What determines the breadth and depth of Zambia's backward linkages to copper mining? The role of public policy and value chain dynamics

This paper investigates the dynamics of upstream linkages development to copper mining in Zambia. The breadth and depth of the local mining supply chain was deeply shaped by policies adopted in the 1990s under the Structural Adjustment Programme. These policies succeeded in attracting much-needed FDI in the mining sector, including Chinese and Indian FDI, but had a negative impact on the level of value-addition undertaken by local suppliers. In the post-privatisation era, the dynamics of the local supply chain suggest that supply firms' upgrading and sales growth were determined by firm ownership and value chain governance. In fact, forward linkages to buyers other than Chinese and Indian mining companies, and backward linkages to parent companies and technology providers were critical in supporting supply firms' success in the mining value chain.     

Small–scale mining in South Africa: Past, present and future

Mining is an important part of the South African economy and has been the driver of much of the economic development of the country. However, the small–scale mining subsector still has to realise its full potential. A small–scale mine has been defined as a mining activity employing less than 50 people and with an annual turnover of less than 7.5 million Rand and includes artisanal mines. Small–scale miners are involved in many commodities but there appears to be a bias towards gold, diamonds and quarrying for construction materials, including brickclays. Small–scale mining is regulated by the same legislation (i.e., for the environment, labour, mineral rights, exploration and mining permitting, and skills development) as large–scale mining, though compliance is low, particularly where artisanal mining in concerned. The effective participation of small–scale miners in the mining sector is hampered by their lack of skills, i.e., technical, business and management, and their limited access to mineral deposits, capital and markets. Some of these hindrances have been inherited from the imbalances of the colonial and apartheid eras and continue to act as barriers, making entrance to the industry difficult. For those who have entered the industry out of desperation, as is the case with most artisanal miners, their activities result in negative impacts evident in the inefficient, unsafe and environmentally unfriendly operations. With the advent of the new political dispensation in South Africa, a new era is dawning for the country’s small–scale mining subsector. This has resulted in a change of attitude and new government policies which have led to special programmes being put in place to promote the subsector. Intervention strategies for the support of small–scale mining (some of which are already in operation) include programmes for kickstarting mineral beneficiation and value–addition projects, development of appropriate technologies and skills and technology transfer. Proponents of small–scale mining see a well–regulated industry as being the cornerstone of future rural economic development, particularly for previously disadvantaged communities in the poverty nodes.     

Linkages in Ghana's gold mining industry: Challenging the enclave thesis

By 2009, Ghana was the second-ranked African producer after South Africa, and had become the world's ninth largest producer of gold, at some 3.8% of global production, up from 2.6% five years earlier. Gold production volumes and revenues rose significantly over the decade from 2000. Yet gold mining tends to be perceived negatively in Ghana, and is seen as providing far less than it should in terms of public revenue, employment, skills development and spillovers, and localised economic development. Gold mining is often depicted as having an enclave status, disconnected and isolated from the rest of the economy. In contrast, the research findings here demonstrate that after a period of strong investment and growth, gold mining can no longer be viewed as an enclave activity: it is in fact more deeply linked into the Ghanaian economy than hitherto understood, through a set of as yet under-researched but promising economic linkages, notably backward linkages, which can potentially be strengthened by policy and support measures.     

South African mining equipment and specialist services: Technological capacity,export performance and policy

South Africa has developed a technologically sophisticated and globally competitive mining equipment and specialist services sector. The paper provides evidence for and measurement of technological competency and global competitiveness and a brief outline of why South Africa was successful in this regard. While there are significant prospects for future growth, there are, at the same time, a number of constraints and South Africa is becoming a less advantageous site for both production and for innovation. Current government policy does not address these constraints and the sector does not feature in government’s vision for industrial or technology development. An alternative approach is proposed whereby the constraints are addressed and the companies supplying the mining sector that have sophisticated technological competencies are encouraged to spread “laterally” into new products and new global markets. By way of conclusion, the importance of this sector in developing countries where mining plays a major role is outlined.     

