Mining and social development: Refocusing community investment using multi-criteria decision analysis

This paper addresses the question: How can mining companies assess social investment projects so that projects create value for the company and communities in which they operate? Mining companies are still wrestling with the limits of their responsibility in relation to social development even though they accept the business case for community investment at a general level. Fully aware of the practical hazards involved in taking an active role in facilitating local development, companies increasingly avoid methods that are overly paternalistic or assume the functions of the national or local governments. Gaining senior management's commitment to long-term social projects, which are characterised by uncertainty and complexity, is made easier if projects are shown to benefit the site's strategic goals. Case study research on large global mining companies, including interviews with social investment decision makers, has assisted in developing a Social Investment Decision Analysis Tool (SIDAT), a decision model for evaluating social projects. Multi-criteria decision analysis techniques integrating business planning processes with social impact assessment have proved useful in assisting mining companies think beyond seeking reputational benefits, to how they can meet their business goals and contribute to sustainable development.     

Making a stronger case for industrial energy efficiency by quantifying non-energy benefits

This paper describes a more compelling case for industry to promote the non-energy benefits of energy efficiency investments. We do this in two ways to actively appeal to chief executive officers (CEOs) and chief financial officers (CFOs) primary responsibility: to enhance shareholder value. First, we describe the use of a project-by-project corporate financial analysis approach to quantify a broader range of productivity benefits that stem from investments in energy-efficient technologies, including waste reduction and pollution prevention. Second, and perhaps just as important, we present such information in corporate financial terms. These standard, widely-accepted analysis procedures are more credible to industry than the economic modeling done in the past because they are structured in the same way corporate financial analysts perform discounted cashflow investment analyses on individual projects. Case studies including such financial analyses, which quantify both energy and non-energy benefits from investments in energy-efficient technologies, are presented. Experience shows that energy efficiency projects’ non-energy benefits often exceed the value of energy savings, so energy savings should be viewed more correctly as part of the total benefits, rather than the focus of the results. Quantifying the total benefits of energy efficiency projects helps companies understand the financial opportunities of investments in energy-efficient technologies. Making a case for investing in energy-efficient technologies based on energy savings alone has not always proven successful. Evidence suggests, however, that industrial decision makers will understand energy efficiency investments as part of a broader set of parameters that affect company productivity and profitability.     

A SWOT analysis of environmental management practices in Greek Mining and Mineral Industry

Over the last two decades, mining and mineral exploration companies have adopted various environmental management practices in response to society’s pressure for better environmental protection. The literature highlights a number of benefits and challenges for companies adopting environmental management practices with the Greek Mining and Mineral Industry (GMMI) facing similar issues. In order to analyze the challenges faced by the GMMI, a Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis was conducted, which examined the strengths, weaknesses, opportunities and threats faced by the industry when adopting environmental management practices. The analysis prescribes policy recommendations both for the government and industry which, if adopted, could facilitate improved environmental performance.     

Economic impacts of mining

The mining industry can be critical to a nation's economic well-being. Impacts may be felt on a national or regional level, with their significance dependent in part on the resources under development as well as existing government policies. This paper examines typical economic consequences of mining and how such impacts are being felt in the so-called transitional economies of Asia and Europe. Clearly, while mining continues to play an important role in the economies of Russia, China, Vietnam and other transitional nations, the nature and impacts of mining are different by virtue of years of centralized planning in the industry and the use of non-economic measures of efficiency. The changing character of mining is today opening up new opportunities for foreign investment and technology assistance.     

Implementing an environmental business strategy: A step-by-step guide

With more and more organizations seeking opportunities to generate benefits beyond compliance from environmental management activities, the challenges for environmental directors today is to develop and implement an environmental strategy that links environmental performance with the overarching strategic business goals of the organization. Organizations today are looking for opportunities to develop environmental management solutions that not only address the concerns of regulatory stakeholders, but also provide opportunities to improve operating efficiency and financial performance, enhance customer satisfaction, sustain market growth, and enhance goodwill, to satisfy the demands of a broader set of stakeholder groups including customers, investors, and employees. To achieve broader benefits from environmental management investments, this article shows how organizations must first develop a methodology for aligning their environmental management activities with the organization's strategic business goals and create a plan for systematically managing continuous improvement to achieve these goals. The second challenge is to implement this strategy at the business unit and facility level in a manner which integrates environmental management activities with an organization's core business processes to achieve improved product and service performance.     

