Mining companies and investors must begin accounting for the long-term social costs of their operations in investment decisions, as existing financial models often overlook the risks communities face after a mine closes, mining and sustainability executive Dr. Kgomotso Tshaka has said.
Speaking at a webinar organised by the African Centre for Energy Transition (ACCET) on Friday, November 6, 2026, Dr. Tshaka said investment models largely focus on the operational life of a mine without adequately considering the economic and social consequences that remain after extraction ends.
“Currently when in our financial modelling or investment model, we don’t really factor in the price of social risk in some of these investments,” she said.
“And therein lies the problem, because the focus is the operation, you know, from exploration to mine closure. We don’t really consider beyond the life of mine.”
Her comments point to a gap in how mining investments are assessed, particularly where the financial commitments made during a mine’s operating years do not adequately provide for the longer-term transition of host communities.
While rehabilitation guarantees are among the existing mechanisms for securing mine closure obligations, Dr. Tshaka argued that additional funding arrangements are needed to support communities beyond the immediate environmental restoration of mining sites.
“There are various funding mechanisms that can be employed,” she said, identifying ring-fenced social transition funds, endowed funds and blended finance as possible options.
“Social transition funding could be a ring-fenced fund. It could be an endowed fund that is able to sustain initiatives beyond a specific timeline. We could look at blended finance for some of these.”
She acknowledged that rehabilitation guarantees also have challenges, depending on the jurisdiction, suggesting that relying on existing arrangements alone may not adequately address the wider costs of mine closure.
Dr. Tshaka also called for stronger collaboration to bring development finance and infrastructure investment into initiatives designed to support communities and develop alternative economic activities.
“And this becomes, you know, possible when you have collaborative partnerships coming into the work we’re trying to do. You can bring in development finance. You can bring in infrastructure investment and vehicles into those initiatives,” she said.
She further suggested that former mining infrastructure could itself become a source of income for communities if it is repurposed productively.
“Sometimes also looking at how we can monetize repurposed mine infrastructure can become a revenue stream for the communities.”
Beyond identifying funding sources, Dr. Tshaka said mining companies must make explicit financial commitments to community development as part of their operational responsibilities.
She identified outcome-led planning and capital allocation for host communities as key responsibilities of mining companies, arguing that social transition should not be treated as an afterthought when operations approach closure.
The way projects are defined could also determine whether they attract the right investors. Responding to a question on financing opportunities, she said funding was available, including through the European Union, but initiatives needed to be framed around the interests of communities rather than the immediate needs of mining companies.
“The opportunities are there in terms of funding in currently, you know, in the EU, there’s a lot of funding that’s available, but the mismatch is how we define the programs or interventions that we want to bring onto the mine, and how we define them from a community benefit, not from a corporate benefit or a mining benefit,” she said.
“And that distinction becomes critical in how you can, and are able to attract the right investor, investor to come in and work in partnership with you.”
Dr. Tshaka’s proposals place greater responsibility on mining companies, investors and governments to ensure that the financial planning for a mine extends beyond the period in which it generates revenue.
For host communities, the challenge is not only securing funds to rehabilitate land after extraction, but also ensuring that the economic and social foundations needed to sustain livelihoods are financed before mining operations come to an end.