Ghana: revival of the mineral sector

After almost two decades of decline, Ghana's mineral sector has rebounded significantly and is currently the main foreign exchange earner. Gold mining is the principal activity within the sector and accounted for 41 percent of total export earnings in 1996. This paper presents an overview of Ghana's mineral industry and covers mineral resources, production and reserves; mining investments; the role of mining in the economy; and the structure of the industry. An overview of the national mineral policy is also presented to depict the current regulatory and fiscal environment in which the industry operates. The spectacular reversal in mineral sector performance can be attributed to the adoption of World Bank recommendations in a new national mineral policy, the 1986 Minerals and Mining Law, aimed at revitalizing the sector.     

The mining industry in the European Union: Analysis of inter-industry linkages using input–output analysis

Input–output modelling is a useful tool in policy analysis and economic planning. This methodology is used to detect the inter-industry linkages known as forward and backward linkages. Examination of these measures provides one mechanism for identifying “key” or “leading” sectors. The main objective of this paper is to measure the linkages of the mining and quarrying industry in the European Union (EU) and to determine if any of the industry subsectors can be considered key sectors. The paper shows that three subsectors can be considered key sectors: the mining of coal and lignite and extraction of peat in Germany; mining of metal ores in Sweden; and other mining and quarrying in Austria, Denmark and Spain. These sectors are more stimulated by overall industry growth than other sectors and have greater impacts in terms of investment expenditures on the national economy than other sectors. The values of the forward and backward linkages show that the mining and quarrying is an industry that would be stimulated by an increase in a regional economy's production more than other sectors, while an increase in the mining and quarrying industry's output would not stimulate this regional economy more than an increase in other sectors.     

The geographic concentration of world mineral supplies

Mineral reserves are unevenly and erratically distributed throughout the world; those countries which were intensively explored in the past — the USA, Canada, the USSR, Australia, South Africa, and a limited number of Asian, African, and Latin American countries — control a large share of many of the industrially important metallic minerals. Current attitudes towards exploration and the mining industry in both the developed and the less developed countries should clearly encourage rather than discourage new exploration. Given an increase in exploration, new reserves may well be found in previously unexplored areas, but any major increase in world mineral supplies will probably come from mining very low- grade deposits and developing new methods of mining and processing non-conventional ores. While it is vital to increase research and development in exploration techniques and mining and processing technology, it is also critical to maintain current levels of consumption and trade by reversing the trend towards trade restriction on the part of some of the less developed countries who are important mineral exporters.     

Understanding the dynamics and competitiveness of the South African minerals inputs cluster

South Africa has developed niche competencies around the extraction and processing of mineral resources. Firms involved in the manufacture and supply of inputs to mining and mineral processing represent a key source of competitive advantage upon which future growth and development in the country can be planned. Drawing on a qualitative and quantitative study of 678 supplier firms conducted in 2004, this paper presents an assessment of the state of the South African minerals inputs cluster. The various demand and supply relationships, dynamics, and growth opportunities within the cluster are highlighted and the threats affecting the cluster's future competitiveness reviewed. The interventions needed to overcome and/or enhance them are also identified.     

The diversification of the global mining equipment industry – Going new places?

This paper examines the profile of the global mining equipment supply industry, looking at the largest producers and consumers of mining equipment, tracking the changes in global flows of such equipment over the past decade. This paper shows that while the conventional producers of mining equipment (United States, Germany and Japan) have increased exports over the mining boom, the greater gain has been made by countries in the South (particularly China). The destination market for mining equipment has also begun to change, increasingly moving towards new mining sites (in Africa, East Asia and Latin America) and away from the traditional mining countries (Europe and North America). In SSA, China increasingly accounts for a rapidly growing share of mining equipment imports, but this trend is associated with the general increase in imports from China rather than China's resource specific engagement with SSA.     

Linkages to manufacturing in the resource sector: The case of the Angolan oil and gas industry

This paper discusses the current state and future prospects of backward production linkages to the manufacturing sector in the Angolan oil and gas industry. The paper finds that local value-added links are currently limited to labour and to a lesser degree in basic services. However, there is a realistic and strategic potential for local manufacturing linkages to expand in the oilfield services sector of the industry, which in turn can stimulate industrial development. For this to be achieved, the factors that are currently constraining the expansion and deepening of linkages have to be addressed, namely, a weak local content strategy, a weak local skills and industrial base and the integration of industrial and oil sector policies.     