Assessing the value of information for water quality management in the North Sea

Global Earth Observation (GEO) is one of the most important sources of information for environmental resource management and disaster prevention. With budgets for GEO increasingly under pressure, it is becoming important to be able to quantify the returns to informational investments. For this, a clear analytical framework is lacking. By combining Bayesian decision theory with an empirical, stakeholder-oriented approach, this paper attempts to develop such a framework. The analysis focuses on the use of satellite observations for Dutch water quality management in the North Sea. Dutch water quality management currently relies on information from 'in situ' measurements but is considering extending and deepening its information base with satellite observations. To estimate returns to additional investments in satellite observation, we analyze the added value of an extended monitoring system for the management of eutrophication, potentially harmful algal blooms and suspended sediment and turbidity in the North Sea. First, we develop a model to make the potential contribution of information to welfare explicit. Second, we use this model to develop a questionnaire and interpret the results. The results indicate that the expected welfare impact of investing in satellite observation is positive, but that outcomes strongly depend on the accuracy of the information system and the range of informational benefits perceived.     

REGIONAL IMPACT OF WATER RESOURCE INVESTMENTS IN A DEVELOPING AREA1

ABSTRACT: Regional development and industrialization patterns are investigated and related via regression analysis to water resource investments for the island of Puerto Rico. Although results of this study indicate such investments have little immediate or short-term impact, significant relationships and variations in regional responses appear over longer time periods. This is shown by applying a variation of Zellner's method of performing seemingly unrelated regressions jointly. By this method, subsets of parameter coefficients of specific economic variables were restricted across regional equations while unrestricted coefficients were interpreted as explaining systematic regional variations in response to public investment. Regional differences, obtained by using this method, are frequently neglected when simply examining the overall development process. Among the more interesting results in terms of policy implications is the apparent significant relationship, over the period considered, between changes in the distribution of income and the pattern of water resource development.     

Myanmar under reform: Emerging pressures on water,energy and food security

Myanmar's water‐related sectors are subject to intensive changes, as the country's abundant land and water resources provide substantial scope for development. Recent steps towards economic reform in Myanmar have led to a surge of foreign investment directed towards intensified natural resource extraction. Both the agricultural and the energy sector are increasingly affected by foreign investments that will impact the status of water, energy and food security in the country. With these on‐going developments, Myanmar's future is largely dependent on how its natural resources are managed and how the benefits from the resource extraction are shared. With various institutional changes and new actors welcomed to the sectors, existing livelihoods and ecosystems dependent on the land and water resources are to face increasing competition for the shared resources, while lacking secured access to them. There are increasing concerns that this sectoral development is occurring at the expense of environmental and social sustainability. As one way to tackle these challenges, the water‐energy‐food nexus approach could help in finding synergies and co‐benefits across sectors by addressing the imbalances along the nexus and externalities derived from the on‐going intensification.     

Adding public value: The limits of corporate responsibility

It is suggested that natural resource companies undertaking large-scale projects may be expanding the scope of corporate social responsibility by working to enhance the capabilities of the public sector. Naturally companies are concerned to protect their investments, and to ensure their viability. They will therefore invest in necessary infrastructure and facilities of all types, where those are lacking. Such investment often provides benefits to the wider community, but with a few exceptions these are normally incidental byproducts rather than inherent objectives. The motivation for companies to provide resources of all types in order to enhance the capabilities of the public sector to provide public services is usually an expectation is that the tangible benefits will exceed the costs, rather than altruism. One driving force is to secure and maintain a company's social licence to operate. More recently competition from Chinese firms is prompting private sector companies to offer comparable investments in infrastructure. It is unclear whether investment in public sector capabilities is cyclical and liable to cutbacks when market conditions deteriorate. Changing market conditions affect not just corporate willingness to spend but also host countries’ bargaining strengths. In boom periods host countries will be more able to secure straightforward financial benefits through higher tax receipts than when markets are weak. Beyond the specific needs of individual projects corporate policies are strongly influenced by the beliefs of senior managers. External pressures both from international institutions and from NGOs also drive corporate behaviour. The success of investment in public sector capabilities relies in the end on the responses of host countries, and on how closely the objectives and interests of the government are aligned with maximising the nation's long term wealth and welfare. Where they are not corporate resources may be frittered away. There are also questions over the legitimacy of corporate investments, especially by foreign-owned companies. They have a right to offer advice and protect their legitimate interests, but these may not always coincide with those of their host countries. There is a range of questions about the appropriate role of companies, which lead on to feasible and effective ways of improving weak governance.     

