Image: Kim Alaniz/Flickr, some rights reserved (Creative Commons).
When it comes to Brexit, uncertainty and speculation seem par for the course. But some businesses and industries seem more worried than others. One of the sectors that seems relaxed, in terms of preparation to leave the European Union, is mining.
A CBI survey, published in January, found that just 13 per cent of mining firms had undertaken planning for when the UK leaves the European Union. ‘While these companies may be registered in the UK, they predominantly operate in non-UK and non-EU markets and are therefore less exposed to changes in the UK-EU relationship,’ said the CBI’s report.
In fact most big, high earning companies are in this position; most of the revenue made by businesses in the FTSE 100 comes from abroad – when the pound is weak they are making more money.
Although they have since taken a hit, according to analysis conducted by the Telegraph last year, mining companies Glencore, Antofagasta, Anglo American and Rio Tinto were among the five biggest FTSE winners post-Brexit referendum. Glencore's share price went up by a massive 104 per cent, while Antofagasta enjoyed an 81 per cent rise. The shares of mining giant BHP rose 40 per cent.
Work by Citywire – a website for professional advisers and investors – has backed this up. According to their analysis, while in general UK equities underperformed between the referendum and the end of January this year, mining is one of the industries to be better off, having produced returns of 107.69 per cent during the period.
Being such big multinational players, mining companies are well placed to try and influence the Brexit process to their advantage. A number of government and former government workers have connections to the mining industry causing so much damage abroad. Several people have moved between the boards or staff of these companies and positions in Westminster. A 2016 investigation by Greenpeace identified 14 people with experience in parliament who then worked in the government relations departments of seven companies, including Anglo American and Glencore.
An even more favourable environment for large companies – like mining multinationals – risks strengthening the grip of the extractive industries on the lives of people around the world. Theresa May has talked ‘enthusiastically’ about ‘opportunities’ to maximise benefits for Britain by strengthening relationships with Commonwealth countries like South Africa as the UK leaves the European Union and seeks to negotiate its own trade deals elsewhere. This attempt to boost trade with the Commonwealth has reportedly been described by Whitehall officials as ‘empire 2.0’. Many countries where mining companies operate are part of the Commonwealth, and often in the Global South.
In February, the Department for International Trade was a ‘platinum sponsor’ of the Investing in African Mining Indaba annual conference in Cape Town, attended by thousands of delegates. The conference website invites UK companies to join the event, “focused on the successful development of mining interests in Africa” and offered access to ‘key decision makers’ in African mining.
Brexit bankroller, Arron Banks, the man who spent £9.6 million funding the organisations which cheerled Brexit, including Leave.EU and UKIP, is reported to own diamond mines in South Africa and is an investor in gold and uranium. Banks joined Nigel Farage – a former commodities trader – to speak at the Mines & Money conference which took place in London at the end of 2017, as people from communities impacted by mining protested outside.
While multinational mining companies – often with strong links to London – profit from natural resources in other countries, violence, human rights abuses and environmental destruction are all too common.
Brexit could coincide with a mining revival here in the UK and the push to cash in on the rise of battery-powered vehicles. This provides the perfect opportunity for an industry associated with environmental degradation to give itself a green make over.
Cornwall could become a key provider of lithium and tin – both of which could be used in batteries. The Government agency Innovate UK has awarded a £850,000 grant to a project looking for a lithium ‘fingerprint’ in Cornwall from space. The results of the project, which are due in March 2018, could help find the best places for extracting lithium in the future.
New coal mines are also back on the cards, despite the Government saying it would phase out coal-fired power stations by 2025. In County Durham a campaign of direct action has begun at a site near Dipton. Over 85,000 people have signed a petition calling for intervention from Sajid Javid MP, Minister for Communities and Local Government to stop new coal mines in County Durham.
A Brexit driven by profit for big business, a slashing of ‘bureaucratic’ environmental and rights-based regulations and a hankering for the past is bad news for all of us…. Well nearly all of us.