Financing Fairly A CASE STUDY 2021 From Policy to Practice: Is the Industrial Development Corporation a Responsible Investor?

The report argues that the IDC's investment in MC Mining demonstrates a continued funding of unsustainable, climate-risky projects and highlights critical failures in the IDC's Responsible Investment Policy and due diligence processes. It details the environmental and social risks associated with MC Mining's operations in the Soutpansberg area, including threats to the Mapungubwe World Heritage Site and the Vhembe Biosphere Reserve. The document concludes that the IDC's lack of transparency and failure to integrate sustainability and human rights standards into its decision-making expose public funds to significant risks and undermine South Africa's climate goals.

• The IDC's Responsible Investment Policy and due diligence processes are inadequate, failing to set out criteria that adequately address sustainable development, and do not require clients to phase out coal mining or disclose greenhouse gas emissions.
• The IDC Act potentially permits the funding of environmentally destructive activities because Section 5 requires that applications for finance be considered strictly on economic merits, regardless of other considerations.
• The IDC provided a R240 million loan facility in 2017 to MC Mining for the Makhado Project and Vele Colliery, which the report argues serves to de-risk investment in an industry with poor long-term growth prospects due to climate and social impacts.
• MC Mining has a history of environmental non-compliance, having previously conducted activities at the Vele mine without required zoning permits, water use licenses, and environmental authorisations.
• The IDC's investment in MC Mining is linked to its investment in ArcelorMittal South Africa, as ArcelorMittal is the key off-taker for the Makhado project, despite ArcelorMittal being the third highest emitter of greenhouse gases in South Africa.
• The proposed Musina-Makhado Special Economic Zone (MMSEZ), which the IDC helps coordinate and finance, is assessed as socially and environmentally unsustainable, with potential negative impacts outweighing economic benefits.
• Mining activities in the region threaten the Mapungubwe Cultural Landscape (a UNESCO World Heritage Site) and the Vhembe Biosphere Reserve, with the potential to destroy up to 26% of the reserve's surface area.
• Mining and industrial developments in the water-scarce Limpopo region have already lowered the water table and dried up boreholes used by the Mudimeli community.
• The planned thermal coal-fired power plant at the MMSEZ is estimated to increase South Africa's emissions by 3%, and the total emissions from the development could constitute 11%-16% of the country's total carbon budget.

APA

Halim, D., Govindsamy, L., & Fourie, M. (2021). Financing Fairly A CASE STUDY 2021 From Policy to Practice: Is the Industrial Development Corporation a Responsible Investor? Centre for Environmental Rights. https://cer.org.za/wp-content/uploads/2021/07/CER-FFCase-Study-Final.pdf?x21779

Chicago

Halim, Daiyaan, Leanne Govindsamy, and Melissa Fourie. Financing Fairly A CASE STUDY 2021 From Policy to Practice: Is the Industrial Development Corporation a Responsible Investor? Centre for Environmental Rights, 2021. https://cer.org.za/wp-content/uploads/2021/07/CER-FFCase-Study-Final.pdf?x21779.

Wikipedia

{{cite report |last1=Halim |first1=Daiyaan |last2=Govindsamy |first2=Leanne |last3=Fourie |first3=Melissa |title=Financing Fairly A CASE STUDY 2021 From Policy to Practice: Is the Industrial Development Corporation a Responsible Investor? |publisher=Centre for Environmental Rights |date=2021 |url=https://cer.org.za/wp-content/uploads/2021/07/CER-FFCase-Study-Final.pdf?x21779 |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{halim2021financing, author = {Halim, Daiyaan and Govindsamy, Leanne and Fourie, Melissa}, title = {{Financing Fairly A CASE STUDY 2021 From Policy to Practice: Is the Industrial Development Corporation a Responsible Investor?}}, institution = {Centre for Environmental Rights}, year = {2021}, url = {https://cer.org.za/wp-content/uploads/2021/07/CER-FFCase-Study-Final.pdf?x21779}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }