Animus Online Sustainability Magazine met with Tom Albanese. Tom is the Chief Executive Officer at Vedanta Resources Plc and Sesa Sterlite Limited, a subsidiary of Vedanta Resources Plc. Tom was formerly the Chief Executive of Rio Tinto, a global diversified mining company, from May 2007 to January 2013. Tom joined Rio Tinto in 1993 when the company acquired Nerco, where he was Chief Operating Officer. Tom is also on the Board of Directors of Franco Nevada Corporation, a Toronto-based gold-focused royalty and metal streaming company with assets around the world, which he joined in August 2013. Tom holds a Bachelor’s degree in Mineral Economics and a Master’s in Mining Engineering from the University of Alaska. Tom received the ‘Mining Foundation of the Southwest’ 2009 American Mining Hall of Fame Award, for his dedication, knowledge, leadership and inspiration to his peers in the mining industry. In 2009, he joined the Board of Visitors for the Fuqua School of Business at Duke University in North Carolina.
What is the scale of your operations in Africa?
Vedanta Resources has been in Africa now for more than a decade, and I am bullish about the potential, both of our existing companies and their opportunities but also for the future of mining across Africa. Our business operations include copper mining in Zambia, Zinc business in South Africa and Namibia, iron ore mining in Liberia and offshore gas in South Africa.
‟In the Zambian Copperbelt, at KCM, we continue to invest and to develop. Vedanta paid $261 million to acquire a 79.4% stake in KCM. We have invested $2.9 billion over the last decade in a new copper smelter, 3 new concentrators, a tailings leach plant and new underground facilities.
In support of wider economic development in the area, we continue to expand our vocational technical college – one of the largest private sector facilities in the region. We have paid more than $850 million in taxes and local rates. To add to this, we have spent $120 million on local community initiatives in areas including malaria prevention, sustainable agriculture, school, clinics and community healthcare.
What has been your company’s experience working in different countries in Africa, amidst obvious differences in governance systems and expectations?
Vedanta is privileged to operate in Africa, which offers a huge diversity of political systems and physical geographies. We have seen significant cultural differences between regions, countries, cities and even communities.
There are many positive aspects about Africa; It is rich in minerals and African people choose to willingly to participate in their success story.
There is also a legacy, which for some has created a certain reluctance to invest in Africa and emotions make it difficult to cross those bridges.
There may be certain challenges, but from my perspective we see huge long-term benefits and significant growth potential in operating across Africa. For Vedanta I think it has been a very successful journey. Our first entry into Africa was 10 years ago with the copper business in Zambia when we acquired KCM.
We saw the benefits of investing and stepped into the business when KCM was at end of its mining stage. All assets had been starved of capital for 20 years and we made capital investments of US$ 2.9 billion in order to modernize the business.
Our zinc business in South Africa and Namibia was created following the purchase of Anglo American’ zinc business a few years ago. The zinc mines were already fairly developed and we have been successful in further increasing the duration of those mines.
Are you only focused on the mining business in the countries where you operate?
Whilst mining is our primary business focus, in the areas where we operate we have made substantial contributions to local communities, including US $23 million in contributions to CSR, health and education projects last year, and community programmes benefitting approximately 150,000 people across four countries.
The Konkola mine is one of the wettest mines in the Zambian Copperbelt, with inflow volumes of approximately 400,000 m3 of water per day. The water from all pump stations is channelled through sumps for settling and sedimentation before clear water is pumped to the surface for discharge into the Kafue River.
Prior to 2003, this water was polluted, but we have invested a large amount to ensure the water is now clean, as approximately half a million people in Zambia rely on that water either for consumption or irrigation. We have also undertaken a number of social and environmental programmes, including the construction of local hospitals, schools, and contributions to other vital infrastructure.
The Vedanta team in Zambia is constantly striving to further improve communication and build trust with communities through the development of local initiatives and long-term investments. .
The northern cape of South Africa is underpopulated and desert-like, and it can be very difficult for the local population to find jobs. Our zinc mines have helped create jobs and in turn improved living conditions for many people.
My vision for the Northern Cape is that it would not just involve zinc mines but other mines in the vicinity as well.
In 2011 we acquired iron ore assets in northern Liberia.
Unfortunately Liberia has suffered greatly over the past 10 years due to civil war and the government is now working hard to rebuild the country.
Government leaders are keen to make iron ore exportation a part of this rebuilding process for the economy and we are working together with the government to develop ports that provide sustainable exports.
We are also working with local authorities on health and safety issues, such as a recent outbreak of the ebola virus in northern Liberia, Guinea and southern Sierra Leone.
As a company operating in different parts of Africa, it is essential to be prepared and take the necessary precautions.
This overview gives a synopsis of the variety of the different areas we operate in and associated challenges.
What is Vedanta’s approach when engaging in sustainability in the different countries you operate? Do you respond to local enforcement, requirements from Stock Exchanges, global guidelines or do you take the lead?
It is important for mining companies to take on social responsibilities where they operate, however this does not necessarily have to be an individual effort. There is a need for a collective approach and the development of sustainable partnerships which bring together companies, NGOS, civil society and the government.
As a mining company, our focus is on the mining business; however we are aware that we also have a huge economic and social impact where we operate, particularly in remote areas.
The ideal situation is for companies and governments to work together in joint private public partnerships. We cannot influence how governments distribute tax revenues from mining companies, but we can encourage and promote partnerships with governments to put in place viable and sustainable socio-economic vehicles.
If a mining company’s growth does not seem to match the development of local communities, then there is the likelihood of resentment which is not beneficial for business.
How do you communicate your sustainability projects and raise visibility? Do you follow a billboard approach?
It is important for us to have substantial visibility in terms of our sustainability efforts, so that we can create a distinctive brand name for ourselves and demonstrate the positive contributions we are making to the local communities where we operate.
However, we do not want to adopt a billboard approach by marketing ourselves as a mining company. We are a B2B business and even though we encourage visibility of our sustainability work, we believe it should be a shared approach with our partners in respect to community efforts.
Interview by Ronald Chawatama Editor and Network Manager of Animus Sustainability Magazine (www.animus-csr.com); For more news, reports and research on sustainability in Africa follows us on Facebook; Twitter and Linkedin