Perspectives on corporate social responsibility in the chemical sector: A comparative analysis of the Mexican and South African cases

In recent years, the debate on corporate responsibility has shifted from a focus on environmental management towards a broader concept of corporate social responsibility (CSR). This article examines the chemical industry's approach to CSR from the perspective of two emerging economies: Mexico and South Africa. The global chemical industry was one of the first to respond to public concerns about environmental pollution, toxic waste and human health by adopting an industry‐wide code of practice, known as Responsible Care. This article examines the extent to which the chemical industry has responded to the broader debate on CSR. On the basis of a comparative case study, this article argues that the response to social issues by Mexican and South African chemical companies has tended to be limited to the ‘community awareness and emergency response’ (CAER) or community dialogue component of the international voluntary management framework, Responsible Care. Similarities and differences in regulatory and institutional conditions, as well as different levels of civil society engagement, reveal additional limitations for CSR, beyond that of the Responsible Care framework. This article argues that the socio‐political context influences the extent to which companies embrace CSR, especially in emerging economies, and highlights several challenges for the chemical industry in moving forward on CSR: credibility, stakeholder engagement, value‐chain accountability, disclosure and transparency. Reflecting on these challenges, the authors conclude by recommending a renewed focus on: (1) developing a broader set of CSR management practices beyond Responsible Care; (2) institutionalizing stronger accountability measures, such as reporting and verification; and (3) developing multi‐stakeholder partnerships that complement regulation and build public sector regulatory and guidance capacity.     

Mining development in sub-Saharan Africa

Mineral production from sub-Saharan Africa is an important contributor to the economy at the country, regional and global levels. As an example, in relation to global production, the region provides 40% of diamonds, 20% of bauxite and 20% of rutile. However, with two or three notable exceptions, the region's share of mineral production has been declining compared to that of other regions. Whereas in some cases ore reserve depletion has been a factor, the most important underlying cause has been the absence of an enabling environment to attract high-risk exploration investment and to support private sector mining development. There has also been insufficient re-investment by the region's state dominated mining enterprises. Overall, growth is unlikely to occur unless an enabling environment is created to secure and maintain the appropriate levels of investment. The World Bank has recently initiated an African Mining Policy Study with the objective of recognizing and then introducing required adjustment processes into the region's mining industry.     

R&D prospects in the mining and metals industry

The mining and metals industry is considered more-or-less technology mature as it spends less than 1% of its revenues on R&D. In the period 2003-2008, that sector saw a very significant increase in profitability. Yet, during the same period, mining and metals companies continued to trim R&D spending, a trend that started in the early 1980s. In the near future the mining and metals industry will face significant challenges including an increased demand from the developing world counterbalanced by an overall trend to lower ore grades and with high pressure to reduce energy consumption and carbon dioxide emissions. To overcome these challenges, the mining and metals industry will likely face the need to considerably increase its R&D efforts. As the world enters a period of economic uncertainty, the sector will need to revise its approach towards R&D, reconsider its position against collaborative research with academia and other institutions, and be more creative when it comes to R&D funding.     

Economic and employment impacts of offshore wind for Ireland: A value chain analysis

ABSTRACT

The imminent development of a number of offshore wind farms in the Republic of Ireland presents a sizable opportunity to stimulate the Irish economy through the growth of an indigenous and globally competitive offshore wind supply chain. This study uses a value chain analysis to evaluate the economic and employment potential of the offshore wind sector for Ireland. The analysis is based on the expenditure on products and services required to develop an offshore wind farm, the planned capacity of projects in the pipeline, and the ability of Irish companies to supply the sector. Results suggest that by 2030, 2.5–4.5GW of domestic offshore wind development could create between 11,424 and 20,563 supply chain jobs and generate between €763 m and €1.4bn in gross value added. This is the first study to estimate domestic GVA potential for the sector.     

South African gold mining taxation : An example of a resource rent tax

Theoretically, a resource rent tax is neutral in that it does not influence the allocation of resources. However, the application of such fundamental principles in the tax formula of the South African gold mining industry negates the neutrality principle. A progressive element in the tax rate encourages mining of submarginal ores - leads to misallocation of resources. However, it substantially reduces the financial risks of a mining company engaged in the extraction of a commodity characterized by price volability, such as gold, and permits economies of scale in mining and encourages conservation of a non-renewable resource. As long as prices increase faster than costs, the advantages of this system probably exceed the disadvantages. The choice of the threshold rate in such a tax system is critical. If it is too high it will encourage mining of submarginal ores, and if too low it does not recognize the peculiar risks of gold mining investments.     