Chinese resource security policies and the restructuring of the Asia-Pacific iron ore market

This paper reviews the restructuring of the Asia-Pacific iron ore market in the wake of the rise of the Chinese steel industry. Prior to the 2000s, this market was characterised by two key features—high firm-level concentration on both the producer and consumer sides, and price determination through annually negotiated benchmark pricing between Australian mining and Japanese steel firms. However, owing to rapid growth in the Chinese steel industry and its emergence as the region's principal iron ore consumer, the Asia-Pacific iron ore market has been dramatically restructured during the last decade. This process has been accelerated since 2005 by Chinese governmental resource security policies, which have sought to address current record high iron ore prices through the use of foreign investment to sponsor new market entrants and the formation of an import cartel amongst the Chinese steel firms. This paper evaluates how these policies have driven restructuring in the Asia-Pacific iron ore market, through an analysis of the growth of China's steel industry, Chinese resource security policies aimed at lowering iron ore import costs, and their effects upon the regional market's ownership structure and price determination mechanisms. It argues that while Chinese investment and cartelisation policies have catalysed significant changes to the ownership and pricing structures of the Asia-Pacific iron ore market, they have carried only mixed benefits for the Chinese steel industry's resource security.     

The evolving structure of the European mining industry

A major restructuring of the mining industry has been going on since the early 1980s. Using 11 important minerals this paper analyses the changing pattern of control in the mining industry for European based mining companies. In general, European mining companies have increased their control over mineral production worldwide while North American based companies have shown a decline in control of production. Production of European state-owned mining companies has declined as a result of privatization.     

Sustainable development in the mining industry: clarifying the corporate perspective

This paper examines sustainable development in the corporate mining context, and provides some guidelines for mining companies seeking to operate more sustainably. There is now a burgeoning literature that examines sustainable development in the context of minerals and mining, most of which is concerned with sustainability at global and national scales. What is often challenging to ascertain, however, from these numerous perspectives on sustainable mineral extraction, minerals and metals recycling, environmental management, and social performance, is how sustainable development applies to mining companies themselves, and what steps a mine must take in order to improve the sustainability of operations. Since mining processes have the potential to impact a diverse group of environmental entities, and are of interest to a wide range of stakeholder groups, there is ample opportunity for the industry to operate more sustainably. Specifically, with improved planning, implementation of sound environmental management tools and cleaner technologies, extended social responsibility to stakeholder groups, the formation of sustainability partnerships, and improved training, a mine can improve performance in both the environmental and socioeconomic arenas, and thus contribute enormously to sustainable development at the mine level.     

Harnessing the bonanza: economic liberalization and capacity building in the mineral sector

Over the past decade many developing and transition economies have liberalized their investment regimes for mining and privatized formerly state-owned mineral assets. In response, these economies have witnessed increased foreign investment in exploration and development, growth in the number and diversity of mineral projects, and the opening up of new channels for harnessing increased economic and social benefits from development in the minerals sector. The restructuring of fiscal and regulatory regimes to encourage foreign investment, and the associated influx of mining capital, technology and skills, is transforming traditional relationships between mining firms, local communities and the government. This transformation necessitates a re-evaluation of the most effective policy approaches to capture increased economic and social benefits from mineral production. This article considers effective mechanisms for improving the capacity of developing and transition countries to maximize the economic and social benefits of mineral production. Common challenges associated with minerals economies are reviewed. Consideration is given to the opportunities for harnessing foreign direct investment and the possibilities for creating new partnerships between local communities, industry, government, and multilateral development agencies through social investment projects. The article concludes with a series of recommendations for the design and implementation of policy approaches towards harnessing mineral production for economic and social benefit following the liberalization of investment regimes for mining.     

Economic liberalisation, innovation, and technology transfer: opportunities for cleaner production in the minerals industry

The liberalisation of investment regimes for mining over the past decade is encouraging an inflow of foreign investment for mining and mineral processing projects in developing and former centrally-planned economies. This new investment is occurring at a time of technological change within the international mining industry as market and regulatory pressures lead the most dynamic firms to invest in the development or acquisition of new technologies and management practices. The effective transfer and assimilation of these technologies enable mining companies to combine gains in productivity with improvements in environmental management. Joint ventures and other strategic alliances between inwardly investing firms and the newly privatised or remnant state-owned mining enterprises may provide an effective vehicle for the transfer of the techniques for more productive and cleaner operations. Specific examples of innovative process and remediation technologies are analysed and it is suggested that the ability of innovative technologies to improve competitiveness and sustain best-practice environmental management in the recipient is linked to the transfer and effective acquisition of the capacity to manage the complex processes of technological and organisational change. The paper closes with some recommendations for further research directed towards a systematic examination of this hypothesis.     

Mineral potential and scope of investment in the Republic of Yemen

On 22 May 1990 the Yemen Arab Republic and Peoples Democratic Republic of Yemen were unified to form the Republic of Yemen, with a population of about 14 million people in an area of about 580 000 km². The Republic of Yemen is hoping to develop its mineral industry. Possessing a well established geological database plus a newly issued mining law and investment law, Yemen is inviting all investors, whether from the Yemeni private sector or foreign companies, either solely or in joint ventures to investigate opportunities in minerals and construction and industrial materials.     

