power, lots of power… If you can install a 50 MW solar panel installation with hydroponics you can farm underneath the panels. It’s a useful approach when land is not suitable for traditional agriculture and we can actually take some of that energy and use it for processing crops like cocoa and vegetables; for washing them and for cooling. Having that energy source on site can be a wonderful thing.”
Mining companies can spend millions of dollars on CSR schemes but too often it’s wasted stresses White. “Building hospitals and schools is a great thing to do… But if there isn't a network in the community and a tax system to pay for teachers and doctors, every year they have to keep financing the project. This ends up being a cash drain while they're being vilified for not creating other jobs.” He argues that projects need to offer real jobs that generate tax to be self-sustaining. “We believe you can take your CSR budget, and make it into a cash generator. Not a cost,” he pledges. “That’s the advantage of working with ImpactAgri.”
Within each country it operates, ImpactAgri identifies strong off-take partners for specific crops… For example, in Uganda, the company is allied with one of the biggest traders of macadamia nuts. “The ideal model is to start with a farm as a commercial entity that supports the business in terms of paying for equipment, off-take and processing,” says White. “But as we expand, we'd rather work with the farmers on their own land, under contract to actually deliver services to them such as irrigation systems, equipment and help with off-take. It’s very inclusive.”
Hampton highlights the constant challenge to secure financing. “On a US$40m project, the hardest funds to raise are the first $1-2mn for the environmental assessment and feasibility studies. No one wants to pay for that. It's too small for most investors, and the bigger investors want that to be done before they consider getting involved…” ImpactAgri has developed a portfolio that diversifies the risks but White concedes it’s hard to find investors for individual greenfield sites. To secure returns he recommends a minimum 10-year cycle as these are long-term projects where you need to plan for a year when yields are less than ideal, while Hampton warns against the perception that brownfield sites can offer a quicker turnaround: “In Africa, it’s often better to build something from scratch than try to turn around someone else’s problem project.”
ImpactAgri’s minimum goal is to generate half a billion dollars of investment in agricultural projects by 2025. The current pipeline is already over $300mn with more funding imminent. “We’ve found a unique proposition,” says Hampton. “We have people in our team happy talking to financiers and lawyers on ‘Wall Street’ but we also have people capable of going out in the field to tackle unique agricultural challenges alongside the communities we engage with. Ultimately, you can’t simply buy into a project in Africa sitting in an office, you have to go out there and make it happen.”