Institutional, Legal, and Economic Instruments in Ghana's Environmental Policy

The environmental situation in Ghana is characterized by desertification, land degradation, deforestation, soil erosion, and inadequate water supply in the northern regions of the country. The population as a whole is growing at a rate of 3% per annum, with even greater urban growth rates, due to rural out-migration. Large parts of the coastal zone in the south are rapidly developing to become one large suburbanized area. Water quality is particularly threatened in the urban and industrialized areas, which are mainly located in the southern part of the country. The coastal lagoons and coastal waters are moderately to heavily polluted. Erosion extends along the whole Ghanaian coast with excesses, for example, in the Keta area, where during the last century over 90% of the original buildings have been washed awayby the sea. The obvious environmental consequences of the mining sector are illustrative of the environmental threats caused by a fast growing industry and industrializing agriculture, in a country where environmental policy is only in its formative years. Desertification, food insecurity and coastal erosion all contribute to an increasing number of environmental refugees. Environmental policy in Ghana is a post-Rio phenomenon. Environmental laws, a Ministry of Environment, Science and Technology, an advisory National Committee for the Implementation of Agenda 21, and a fully mandated environmental administration have been established. This administration advocates a progressive attitude towards environmental legislation and points out the specific utility of economic and legal instruments in environmental management in this relatively fast developing country. The choice of instruments for environmental management is increasingly influenced by the specific state of African environmental and technological capacity and by a call for the recognition of the role of traditional customs in nature conservation. This African perspective on environmental management is further intensified by an unmet need for regional, transboundary cooperation in the West African subcontinent. This specific West African context calls for an elaboration of an effective capacity-building program for environmental management in the area.     

Seeds of promise: Developing a sustainable agricultural biotechnology industry in sub–Saharan Africa

In a continent ravaged by poverty, disease and malnutrition, agricultural practices have changed little over millennia. Of all the new technologies recently arisen, molecular biotechnology is one of the few that could signi ficantly improve the livelihoods of the large numbers of people in sub–Saharan Africa. Its impact could exceed that in the developed world, where a multi–billion dollar a year agricultural biotechnology industry has emerged, secured on the back of a highly skilled research and educational sector, extensive biosafety measures, and a strong corporate sector. For much of sub–Saharan Africa, the absence of these foundations constitutes a substantial hurdle to the development of a sustainable biotechnology industry. A critical element is the development of an indigenous and innovative agricultural biotechnology community — one that is responsive to African crops, farming practices and economic imperatives, yet sensitive to local concerns and biosafety issues surrounding use of the controversial GM technology.     

Risk attitudes and mitigation among gold miners and others in the Suriname rainforest

This article analyses the question: do attitudes towards risk influence participation in small‐scale gold mining, a hazardous activity that generates uncertain income? This question is examined by measuring and comparing the risk attitudes of gold miners and non‐mining community members in the rainforest of Suriname, South America. The author presents a multivariate model to predict the duration of work in mining areas as a function of risk tolerance, age, education, and household demographics. The results suggest that a greater tolerance to risk increases the duration of a person's mining career. However, attitudes explain only a fraction of the variation in occupational choices. Qualitative data suggest that these choices are primarily shaped by local barriers to human capital development and by national economic volatility. Given their marginal position in society and the multitude of mining risk mitigation strategies, it is questionable whether gold mining exposes Suriname forest peoples to greater risks than other subsistence alternatives. The author argues that sensitivity to local historical and cultural conditions would improve the efficiency of policies aimed at developing a more sustainable mining industry. By zooming in on the daily lives of miners, anthropology can complement macro‐scale analyses and contribute to policy interventions in the small‐scale mining sector.     

Strategies for sustainable development of the small-scale gold and diamond mining industry of Ghana

The small-scale gold and diamonds mining industry is of great importance to Ghana. Since its regularization in 1989 the sector has produced and sold over 1.5 million troy ounces of gold and 8.0 million carats of diamonds. During the same period the sector also provided direct employment to over 100,000 people and improved the socioeconomic life of many individuals and communities. However, these were largely achieved at a cost to the environment in areas where mining is carried out and there is the need to develop the industry in a sustainable manner. This paper looks at the developments in the small-scale gold and diamonds mining industry in Ghana and proposes some strategies on how the concepts of sustainable development could be applied to the industry.