Due diligence of social risks for a mining project

Summary

An international development financing organisation hired EEM to perform a due diligence assessment of the social risks and related management approach for a greenfield mining project in West Africa in which it was contemplating a multi-million dollar investment.

Approach and Solution

EEM was mandated to review the project proponent’s evaluation of the social impacts and to assess social management plans and strategies in order to ensure that any social risks linked to the financing organisation’s investment were being well-managed. A particular focus of the review was the project’s approach to people resettlement as several thousand people would be displaced over the life of the mine.

EEM first conducted a document review covering social impact assessment documentation and management plans and submitted an interim document review report noting potential gaps with applicable standards, including the Performance Standards of the International Finance Corporation (IFC). The initial report also included a plan to validate gaps during a site visit. A site visit was then undertaken that consisted in touring the project area (mine, transportation corridor and port) as well as conducting interviews with project staff and government officials and consultations with potentially affected communities.

Results

EEM’s final report identified performance gaps that could present material risks to our client’s investment in the mining project and provided recommendations for measures to address key social risks as well as a plan for further ongoing assessment and monitoring of the project.

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