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  • Social Licence to Operate in Mining
Article:

Social Licence to Operate in Mining

06 May 2020

Sherif Andrawes , Global Head of Natural Resources
Partner, Corporate Finance
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Social licence to operate, or simply social licence, is the acceptance of a mine or mining company by its employees, by its community stakeholders and by the general public. The extended stakeholder network that adjudicates on social licence also includes ethical investment funds, international human rights activists, international financial institutions and local and national governments.

These key stakeholders are demanding stronger engagement and transparency — so much so that social licence will soon be akin to a mining licence, without which mining companies will find it impossible to operate.

There is no question that investment in mining will continue to be needed. Mineral consumption strongly correlates with the economic growth and urbanisation that brings jobs and prosperity to developing countries. To combat climate change, mining is needed for the manufacture of electric vehicles, wind turbines and solar panels. To meet the aspirations of newly affluent middle-class consumers, mining is essential in the making of communications devices, consumer electronics and food production. Social licence is the key to unlocking these positive mining outcomes.

This paper focuses on mid-market mining companies’ growing need for social licence amid 21st century demands for transparency and accountability. As resource nationalism intersects with social responsibility, the importance of social licence has never been greater.

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