The relationship between mining and socio-economic well being in Australia’s regions

This paper examines the relationship between quality of life indicators and the gross value of minerals production from Australian regions. We used quality of life indicators, aggregated for 71 local government areas containing mining activities, of household income, housing affordability, access to communication services, educational attainment, life expectancy, and unemployment. We find no evidence of systematic negative associations between quality of life and the gross value of minerals production. Instead, mining activity has a positive impact on incomes, housing affordability, communication access, education and employment across regional and remote Australia. Whilst we do not establish causality between mining activity and quality of life, our analysis prompts a rethink of the resource curse as it applies within a single country. We did not find evidence of a resource curse, at the local government level, in Australia’s mining regions. Nevertheless, we note observations by many other researchers of negative social impacts on specific demographic sectors, localities, families of fly-in fly-out mining operations, and individuals. This contrast may be a scale issue, with the regional benefits of mineral wealth masking highly localised inequalities and disadvantage. We suggest that there is a need to better understand these impacts and, more importantly, the types of policy mechanisms government and industry can adopt to mitigate or avoid them.     

Corporate strategy and viable future land use: planning for closure from the outset of mining

This paper provides an overview of the environmental impact of mining on viable future land use and underlines the imperative of improved environmental management and closure planning. It argues that pollution prevention, through planning for closure, can lead to cost-effective strategies for sustainable minerals development and viable future land use. This seems to be most true for greenfield sites since, generally, the earlier closure planning and pollution prevention is built into a project, the more cost-effective and environmentally benign closure will be. Further, for greenfield sites, pollution prevention techniques can be employed from the outset, at the stages of exploration and mine development, and then monitored and improved through the operation stage to closure, and can be kept in place to manage future land use.
The paper discusses how global changes in the industry, following the liberalisation of investment regimes, and mergers and strategic alliances between key firms, has, by virtue of the diffusion of new technology, led to further opportunities to prevent pollution and optimise future land use through planning for closure from the outset. The objectives and components of closure plans are also reviewed as the paper draws on case studies to highlight some of the possible constraints and challenges to pollution prevention that may be faced at the level of both public policy and corporate strategy. The article concludes by suggesting a forward-looking approach to integrated environmental management and viable future land-use planning based on a dynamic model for environmental management.     

Mining investment in Africa

Since 1985, there has been rapid growth in the presence of Australian exploration and mining companies in Africa. This paper sets out the reasons for the interest of those companies, now 20 in number, in various African mineral opportunities. Australian companies spent about US$16 million in 1992 on African exploration and evaluation, with over US$130 million spent on new mine development or expansion. The 20 Australian companies operate in 16 African countries, with two areas of focus, West Africa and Southern Africa. Using the responses to a survey sent to Australian companies operating in Africa in 1991, and to companies known to be interested in prospects there, the paper identifies and categorizes the policy and regulatory requirements needed by investors. Although a gloomy picture has often been painted of investment in Africa, Australian companies recognize that their risk taking, in the light of a declining investment climate in other mining areas, could promote a renaissance of world-scale mining in Africa.     

Making the Business Case for Sustainability: How to Account for Intangible Benefits—A Case Study Approach

Sustainability is continuing to change the way businesses operate. Stakeholders are insisting that corporations implement more responsible business practices, and they are holding them increasingly accountable for their associated environmental and social impacts. Research has provided significant contributions toward sustainability‐related tools and best practices, allowing sustainability to be integrated even farther across business operations. However, challenges still exist, preventing many companies from fully integrating sustainability. Although intangible benefits are not commonly included in business case assessments, such benefits can be derived through sustainability initiatives and may offer additional value in evaluating the business case for sustainability. In this article, we review current literature on accounting methods for the business case for sustainability as well as currently available methods or tools that are capable of estimating intangible benefits. In addition, we use case studies to illustrate if, and how, companies are accounting for intangible benefits, and we identify best methods for accounting for intangible benefits.     

Insurance sector management of climate change adaptation in three Nordic countries: the influence of policy and market factors

The insurance industry is important for facilitating climate change adaptation. Insurance companies’ involvement is, however, influenced by national adaptation policy. The literature suggests that especially policy factors – government interventions, political priorities and public–private cooperation – and market factors – cost offset, cost mitigation, planning flexibility and business opportunities – shape private actor approaches. To increase the understanding of insurance company involvement in adaptation, this study examines how insurance companies’ approaches are influenced by policy and market factors in three countries: Denmark, Norway and Sweden. The study found that the policy factors tested significantly shaped the approaches of the companies assessed, while market factors currently appear less influential. This is likely due to the absence of climate risk and adaptation in political debates and among insurance policyholders. The study discusses the potential role of the insurance industry in adaptation governance and suggests how barriers facing insurance companies could be overcome.